Selective Partnering in the IFA world - Discretionary Investment Management Services

With a number of market falls over the last decade, fund suspensions and the increasing volatility of equities, many IFAs are considering their position on providing investment advice to their client base. Furthermore, with RDR policy implementation at the beginning of 2013 many, if not all, UK IFA companies are now looking at the business changes that need to occur. Perhaps a more significant part of this review will include how IFAs deal with investment management.

Fairbairn Private Bank has been successfully and expertly managing discretionary portfolios for the last five years. We are ideally positioned to provide the investment expertise in managing discretionary portfolios and partner with IFAs to deliver these services to their clients.

Our process ensures the IFA retains responsibility for the client relationship and also for providing advice relating to attitude to risk, investment goals and tax planning requirements. We build trust and confidence to allow our existing IFA partners to have full confidence we will not cross-sell into their relationship. The IFA undertakes the risk profiling of the client, selecting the most appropriate portfolio which matches the client's risk profile. We provide the IFA with the utmost confidence and knowledge that we will execute the investment mandate to achieve a return on their clients' funds within agreed risk parameters.

The process for the IFA is straightforward. The client simply signs an instruction appointing Fairbairn Private Bank to act on their behalf. One of the major advantages of this to the IFA is speed and consistency. For example, by employing Fairbairn Private Bank there is no requirement for the IFA to write a letter to the client for permission to switch funds, ensuring that any delays in client responses do not allow the portfolio to drift from the set parameters of the portfolio.

Remuneration capabilities for the IFA include the ability to add initial fees and ongoing fees. Fairbairn Private Bank can facilitate the payment of the fees directly to the IFA in a manner compliant with RDR requirements.

Here's an example of one scenario where we can help:

A UK IFA's long standing client is a successful business man who has built up a number of pension pots with a combined value of over £500,000 and he is now retiring overseas to relax and live in the sun. The IFA provides the advice on the pension transfers, drawdown requirements, tax planning and risk profiling. During this process, the IFA identifies a transfer to an offshore SIPP (QROP) scheme is appropriate due to the client's forthcoming non-UK residence status. Due to the size of the combined pension value, he recommends to his client a discretionary investment manager should be employed to manage the portfolio in a Low / Medium risk manner aiming for growth without undue risk.

Fairbairn Private Bank's arrangements with a number of leading SIPP and QROP providers means the IFA can comfortably recommend our Low/Medium risk portfolio (managed within a standard deviation range of 4% to 9%) as part of the pension recommendation. We are employed to manage the portfolio, providing online access to the IFA and client. The IFA continues to monitor the performance and risk management of the portfolio and provides ongoing communication and service to their client, as part of their ongoing advice and service strategy.

Through our flexibility and ability to provide selective products and services to clients via their IFAs, we are able to enhance the IFA's proposition and in this way add significant value in areas that they do not currently have access to. All this, with our promise of 'no cross-sell', makes Fairbairn Private Bank the perfect partner.

To find out more about how we can partner with your business to enhance your client offering, please contact your relationship manager directly or our client services team on +44 (0) 1624 645000.