While recent months have seen a flurry of new offerings in the discretionary fund management space, a new Ascentric survey has found that 74 per cent of UK advisors have less than half of their client assets invested with such a provider.

While advisors might be being restrained in their use of DFMs, the overwhelming majority (94 per cent) feel that it is important to be able to offer a centralised investment proposition. In fact, so keen are they to be able to offer such a preferred service that 52 per cent said that they would switch platforms if a selected discretionary fund manager or multi-manager was not available to them. Only 41 per cent would change their choice of discretionary fund manager or multi-manager instead.

Three-quarters of the advisors surveyed foresee that the use of CIPs will increase after the Retail Distribution Review comes into force at the end of December. The RDR reforms have caused many advisors to outsource the investment management element of their business in order to spend more time with clients and obviate the need for exhaustive investment research.

Advisors are not entirely sanguine about using CIPs however: 28 per cent said they were unsure about whether they fully understood the procedures, suitability and due diligence requirements this entails.

Looking more closely at advisors’ concerns about CIPs, 30 per cent are most worried about the costs of using the services of a DFM, while 20 per cent cited worries over their relationships with clients and 19 fret over losing control. Regulatory issues and transparency of performance were the number one concerns for 14.5 per cent and 13 per cent of respondents respectively.

Under the RDR, the UK regulator has banned advisors from receiving commission from discretionary fund managers. They can, however, receive an introductory fee or payment. As a result, 84 per cent of those surveyed said minor or moderate changes within their business had been required.