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National IFA moves £253m to DFM after suitability review

National IFA moves £253m to DFM after suitability review

AIM-listed IFA Frenkel Topping has completed a suitability review which has seen £253 million of client assets transferred to its own in-house discretionary fund management (DFM) offering.

In May last year the national advice firm received discretionary permission from the Financial Conduct Authority (FCA), meaning it could transfer clients to its new investment company which acts as a DFM.

In annual results for 2016 released today, Frenkel Topping said it completed a suitability review in order to transition clients to its DFM offering.

‘We had to do a full review of the clients circumstances to decide if our in house offering was suitable and then make a recommendation to the client,’ a spokesperson from the firm said.

This review has seen £253 million of clients assets transferred to its in-house offering. The firm had £745 million of assets under advice at the end of 2016. 

When asked, a spokesperson from Frenkel Topping said the review has changed nothing at the firm.

‘Frenkel Topping is still an independent, whole of market financial adviser.  Within the group we have created an in-house DFM which has created products for our niche client bank in mind; the clients that have transferred to the in-house [DFM] have done so because it was most suitable for them,’ a spokesperson said.

In the results Frenkel Topping saw its pre-tax profit at £900,000, down from £1.3 million in 2015.

The firm said this drop in profit was a result of an accounting charge over issuing share options to members of the company.

Earlier this month Frenkel Topping said the change to the Odgen discount rate from 2.5% to -0.75% would have a significant boost to the company over the next three years.

The Ogden rate establishes how much insurers must pay out on personal injury claims. It is linked to government bonds, but has not been changed since 2001. The government announced the change at the start of March.

Frenkel Topping, which specialises in offering financial advice to clients who receive personal injury damages, said the change to the Odgen rate would mean its assets under advice (AUA) would be better than expected. For 2017 it has revised its advice growth from £75 million to £100 million.

As of 31 December 2016, the firm’s total AUA was at £745 million, up from £666 million at the same point in 2015.

Jason Granite, Frenkel Topping’s chairman, said: ‘2016 was a pivotal year of change for the group as it grew its range of specialisms to include the capability to offer discretionary managed services, as well as financial advice, to those in receipt of a personal injury or clinical negligence claim.

‘The focus remains on continued year-on-year growth in both AUM and those on a discretionary mandate.’

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