Takeover activity in the wealth management sector led Blue Fox Wealth to seek an independent discretionary fund manager (DFM) that could offer a smooth ride regarding performance and administration. Its choice marks a second week in a row an IFA on this page has opted for Casterbridge Wealth.
The Dorchester-based firm started outsourcing to Salisbury-based Casterbridge Wealth in December 2016, after changes in ownership at rival DFMs disrupted the running of its practice.
‘We have clients with Quilter Cheviot and Investec Wealth and Investment. Both have had ownership changes in recent years, which had a knock-on effect for us and our clients,’ said Blue Fox director Stephanie Dyke (pictured).
In one instance, the introduction of alternative back-office software meant client plan numbers were changed. This meant the advice firm had to update and amend its own back-office records.
‘The relationship between adviser and DFM cannot co-exist without transparency and access to information. But we lost the automatic feed to Intelligent Office, our back-office system, and could not access current valuations. It took months to get sorted,’ said Dyke.
‘Thankfully, our clients won’t have seen the effect of these changes as much as we have. But, ultimately, our time was redirected away from client work towards chasing up various head office departments to get matters resolved.’
Dyke, a chartered fellow of the Chartered Institute for Securities & Investment, has so far been pleased with the access to valuations and consistency of performance offered by Casterbridge. ‘We have online access and standard regular valuations. We have not seen large swings in capital value even for growth clients, which is reassuring.’
She has also been impressed by its high compliance standards. For example, it was the first service provider to get in touch regarding Mifid II.
‘Knowing compliance is at the core of the service is reassuring. I feel confident the firm will exist for many years and there will not be a backlog of client complaints,’ said Dyke.
Range of riches
Blue Fox clients using Casterbridge’s discretionary portfolio service typically have £1.5 million to invest. They include corporate high-flyers approaching retirement, retired high-net-worth individuals, large pension funds and a family trust.
For clients with more modest investable assets, typically £250,000 or more, the adviser uses Brooks Macdonald’s managed portfolio service. ‘For these clients, the benefits of active management outweigh the higher cost of using a DFM service,’ said Dyke. ‘Saying that, this is often offset by a DFM’s ability to purchase institutional units.’
Dyke established Blue Fox three years ago, having worked as a senior client manager for a DFM for five years. So she has first-hand experience of the value a DFM can bring.
‘By utilising a collegiate approach between IFA and DFM, I felt clients would receive a better service,’ said Dyke. ‘Each party is focused on its own area and specialisms, but both put clients’ interests first.’
See the last issue (569) to compare another IFA’s experience of Casterbridge Wealth.
POINT OF VIEW
Casterbridge is smaller than the big players that are typically controlled by a fund group or bank.
Blue Fox highly rates the experience of chief executive and chief investment officer Keith Edwards.
The adviser receives clear communication from the DFM at each stage of taking on a client, and regular reporting from the investment manager.
Casterbridge opened for business at the end of 2016 and is still in its infancy. So Blue Fox has been keeping a close eye on funds under management to ensure the DFM proves viable.
The adviser is also monitoring the number of new support staff to ensure the needs of its clients can continue to be met despite the influx of new money.
One problem the adviser has encountered with using a relatively new firm is the lack of platform and wrap coverage.
Average portfolio size of the adviser’s clients: £1.5 million
Minimum investment limit for clients using the service: £250,000
Number of the adviser’s clients using the service: 10