At DISCUS we are always keen to share best practice guidance that can help advisers to grow their businesses. From due diligence tips, to improving business processes or building successful partnerships with discretionary fund managers (DFM). Here I will look at the adviser/DFM on-boarding process. Does the quality of a DFM’s induction process have any bearing on the likelihood of a successful long-term relationship? How can DFMs improve adviser on-boarding?

I recently came across an interesting statistic: 69% of employees are more likely to stay with a company for three years if they experienced great on-boarding (view the full source and infographic here). It got me thinking, can the same be said for the on-boarding of advisers by discretionary managers? DFMs with a structured, formal adviser induction programme should benefit from highly engaged, long-term partnerships. But how many DFMs have put a formal process around their adviser on-boarding?

Formal adviser on-boarding

I’ve asked around and it would appear that, typically, on-boarding falls on the Business Development Manager (BDM) who first built the relationship with the advice firm. Over several meetings the BDM will explain the investment process and how to access the portfolios, either directly or via the chosen platform(s). They will also share examples of presentation materials and the regular communications they deliver to advisers and clients. The adviser is then ‘signed-up’ and the relationship moves into a business-as-usual model.

In this example, the quality of the advice firm’s induction is person dependant. From the initial engagement through to final on-boarding, the BDM is solely responsible for the user experience. Their commitment of time and attention to detail will play a crucial role in whether the induction is a success.

Each BDM is also likely to personalise the experience, which can lead to inconsistencies (I experienced this first-hand when I worked in sales for a manager-of-manager. I tended to focus a lot of time during the adviser induction on mapping the user journey and client experience, with training on how to position an ‘outsourced investment offering’ to clients. My counterpart would hone in on the technical detail, spending almost 100% of his time talking investments, given that was his strength).

Due diligence is not an induction

The due diligence process should be a two way street (read this article for more), which will mean the sharing of a lot of information between the advice firm and DFM prior to their appointment. The granular detail for how the relationship will work in practice will be determined.

In addition to an understanding of the investment process, questions like the following will be answered, on both sides:

»   What is your service proposition?

»   What types of clients do you work best with?

»   Do different service levels apply?

»   How is technology used? (e.g. what platforms or back office systems do you use/link to).

»   Describe your corporate culture.

»   How big is your team and how is it structured?

»   What is your approach to client communications?

»   Who will retain responsibility for suitability?


Many of these items relate to the mechanics of the relationship, rather than how to:

»  Identify the needs of clients best suited to proposition(s)

»   Articulate the DFM offering

»  Ensure a detailed understanding of the intricacies of the investment approach

Bringing it all together

It is crucial for all client-facing staff – often those not involved in the due diligence process – to have a thorough understanding and appreciation of the discretionary offering. To know why it is being introduced and who it is best suited to, from a client needs perspective. They also have to be able to present the proposition, then handle questions or objections.

Standardised programmes delivered consistently and efficiently, which can also test learning, will remove the ‘person dependency’ I mentioned earlier.

I recently spoke with James Goward of Rathbones, to get his thoughts on DFM/adviser induction programmes. He said:

“I agree that adviser on-boarding is crucial to the success of any long-term relationship between the adviser and DFM. This is an area of increased focus for us, because getting these foundations right can have a tremendous impact on how the relationship progresses from there.”


This post was creating following a discussion with James Goward of Rathbones. You can find out more about the range of Rathbones investment services here ›