As a DFM there are a number of changes you should be aware of when using the new platform, for example:
What's changed for DFMs?
Fees and charges
On the old platform fees are calculated on a month end balance. The new platform brings a greater level of accuracy in that it is calculated daily.
With the new platform you will need to contact the Investment Partnerships team to change the DFM charge or VAT option on a Model Portfolio that one or more accounts are linked to.
Fees on the new platform are paid on the Wednesday following the second weekend of the month.
On the new platform, DFM fees can only be paid from the originating account.
On the old platform we report the value of the ETIs in an Account(s) using the ‘Bid Price’; however, on the new platform we will value ETIs at the ‘Mid Price’ or ‘open market value’ (which is normally higher than the ‘Bid Price’). Due to this change in valuation method you may see a greater than expected difference in the value of Assets the day before and after we make the move to the new platform.
For Accounts you manage, new Account number(s) will come into effect when they are moved to the new platform.
Following the move, clients will receive quarterly statements (in line with MiFID II requirements).
On the new platform, you need to put a minimum of 2% cash in your portfolios to ensure there is sufficient cash available to pay fees. Where there isn’t sufficient cash to pay fees we will automatically disinvest from client portfolios to raise the cash in advance of the fee being payable. If we have to sell down to release fees, we will do so from the largest holding first. If you are running Model Portfolios, you won’t be able to rebalance any client account where this process has been triggered until the disinvestment trade(s) settles, which could take up to 8 days. DFM fees will only be paid where there is sufficient cash in the client account.
Take note that rebalances will no longer include in-flight transactions and so you may find higher than expected exclusion rates. If an automated disinvestment is triggered for fees then any unsettled trades could mean the rebalance is rejected.
If you have any questions please call us on 01225 787567 or email email@example.com.