DFS Portfolio Solutions took out the International Equities category at the IMAP Managed Account Awards.
For Stephen Romic – Principal and Head of Research at DFS Portfolio Solutions - winning the IMAP Award for International Equities is acknowledgment and recognition from industry peers that he believes has been a decade in the making.
“We are one of the early adopters in the managed accounts space, having started back in 2008. It’s wonderful to see the market evolve and accept our business model, which we have been developing for over 10 years,” Stephen says.
As a model manager, Stephen believes DFS’ success lies with its client-centric, non-conflicted approach to portfolio research and ultimately, portfolio construction.
“We have developed a research process that is entirely funded internally and which is non-conflicted. And our approach to managed accounts is quite client-centric. Our offering has been built from the perspective of an IFA practice, rather from an institutional perspective,” Stephen says.
“So, we’ve built our managed accounts capability from the viewpoint of the client and what they want. We are providing accountability to clients through a high degree of transparency, which enables them to discern what value they are receiving across their portfolio, as an unbundled service that runs parallel to the holistic planning advice.”
Research process
For the 2018 IMAP Managed Account Awards, DFS Portfolio Solutions was a finalist for the categories of International Equities, Australian Equities, Multi Asset Class and Other Asset Classes, for which it received the gong for International Equities.
Stephen says DFS Portfolio Solutions’ investment research team, which comprises of four dedicated professionals, maintains a consistent and non-conflicted approach in its research processes for all these categories.
“What this shows is that we do not take a piecemeal approach to research,” Stephen says. “We have a highly experienced and well-credentialed team of people to do the heavy-lifting when it comes to the investment research.”
In addition to that, DFS has an investment committee that includes the four research professionals, as well as two independent investment consultants, who are used to challenge and scrutinise the findings of the research team.
Measuring success
Success is at the core of DFS’ capability and measuring that success is something Stephen takes very seriously.
“One part of measuring our success is portfolio performance, and that’s not just about the returns but the overall performance of the portfolios. So, for us, measuring success is about keeping to our value system and consistently reaching our objectives,” he says.
“So, in terms of our value system, that means ensuring our research model stays non-conflicted. We want to ensure that it does not over-represent active or passive managers during all market conditions. And, of course, we want to make sure our interests are aligned to the end-user.”
DFS has also developed a risk-based approach to asset allocation for its multi-sector model. Stephen says the measure of success for risk profile models is keeping the integrity of its clients’ risk profiles intact. It does this by measuring and monitoring risk to make sure that the risk exposure of clients is in keeping with their risk tolerance.
“With conventional portfolio management, there are periods of very stable returns and periods of very volatile returns. Clients are typically told there are good times with investing and bad times, in which case they should just ride out the storm during the bad times,” Stephen says.
“But at DFS, we want our clients’ risk profile to be at a certain range. So, what we do is measure, monitor and adjust portfolios to make sure the risk tolerance is within their particular range.
“We’ve spent a lot of time, effort and resources to build our risk-based approach, and one of our key measures of success is keeping the portfolio risk level pegged to each client’s underlying risk tolerance level.”
Communications
And while DFS’ portfolio management was an important factor in winning the International Equities category, Stephen also credits the group’s client communication strategy, which DFS has committed to over the past 4-5 years.
“We are now engaging with clients in a much more meaningful way,” Stephen says.
“Gone are the acronyms and technical jargon when dealing with clients. We are increasingly refining our client communications to be succinct and to the point.
“This has been a big enhancement to the business, with our clients much more engaged with their investments and the overall portfolio management process.”
Finalists
IMAP congratulates all the finalists in the International Equities category.
- DFS Portfolio Solutions
- Pearl Funds Management
- Prime Financial Group
- Watershed Funds Management
- Powerwrap – WCM Quality Global Growth
