DIM and Agent as Client

Jewell

Hi,

For anyone that uses DIM's as part of their investment proposition, to what extent do you explain the concept of 'agent as client' as part of your Suitability Reports?

We have a consent form that we require the clients to sign if they are adding to a DIM portfolio which explains a lot of the detail (including FAQs etc), but it feels as though I'm just duplicating this form into my SRs, whereas I'm wondering if one or two lines referring to the consent form is sufficient.

Thanks!

benjaminfabi

Basis of discretionary management agreement
[DIM] will manage your investments on a discretionary managed basis. This means that your portfolio will be managed without the need to advise you every time an underlying change is made.
The benefits are:
 Changes can be made quickly.
 Trading will be on a bulk basis so asset dealing charges will, in most cases, be reduced.
There are also disadvantages:
⚠ There is an extra layer of costs payable to the manager.
⚠ The discretionary investment mandate means that you are giving up some control over your affairs.
o Changes can and will be made to your invested capital without your prior approval.
o There may be occasions when an individual fund or funds may have a higher risk rating than your overall stated risk profile. The overall risk of the portfolio being recommended is suitable for your risk profile.
With this discretionary managed service, [DIM] has a commercial agreement with [FIRM] using an ‘Agent as Client’ relationship.
This means [FIRM] is the client of [DIM], rather than you directly.
⚠ If there is a need to make a complaint against [DIM], the Financial Ombudsman Service might be unavailable to you.
o It does not, however, stop you from complaining against [FIRM] or, where applicable, claiming against the Financial Services Compensation Scheme.