Cogence fund manager
In a nutshell, a discretionary fund manager (DFM) is an established asset manager with the license and mandate to buy and sell investments on behalf of clients. What this means in practice is that a DFM becomes the investment arm of an adviser’s business, taking on the role of constructing and managing a range of investment solutions on behalf of the adviser’s clients, thus freeing up their time to focus on client relationship management, financial coaching, reviews, and other critical financial planning services.
Why is this important?
Investment markets are growing complex due to geopolitical risks, legislative demands, and the emergence of alternative asset classes. Technology is becoming crucial for multi-dimensional financial planning.
The local DFM market has expanded, aiding advisers in creating investment solutions and streamlining reporting. However, it struggles to navigate the sophisticated global investment landscape. The shift to defined-contribution retirement schemes places investment and associated risks on individuals, revealing gaps in the local DFM market.
This complexity necessitates a partnership with a globally connected DFM for unmatched international diversification and comprehensive retirement planning.
This changing landscape and complexity highlights the need to partner with a globally connected DFM that has unmatched international diversification and comprehensive retirement planning.
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What would be the measure of a successful DFM?
A valuable DFM, also known as a retail multi-manager, complements local advisers with world-class investment management to achieve clients’ financial goals. DFMs, licensed to bulk trade and manage solutions, conduct manager research, for optimal portfolio construction across a global investment universe, including unit trusts, ETFs and other active and passive asset and investment classes.
Cogence achieves this through critical partnerships with BlackRock and RisCura. Blackrock provides strategic asset allocation and global manager selection, with RisCura providing research and manager selection on the local component. Advisors also benefit from BlackRock’s Aladdin Wealth™ portfolio construction technology and Discovery’s Vitality data, which spans over 60 million life years’.
Cogence currently manages more than R16 billion in assets, including R3.4 billion in the Cogence Global Cautious, Balanced and Growth portfolios, all delivering returns in the first quartile of their peer ranking.
The growing global investment universe and regulatory complexity have increased DFMs’ relevance. They manage this complexity, allowing financial advisers to focus on client relationships. However, in South Africa, DFMs do not replace the personal services offered by financial advisers.
The growing global investment universe, and regulatory complexity have increased the relevance of DFMs in recent years. DFMs manage this complexity, allowing financial advisers to focus on client relationships. By outsourcing the compliance and investment management function to a DFM, the adviser can focus on growing their practice. However, in South Africa, DFMs do not replace the personal services offered by financial advisers.