BLUECHIP2025 DFM GUIDE -
BLUECHIP2025 DFM GUIDE - INTERVIEWReady to meet your needsNadir Thokan, Senior Discretionary Fund Management Specialist at InvestmentSolutions by Alexforbes, provides insights into his business.What makes your business distinctive?Leveraging South Africa’s largest multi-managerplatform allows us to truly implement the mostflexible model in working with clients in a waythat suits them best. This ranges from completelyoutsourced investment management and marketaccess for clients with a lower risk budget all theway to a highly customised bespoke investmentstrategy and research design for a large IFAor wealth manager with complex needs fortheir client base. The second element whichdifferentiates our DFM materially is tapping intoa truly independent global manager researchpartner of scale.Who is your ideal client?Investment Solutions by Alexforbes’ flexiblebusiness model enables clients to tap into thetime, resources and expertise they need fromus. While we have seen significant appetite forlarger, custom-built investment strategies suitedto specific IFA practices, our houseview modelportfolio and unit trust strategies have all beenexceptional top-quartile performers offeringcredible outsourced CIO solutions to IFA practiceslooking to delegate non-core functions and focuson the business of financial advice.Who are not your clients?Clients that require bespoke solutions to bebuilt with assets that are subscale and do notoffer sufficient economies of scale to constructsuch desired bespoke solutions in a scalable andefficient manner.What role do you believe DFMs play inimproving client outcomes?DFMs should improve client outcomes acrossthe following factors:a. Provide more time for IFAs to focus onwhere their effort is best spent – providingfinancial advice. By focusing on wherethey are most productive, they wouldcompound the positive impact on their clients’financial journey.b. Improve investment outcomes throughfocused and scalable investment research as28well as portfolio construction. A DFM shouldhave greater depth of investment researchresources focused solely on this task.c. A DFM should have the capability and insightto advise their IFA practices on how to runa more efficient, scalable and profitablepractice through leveraging adviser impactreporting and best practice thinking.d. A DFM should be able to use scale to negotiatemore competitive asset management feesfrom underlying asset managers utilisedwithin a solution.Some argue DFMs are just another layer ofcosts for clients. Your response?One should consider value as opposed tojust costs. Should a DFM achieve its intendedoutcomes of greater practice efficiency, enablingadvice to be provided at scale to more membersof the public by freeing up advisers’ time andimproving performance outcomes on a net offee basis, you have an entire retail investmentindustry that is better off for it.Some have the view that DFMs should haveperformance tables like fund managers.Your perspective?One of the challenges of the DFM industry overallis a lack of ubiquitous performance transparencyas we so readily have within the unit trustindustry. Greater performance transparencypromotes sustainability, accountability andadopting an evidence and data driven approachto measuring enhanced client outcomes.What are the biggest challenges you seefacing DFMs in the next decade?As the industry continues to grow and increaseits presence in the retail market, regulation wouldneed to keep up with the rate of innovationhappening within the sector. Examples of thisinclude gaining exposure to alternative assetclasses and clearer standards for performancemeasurement and accountability with regardsto model portfolios. However, regulations suchas RDR and COFI have addressed several nascentretail market concerns.Nadir Thokan, Senior DiscretionaryFund Management Specialist atInvestment Solutions by AlexforbesBIOGRAPHYNadir assumed the role ofhead of Investment ConsultingStrategy at Alexforbes in October2022, overseeing the researchand best practice division.His expertise covers variousareas, including formulatingdefault investment strategiesand adapting to legislativechanges affecting investmentstrategies. Nadir's insightsassist advisors in optimisingthe use of different investmentproducts for both mandatoryand optional investments. Hiswork in developing investmentframeworks and solutions hasestablished him as an integralmember of the InvestmentSolutions Discretionary FundManagement team at Alexforbes,facilitating the integration ofbest investment practices intoadvisory services.
2025 DFM GUIDE - INTERVIEWBLUECHIPWell positioned to thriveFay Khan, Senior Discretionary Fund Management Specialist at InvestmentSolutions by Alexforbes, offers her thoughts on the current DFM landscape.How do you see DFMs evolving in the futureto keep Alexforbes competitive?The evolution of South Africa’s DFMs will beshaped by stricter regulations, global passiveinvestments, ESG filters and alternativestrategies. Initially created to alleviateadministrative and regulatory burdens on IFAs,DFMs are now crucial in managing complexinvestment landscapes. Future success willdepend on scale, research capabilities andtechnology-driven solutions. The InvestmentSolutions DFM strategy is rooted in connectinghigh-quality advice with best-in-class solutions.We leverage our institutional expertise forretail clients, ensuring IFAs remain confidentand in control.Our differentiators include:• Advice-led DNA: Our DFM inherits Alexforbes’rigorous research frameworks to help IFAscreate model portfolio solutions.• Multi-manager expertise: Unlike DFMs thatpush in-house products, we leverage ourstrengths to provide best-of-breed local andoffshore solutions.• Global partnership: Through Mercer GlobalInvestments, we access top-tier offshoreresearch and expertise, enhancing ourportfolio construction.• Technology and data: We use Adviser andPractice Impact Reports to provide real-timeinsights that shape future-fit solutions.How do tightening regulations impact yourability to stand out?Investment Solutions is well positioned tothrive under regulations like the Conduct ofFinancial Institutions (COFI), which prioritisesgood conduct, transparency and customerprotection. Our Best Practice team andAcademy keep IFAs ahead of compliancetrends. Our Mercer partnership also providesglobal diversification. By integrating insightsfrom our chief economist, digital analytics andstrategic units, we help our clients to adaptswiftly to regulatory changes. This proactiveapproach ensures our solutions remaincompliant, effective and competitive.How important is technology for DFMs?Agility is key to the future of DFMs and technologyplays a vital role. However, it’s not just aboutAI-driven platforms – it’s about mining data toprovide actionable insights. Hyper-personalisationallows us to tailor solutions to each IFA and theirclients. Technology should be an enabler ratherthan the solution itself. By analysing IFA clientbooks and practice data, we develop bespokeinvestment solutions that enhance their advicemodels. Partnering with IFAs for ongoinginnovation ensures both practice prosperity andlong-term business sustainability.How can DFMs support IFAs?Our Adviser and Practice Impact Reports providedetailed insights into practice health, identifyingrisks and opportunities. Much like a regularmedical check-up, these reports analyse assetallocation, manager spread, flow trends and clientdemographics. This ongoing dialogue ensures IFAsremain aligned with best practices and optimalfee structures. Beyond investment management,we help IFAs address business sustainability,succession planning and long-term growth.How can DFMs contribute to industrytransformation and succession planning?DFMs must continuously evolve to supportindustry transformation and inclusivity.Alexforbes is committed to Broad-Based BlackEconomic Empowerment (B-BBEE) by promotingdiversity in asset management and financialadvisory services. Through AFinvest, our digitallaunchpad, we are empowering emergingIFAs, especially black advisers, by providingcost-effective, scalable advisory solutions.Additionally, we partner with organisations likeABSIP to drive meaningful transformation.Succession planning is another crucial role.Leveraging Alexforbes’ financial strength andbusiness infrastructure, we help IFAs structuresuccession strategies that ensure businesscontinuity. Our practice reports supportworkforce planning, allowing experiencedadvisers to transition ownership smoothly whilefostering industry growth and sustainability.Fay Khan, Senior DiscretionaryFund Management Specialist atInvestment Solutions by AlexforbesBIOGRAPHYFay joined Alexforbes on1 May 2023, initially as aSenior Technical MarketingSpecialist before transitioningto her current role as aSenior Discretionary FundManagement Specialistwith Investment Solutionsby Alexforbes. With over 16 yearsof experience, Fay has honed herexpertise primarily within theasset management industry.Her career journey includesroles as an equity analyst, multimanagerresearch analyst andDFM portfolio manager atinstitutions such as SanlamInvestments, Glacier by Sanlamand PPS Investments. Notably,she played a pivotal role inrefining investment-relatedprocesses and launching a DFMat PPS Investments from 2017to 2020.29
