BLUECHIP2025 DFM GUIDE -
BLUECHIP2025 DFM GUIDE - INTERVIEWPioneer in the DFM spacePortfolioMetrix was one of the first DFM firms in South Africa.Brandon Zietsman tells us more about their current offering.PortfolioMetrix was one of the pioneeringSouth African DFM firms. Does the rise ofnew DFMs validate your original thinking?PortfolioMetrix (PMX) was launched in 2010because we saw gaps in the market thatothers overlooked. Back then, the DFM modelwasn’t mainstream and we had to challengeconventional wisdom. Today, DFMs arelaunching at an eye-watering pace, but manyare driven more by fear of missing out thandeep strategic insight. Whether the trajectoryis sustainable remains an open debate.What opportunities did you identifyin 2010?At the time, the asset management industrywas mature with entrenched incumbents andstrong brand power. Disruption required akeen eye for what was missing. Asset managerswere pushing products, while advisors neededsolutions. IFAs were treated as a distributionchannel, but what they wanted were strategicpartners. Relationships needed to move fromtransactional to holistic. The industry alsofailed to recognise how rapidly financial advicewas evolving, leaving traditional distributionmodels ripe for disruption.Clients don’t payDFM fees for anadvisor’s compliancesystem, they pay forinvestment outcomesPMX is a DFM with an extremely stronginvestment management track record.Is there room for another asset manager?DFMs managing client money are investmentmanagers. Regardless of the peripheral servicesthey offer, their investment track record musthold up against all alternatives, net of all fees.Clients don’t pay DFM fees for an advisor’scompliance system, they pay for investmentoutcomes. While value-add services matter,they only make sense if the proposition iscompetitive.What makes PMX different from aninvestment perspective?When PMX launched, the industry was fixatedon star managers with high-convictionstrategies and portfolios with unstablerisk characteristics. These funds weredifficult to integrate into a structured adviceprocess, leading to erratic client behaviourand poor decision-making. We rejected thetrade-off between short-term consistencyand long-term performance, recognising thata disciplined approach could deliver both.Consistency compounds over time, improvingboth the client journey and the advisor’srole. We build portfolios with clear purpose,combining both the precision of science andthe art of design.Who is your ideal client?We work best with top-tier advisory firms andprofessionals who share a common vision andface similar challenges. Top advisors aspireto build financially successful businesses andachieve professional excellence and focus onwhat they enjoy the most. Like all specialists,they seek resilient, respected businesses withthe freedom to make their own choices.Yet, they’re often held back by non-coretasks, the workload of managing clientportfolios and inconsistent investmentperformance, which shifts focus away fromkey client conversations. PMX helps clearthe runway.What do advisors really get frompartnering with PMX?PMX removes obstacles, empowering advisorsto focus on what matters most – delivering anexceptional client experience while achievingtheir business and professional aspirations.Validation is straightforward. PortfolioMetrixdelivers consistent, market-leading investmentoutcomes and has been recognised globallyfor investment performance, WeathExplorerBrandon Zietsman, CEO andFounder, PortfolioMetrixBIOGRAPHYBrandon has been a key figurein the financial services industryfor many years, leveraginghis experience and an extensiveskill in various influentialroles. He started his career atInvestec in 1994, then joinedRMB Fund Managers to leadproduct development and thesales division. At PortfolioMetrix,Brandon has maintained hiscommitment to innovation andethical standards in the industry,leading a vibrant companythat has made an indelibleimpression on the markets inwhich it operates. He has a deepinterest in the issues that besetour society and humankind,completing a Master ofScience in Global Challenges(with distinction) through theUniversity of Edinburgh in 2023.32
2025 DFM GUIDE - INTERVIEWBLUECHIPtechnology, best DFM services, best risk profiling service andbest client service.Our advisor community speaks for itself – many of them areAdvisor of the Year and Practice of the Year winners and a largeproportion of top contenders use PMX technology to buildtheir submissions.Some argue DFMs are just an extra layer of cost.Your response?A fee is only a cost if it doesn’t translate into value. It’s moreintellectually sound to add up total costs rather than count“layers”. Whether bundled into a single manager fee or separatedacross multi-manager and fund fees, clients ultimately payfor asset allocation, selection, portfolio construction andmonitoring. The key is comparing total cost vs net outcomes.With nearly R100-billion AUM, we have significant pricingpower and NMG’s DFM survey shows that our underlyingmanager costs are less than half the industry average.Should DFMs be ranked in performance tables likefund managers?Yes, but with caveats. Comparing competing investmentpropositions is crucial, but large CIS fund managers (eg AllanGray, Coronation, Ninety One) often face a disadvantagerelative to DFMs submitting only model portfolio returns.Many industry awards and performance surveys fail toapply basic GIPS (Global Investment Performance Standards)principles, allowing for cherry-picking, opaque methodologiesand unverified numbers.The key is transparent, independently verified rankings,ensuring a level playing field across DFMs and asset managers.What will be the biggest challenges facing DFMs in thenext decade?Many DFM models are unsustainable and already show signsof strain. The entire market may benefit from DFM-likefunctionality, but it’s less clear that traditional DFMs willremain the dominant providers of these solutions.Expect creativity and competition as alternative investmentintegration models emerge. Many firms need support but don’tnecessarily need a traditional DFM structure – but they doneed something. At the same time, mainstream assetmanagers won’t go quietly into the night. DFMs will have towork harder to prove their investment credentials, whiletraditional managers will continue evolving from productproviders to solutions businesses.Final thoughts?PortfolioMetrix was founded on the principle that investmentmanagement and financial advice must work in tandem.As the industry evolves, success won’t be measured justby performance charts or service layers, but by the abilityto help advisors build stronger businesses, keep clientsinvested and deliver truly differentiated value.33
