Fees
Discretionary investment management means you appoint a professional manager to make the day-to-day investment decisions in your portfolio for you, within agreed objectives and a risk level you’ve chosen. You set the destination, then the manager handles the driving – buying, selling and making rebalancing changes without needing to ask you each time.
You delegate the day-to-day investing decisions to a regulated professional, within limits you agree up front, whilst you get on with life.
| Discretionary | Advisory | DIY | |
| Who decides trades | The manager | You, after advice | You |
| Your involvement | Low (set objectives) | Medium (approve each step) | High (do it all) |
| Best for | Hands-off investors | Those who want advice but final say | Confident, hands-on investors |
| Typical cost | Management fee | Advice + dealing fees | Platform + dealing fees |
Discretionary management carries a management fee, usually a percentage of the amount invested. The important questions are what the fee covers and whether other costs (custody, underlying fund charges, trading) are included or added on top – which is why fee transparency matters.
It suits people who want their money professionally managed and prefer to delegate the day-to-day decisions, while still setting the overall risk level and goals.
It can also suit those without the time or wish to monitor markets themselves. Whether it’s right for you depends on your circumstances; if unsure, consider speaking to a regulated financial adviser.
SCM Direct is a discretionary manager. After completing a short risk questionnaire, you choose the portfolio/s you wish to invest in, from eight risk-graded portfolios, SCM makes the day-to-day decisions for you.
SCM’s portfolios are built from low-cost ETFs at a typical 0.85% all-in cost, which includes management, custody, underlying fund charges, and trading. No performance fees, initial charges or exit penalties. The founders co-invest alongside clients with their own money on the same terms and fees.
Capital at risk. The value of investments can go down as well as up, and you may get back less than you invest.
That a regulated manager makes the buy/sell decisions for your portfolio within objectives and a risk level you’ve agreed, without needing to confirm each trade with you.
With discretionary, the manager acts within your mandate without checking each decision. With advisory, you receive recommendations but make the final call yourself.
No. Your investments are held in your name, you set the objectives and risk level, you receive regular reporting, and you can end the arrangement. You delegate the day-to-day decisions, not ownership.
It depends on the value of professional management and convenience to you, and on whether the all-in cost is competitive and transparent. As always, costs reduce returns, so what the fee includes matters.
Typically, an independent custodian. SCM Direct uses Hubwise Securities Ltd, with your assets held in your name.
