This is where discretionary fund managers (DFMs) come in, as investment advisers increasingly focus on the wealth-planning aspects of their roles, handing the investment decisions to DFMs.

A recent report published by the British Bankers’ Association, entitled ‘A Wealth of Opportunities’, states at the end of 2013 UK private banks and wealth managers were responsible for managing or administering £524bn worth of assets in the UK on behalf of investors.

Nick Georgiadis, head of the DFM team at Cazenove Capital Management, says: “Our role is to work with advisers and encourage them to outsource the specialised investment work for their clients, while the adviser focuses on their core strengths of overall wealth planning, pension planning and tax planning. So really it’s about experts in their respective fields, as opposed to trying to cover all bases.”

According to Mr Georgiadis, a typical DFM client is likely to have at least £200,000 or more to invest.

He observes: “Traditionally, 10 to 15 years ago advisers would have done the investment work as well as the overall wealth-planning work. That was pre-RDR, so it wasn’t just the advent of the RDR that encouraged advisers to start working with DFMs.”

Feeding into all this is the idea of ‘investing for outcomes’, a concept that is gaining traction in the investment industry. It revolves around the idea that investors decide what outcomes they want from investing, which in turn helps advisers construct portfolios to achieve these goals.

The government’s pension reforms are also behind this concept, as investors will be left with more choices at retirement and easier access to their pension pots. A raft of new products has come to market in response to the demand for outcomes-based solutions.

Matt Lonsdale, head of intermediary business development at Thomas Miller Investment, suggests: “Investment portfolios should be created to answer the most important question to be asked of any investor, ‘What do you need the money to do?’”

But he warns against placing investors in generic “risk buckets”, as some DFM solutions are prone to do.

“We are at risk of devaluing the investment industry by taking the easy route of sticking clients in a ‘risk bucket’ instead of trying to achieve a return they need. People do not invest to find out their attitudes to risk, they invest to make money,” Mr Lonsdale notes.

Now the onus is on the adviser to choose a suitable DFM to work with, but Mr Georgiadis is witnessing changes here too.

“I think some of the changes post-RDR have perhaps subtly changed the way the relationships work but advisers have become a little more focused on the due diligence side of things, making sure they have done a lot of work in terms of which DFMs to appoint.”

Ellie Duncan is deputy features editor at Investment Adviser