The Path to DFM
Written by Charlie Palmer on 10/08/2018

Task: Get a DFM licence Aim: to add value to your practice

Aim of this article: Cost and time spend for your firm and IFAC

Application to the FCA: £5k; IFAC half a day FCA questions post submission; fiirm two days, IFAC three days

Business Plan: firm half a day; IFAC one day

Governance: you need two qualified, one experienced, DFMs. IFAC can supply the second for £500 pm.

Capital Adequacy: Quaterly expenditure requirment; Your income needs to be able to drop to zero for at least one ¼ of the year without you going out of business. So capital must support one quarter of expenses. Expenses defined as fixed ie. One quarter of your annual PII / rent / utility bills / FCA costs / fixed salaries (not yours). Salaried staff

ICAP: You need to produce an Individual Capital Adequacy Assessment document. This is your own document to state how much capital in addition to the above two you think you need to keep to cover your risks. It is unlikely to mean that you need cap ad of more than €50k. But you need to produce a document like this. The output is presented, in summary, as a Pillar 3 statement – that has to be published on your website and states how much capital you actually hold Two days for firm, One day for IFAC.

Risk assessment: You need a risk assessment reflecting your business. One day for you, one day for IFAC. PII: You need a quote, but premium may not rise for IFAs. Register for VAT. However you cut it up, DFM is vatable. The following documents are produced for you by IFAC. Compliance monitorin programme, Compliant personal accoun tdealings procedure Complaints procedures Privacy Policy Conflict of interest policy Best Execution TCF Guide to AML Crime prevention policy Whistleblowing policy Gift and inducemnets iregister Complaince manaual T&C manual Procedure Manual DFM Investment management agreement Biz Continuity Plan Disaster Plan Ongoing FCA returns. Not bad for £350 pm - I'd say so. Speak to Charlie.palmer@ifac.eu for more information on this. see more on DFM work we do at IFAC here http://www.ifac.eu/ken-baksh-market-report

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