Octopus Investments, part of Octopus Group and provider of venture capital trusts (VCTs), has closed its DFM service to new customers.

Octopus has chosen to leave the DFM market as it believes is offering is no longer competitive.

Shareholders voted to close the DFM service on 23 February.

The Octopus Portfolio Manager (OPS) will be merged with the Volare range, managed by LGT Vestra, on 14 April.

Until 28 July Octopus will continue to hold the funds in its custody to allow adviser the time to complete the necessary paperwork to become a client of LGT Vestra or to transfer their clients’ assets to another provider.

Any advisers who wish to transfer client portfolios of liquidate assets before the merger on 14 April have been asked to confirm their plans with Octopus before 31 March.

Octopus told clients that whilst it will no longer provide a DFM service, LGT Vestra offers a discretionary service which it will share details of with clients.

LGT Vestra is a UK-based wealth management firm with around £21bn in assets under management. It is owned by private bank LGT.

The Volare fund range was launched in 2017 and the funds now have over £250m in assets under management, with the strategy holding over £7bn.

The ongoing charges figure of the Volare funds is higher than the OPM funds, but this includes LGT Vestra’s annual management charge of 0.35%. LGT Vestra also charge a 0.25% custody fee.

Octopus said it will be in touch with financial advisers over the new few days to discuss the charges and how they will vary from client to client.

In a statement Octopus Investments said: “Since we launched OPM twelve years ago, there has been a huge increase in the number of investment companies launching discretionary management services, with fund managers and technology-led platforms offering efficient access to high-performing funds at lower costs.

“While we are proud of the returns we have delivered for your clients, we do not believe that OPM is as competitive as other funds available on the market.”