Working with product providers is unavoidable as an adviser. In an ideal world, there will be a healthy relationship that leads to the best outcome for the client.
But the FCA has recently criticised a number of set-ups between advisers and providers that either mimic pre-RDR arrangements or create the potential for detrimental client outcomes. So how can you ensure you stay on the right side of the regulator?
1. Beware of long-term arrangements. Setting up agreements with product providers over a long period of time is more likely to lead to bias than shorter-term agreements. However good an arrangement, be aware that it could sway your feelings towards an adviser, which could impact client planning.
2. Take care when selecting providers for a panel. Providers should make it onto your panel because they offer the best solutions for your clients, not because of any benefits they are offering to you.
3. Establish committees to oversee adherence to policies. With the support and challenge of risk and compliance, committees should ensure policies are adhered to and tackle any discrepancies.
4. Ensure detailed analysis of any provider before entering into agreements. This should not only secure your confidence in the firm but also make sure any compliance needs are met.
5. Don’t be swayed by provider support. Of course, it is fine to make use of educational tools that providers offer. But the first reason for choosing a provider should be whether they are right for your client.
