• Firstly, is your business going to be ‘independent’ or ‘restricted’ or offer flavours of both?
• Does your business use whole of market funds even if ‘restricted’ to providers / products, or has it also adopted a specific range of model portfolios?
• Do you know what service proposition your firm will offer and the corresponding adviser charges?
• Do you know which platforms / providers can facilitate the adviser charging profiles you’ve decided to use?
• Do you know how re-pricing will affect the actual value of your adviser charges, if they’re based on basis points?
• Do you know how all the above synchs with your attitude to risk profiling process, Capacity For loss (CFL) criteria, Synthetic Risk Rated Instruments, portfolio planning tool, back office system, automated valuation service and annual review process?
• What does your PI insurer think of it all? Do they give you a discount or pay your research tool subscriptions because they know the above is in place and are they prepared to share the reduced risks with you as a result?
The above might look a bit daunting – but there is help at hand and following core themes is critical to answering the questions and being able to sleep at night in the run up to RDR and beyond.
Independence and integrity
Is your firm using the ‘principles’ it’s developed or have you had to compromise them to fit the tools available in the market? Can you say with absolute integrity, that your investment management committee have been able to embed their principles and processes (e.g. active vs. passive / DFM vs. in house control) and can that be incorporated consistently throughout your ‘systems & controls’?
Some adviser tools allow firm’s specific ATR, CFL thresholds and Strategic Asset Allocations to be configured by head office and filtered down to branches and individual advisers. Some tools restrict you to their definition of risk categories.
Delivering real value
Are you sure implementing the tools you’ve chosen is going to reduce time and cost or increase it? Does your para-planner walk around with a smile on their face or scowl!?
