Delving into the depths of due diligence

Andy Baxter

The FCA states in its one-minute guide to due diligence that advisers should “conduct their own research into products and providers”.

And exactly how am I – a little ol’ IFA toiling away, trying to earn a crust, servicing and advising clients, dealing with FCA regulations, paying wages, FSCS fees both annual and interim, FCA fees, CCL fees complying with data protection, record keeping, paying for my own compliance costs, doing six-monthly Gabriel reports, maintaining CPD as well as exam study; also trying to have a family life, the odd little bit of time for myself occasionally as well as maintaining a home and garden, and walk the dog – supposed to drill down into the very deep, dark, murky, depths of say Aberdeen, or JP Morgan, or BlackRock to determine if such companies are “breaking rules designed to protect clients’ cash in the event of a bankruptcy” or the myriad of other compliance requirements they are supposed to meet?

What size budget of my already squeezed margins am I to set aside and how many auditors, forensic accountants, compliance specialists, and file checkers am I supposed to assemble?

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Do I then simply walk up to the front door of Aberdeen and say: ‘Excuse me, my team and I need to conduct a due diligence audit as I’m thinking of advising a client to invest in this year’s Isa subscription to your emerging equities fund. Do put the kettle on please we may be here for a few days.’

If the FCA, the financial regulator which has a statutory duty to ‘regulate’ with a budget of £446m, cannot do it how in this wilderness of financial services can I?

I would really love to know.

Andy Baxter


Wealth Management

Newton Aycliffe

County Durham