Advisers must take care with outsourced investment

Advisers must take care with outsourced investment

Advisers wanting to outsource investment processes should be wary of the possible risks, a specialist has warned.

David Gurr, founding director of due diligence firm Diminimis, said IFAs could be tempted to outsource the process.

He said: “Adviser firms are finding it increasingly challenging to put the systemised investment process that the regulator now demands in place, both from a cost and compliance perspective.

Article continues after advert

“This is resulting in growing numbers of them using third-party investment solutions to create what they hope will be a more cost-effective and risk-controlled alternative to carrying out all investment management in-house.”

However, Mr Gurr said advisers using a third party should consider what responsibilities remained with them, adding: “The danger is that advisers assume discretionary investment managers are responsible for more than they actually are.”

Lawrence Cook, director of marketing and business development for Thesis Asset Management, said the firm had seen a surge in adviser interest in its model portfolios following the launch of its portal to FE Analytics on 30 March.

Adviser view

Peter Montague, managing director of Essex-based Montage Wealth Management, said: “If you have the right agreement with the right provider of investment services you should clearly set out where responsibilities lie.”