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Guide to due diligence

    Guide to due diligence


    The Financial Conduct Authority is not prescriptive about what is a reasonable amount of due diligence.

    But a key takeaway from the Financial Conduct Authority’s recent probe of adviser’s due diligence processes is “client is key”.

    By making sure everything you do is customer-centric, i.e. all research and due diligence is effected on their behalf, advisers should be confident they will not incur the wrath of the regulator.

    Yet an adviser still has to make a living – how do you make sure you recommend the best solution to your client and make a profit?

    This guide will explore regulatory requirements for due diligence, whether you can rely on a provider’s marketing material and risk assessments plus what the repercussions are of your due diligence processes not being up to scratch.

    Supporting material produced by; David Heffron, head of financial services regulation at Pinsent Masons; Keith Richards, chief executive of the Personal Finance Society; Richard Nuttall, head of compliance policy at Simplybiz; Aileen Lynch, head of technical for SimplyBiz; Ben Wright, head of technical services and research for Tenet; and Sheriar Bradbury, managing director of Bradbury Hamilton.

    In this guide


    Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

    1. What sort of culture does Mr Heffron say should be cultivated by actively researching alternatives?

    2. According to the FCA’s review, how many firms had only carried out due diligence after prompting?

    3. Upon what does Mr Richards say advisers cannot rely, when it comes to due diligence?

    4. What does Ms Lynch say is vital for all advice firms to understand?

    5. For what eventuality should advisers brace themselves if there is evidence of poor outcomes, says Mr Wright?

    6. How many pillars are there in getting advice right, according to Ms Woodall?

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