Discretionary Management  

DFM due diligence hub launches

DFM due diligence hub launches

An online discretionary fund management due diligence system has launched today (February 5) to help advisers re-evaluate their investment propositions.

The DD hub, which is free to use, gives advisers access to due diligence responses from discretionary investment managers, tackling the issue of delays and inefficiencies of traditional questionnaires. 

In addition, advisers can put together their own questions and manage and record the due diligence process to create a compliance record. 

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DD hub has been created by David Lee, a founder of Defaqto, and Chris Jones, formerly strategic partnerships director at Sipp provider Suffolk Life.

It launched with 18 discretionary investment managers and about 100 IFA users following a pilot stage.

Regulatory expert Rory Percival said: "Research and due diligence has long been an area of concern for the FCA. Along with risk profiling and consideration of costs, it is has been one of the key drivers of unsuitable advice when not undertaken appropriately.  

"The new Prod Handbook also places emphasis on research and due diligence, requiring firms to consider their client bank and select products and services geared for their clients."

David Lee, director of the DD hub, said: "Unlike the due diligence templates that litter the market, DD hub has been built to help advisers keep on the right side of the regulatory fence. 

"The system provides a framework in which the adviser can select the questions that are most appropriate to their clients, manage the due diligence and selection process, store their work and monitor selected discretionary managers for any changes."

Alastair Whitehead, chief executive of chartered financial planner Ergowealth, said advisers needed to regularly re-evaluate and re-validate their central investment proposition and platform choices to prove suitability as part of their ongoing market due diligence.

He said: "It can be an onerous and time consuming process. But this is where DD Hub comes into play by providing a technological solution with online access to a constantly refreshed library of key RFI data maintained by investment managers together with a range of easy-to-use online tools to help advisers tailor their research with reports and comparative analysis."