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Top tips on platforms due diligence
07 September 2010
AIFA has launched a platforms decision-making guide as advisers’ due diligence methods come under increased regulatory scrutiny. Here are the key messages... Interrogate your business strategy before deciding which platform(s) to adopt -Undertake a thorough review of your business. Consider what advice solution you currently provide by canvassing clients. -What additional services would your client like to see - devise questionnaires as to how you could improve your offering. Take tips from other advisers. Ensure you understand the platform's credentials -Compare different platforms across a broad range of criteria and use comparison tools. Request references from platform providers and get feedback from other advisers. Examine the platform's financial backing -How robust is it? Does it meet the appropriate capital adequacy requirements in the longer term? -Get details form individual platforms or request information from Companies House. Is it the right fit? -Does is offer white labelling capabilities for client facing sites? Examine what training and support is offered. Is technical support available? -Make sure the platform supports your business model and client segmentation strategy. -To what extent does the platform integrate with existing systems? Look at the platform's charges -Does it offer unbundled charging? -Are discounts available to clients through the platform? -Can the platform facilitate your preferred method of remuneration? -Will clients be charged for re-registration? -Are there exit penalties for clients? -Is technical support charged for? Consider the platform's breadth of offering -What tax wrappers are on offer and what are the dealing costs for investments and wrappers? -Do investments on the platform meet the needs of you client bank? -What tools are available - does it offer risk-profiling and asset-allocation tools? Are supporting trust arrangements available? -What currencies can the platform report in? -What contingency and disaster recovery plan does the platform demonstrate? Ensure you have a robust client segmentation strategy -Can you demonstrate moving a client onto a platform is in their best interests? -Establish "reasons why" explanation for clients. -Can you evidence appropriate suitability documentation? Ensure documentation supports your platform model. Adhere to ongoing reviews and audit requirements - Do you have procedures in place for immediate and ongoing reviews? -Do you have access to tools to support ongoing review and assessment? -Have you assigned responsibility of the platform and review to someone? Published by IFAOnline
