Reading Mark Polson’s latest missive in Money Marketing, it seems that many advisers are treading a thin line with the regulator with their investment management choices. It’s a great article, particularly as it made me realise that every fault and problem he raises with CIPs is addressed and eliminated within the PortfolioMetrix proposition.
In essence, Mark points to five main weaknesses with CIPs as we know them:
Advisers only using one type of CIP
The wide range of asset allocations that can appear in portfolios that, according to the label, should have the same risk profile
Re-balancing occurring without the client’s consent – albeit, often for all the right reasons
Clients lying dormant in old versions of models
A lack of transparency around the composition of DFM model portfolios.
Our portfolios and technology bring together the FCA requirements and PROD. They support suitability and allow advisers to customise the right portfolio with all the characteristics to meet their clients’ needs, wants, wishes and desires while accounting for their individual appetites for risk.
Designed to comply
It’s no happy accident. We designed the proposition with an understanding of where the future of CIPs was heading – it’s what helps to make us different to run of the mill DFMs. We’ve been working this way since the company was launched in 2010, with an awarding winning performance track record that fits with MiFID II.
Rebalancing is a good case in point. With our discretionary powers, all our adviser partners have to do is ask their clients once to allow us to rebalance on their behalf, whenever this is necessary (not just because of a date on the calendar), and neither the advisers or their clients have to give it another moment’s thought. We don’t need to meet with advisers’ clients to do this, so the relationship between adviser and client remains direct and undiluted.
Mark predicts that we will see further specialisation in 2019 and beyond, with more advisers heading towards gaining discretionary permissions, outsourcing or having to spend time and effort developing very good processes and controls to plan and manage portfolios themselves. He may well be right, but getting the necessary infrastructure in-house is expensive and is probably out of reach for most smaller adviser firms.
If you’d like to know more about our customised proposition, check out this short video that outlines how it works. If you’re an adviser and you’d like to find out how switching to PortfolioMetrix could keep you on the right side of the regulator plus give your clients a solution that is a better fit for their particular needs, please just drop me an email: firstname.lastname@example.org.