Do you need a prod about PROD? The Product Intervention and Product Governance Sourcebook – known as PROD (maybe because PIPGS isn’t the most attractive acronym), is part of MiFID II but it’s something many advisers are only now starting to address.
Because of this, there are a number of articles and papers being published which outline what PROD is and why advisers need to act. What we haven’t seen before though, is anything that provides practical help and guidance as to how to actually do it.
With this in mind, we decided to take some action and the result is a paper that gives practical guidance for achieving compliance with PROD.
Our paper is being serialised by Professional Adviser and the first of three segments was published today (27 November 2019).
This first segment covers the introduction and what the regulatory consultants who attended our round table said about how advisers can ensure they are compliant, while at the same time driving benefits for their business.
The next instalments will feature a proposed PROD methodology and case studies that demonstrate how advisers can create an approach to meet the needs of their individual businesses.
Two key points about the regulation that advisers should note are:
PROD is a set of rules and advisers cannot delegate responsibility.
Advisers who fail to implement PROD effectively face the prospect of being severely punished by the regulator.
However, it’s not all bad news. Implementing a successful PROD approach will aid expectation management between advisers and clients. It also provides an ideal opportunity for good advisers to differentiate themselves from the rest.
Practical, Repeatable, Organisation-wide and Documented
While PROD is an abbreviation and not an acronym, we think there is merit in using the acronym as a reminder of how to tackle it.
Your approach must be: Practical, Repeatable, Organisation-wide and Documented.
Although potentially challenging to start, there are many benefits advisers can gain from formulating and implementing a solid PROD approach. We believe our paper lays out how to do this in a straightforward and easy to understand way.
The next instalment will be published by Professional Adviser on Wednesday 4 December, with the final one on appearing on 11 December. We’ll be publishing the whole paper to coincide with the final instalment. If you’d like to register for the whole paper, please follow this link and we will ensure you receive a copy.