Due diligence

Download our platform due diligence factsheet.


Scrutinising your scrutiny

In February 2016 the FCA published its Thematic Review TR16/1, which assessed the quality of due diligence work carried out by advisory firms. Following this review many advisers came in for criticism on the grounds that their research lacked thoroughness and objectivity – often because they were biased in favour of their existing providers.

When you consider the huge upheaval involved in switching platforms, this kind of ‘status quo bias’ is perhaps not such a surprise. However, the fact is advisers are now duty bound to ensure that any platform they recommend clearly meets the needs of their clients, and that their approach to selecting a platform – and then regularly reviewing that selection – fully complies with FCA rules and guidance.

Platforms must stand up

Of course, it is not just advisers who face an increasing regulatory burden these days. Platforms are also being placed under intense scrutiny – not least in terms of ever tougher capital adequacy requirements. This, combined with high re-platforming costs and falling yields, means that all but the most profitable platforms may soon be forced to carefully challenge their future strategy. As FinalytiQ put it in their Advised Platform Report 2016, proper due diligence requires:

“ There is a systemic shift happening in the platform sector and there are serious implications for providers, advisers and more importantly clients.

We’re all in it together

With so much to consider, and with so much importance being placed on those considerations, the prospect of undertaking platform due diligence may now seem more daunting than ever. The good news is, you are not in this alone. We regularly receive due diligence-related queries from advisers who are in exactly the same position as you, and we always endeavour to help as much as possible.

Assisting in this way has allowed us to identify the key areas that advisers seek information on, and in turn create the following due diligence guide. Shaped by your peers and the guidance issued by the FCA, it is designed to help you navigate the due diligence process as efficiently as possible. We think you will find it very useful, but if you need any information that isn’t covered, do not hesitate to contact our Business Development Team.