Due diligence hub

Due Diligence Hub

As an adviser, the onus is on you to sift through a potential minefield of issues to find the resilient, well-run platforms that can safely be trusted to look after your clients’ assets. This process is what robust due diligence is all about.

To help you get the job done as efficiently as possible, we have created this Due Diligence Hub, featuring our own due diligence factsheet and valuable contributions from the insightful people at FinalytiQ, the lang cat and Platforum. We hope you find it useful.

FinalytiQ report

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Some say it’s rude to talk business, but advisers can’t afford to be shy when it comes to researching potential investment platform providers’ affairs.

In early 2016 the FCA set out its findings from a thematic review of the way advisers approach due diligence and research into products and services. They found that some firms don’t attempt to understand or challenge their own inappropriate preference for particular products, services or platform providers. This lack of objective consideration means many firms remain heavily biased towards the ‘status quo’.

The FCA also highlighted a lack of structure in some firms’ research and due diligence processes, and found evidence of retro-fitting due diligence to justify outcomes the firm had already decided upon. In addition, the review showed that some firms’ research was not always kept up-to-date or adequately challenged.

The IT could hit the fan

Regulation is not the only thing driving challenge and change in platform land. Six adviser platforms are currently in the process of moving to a new IT supplier, either because their existing technology is no longer fit for purpose or due to consolidation following a number of acquisitions in 2016. In total, an eye-watering £200 billion of customer assets are due to be migrated from one platform to another in the near future. Anyone who has been through a re-platforming exercise will know it is not easy, and there will inevitably be issues and challenges along the way.

'We need to think #@©%IT'

Profit may be considered a dirty word in some quarters, but when it comes to due diligence profitability is a very important consideration. Platforms that don’t make money may quickly become unsustainable, leaving the investors who use them facing major upheaval as they urgently seek a new home for their funds. It is worth bearing in mind that the platform industry as a whole reported a pre-tax loss of £19 million in 2015.

FinalytiQ’s Advised Platform Report

Offering a comprehensive analysis of advised platforms in 2016, FinalytiQ’s Advised Platform Report is a must-read for any adviser. The report includes extensive data and critical analysis on the financial performance of the 26 advised platforms which together account for more than 95% of assets in the advised platform sector.

Existing advisers Download report

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