Advisers are being exposed to accusations of negligent advice by the regulator because comparing charges for the most common outsourced investment options - multi-manager (MM) and discretionary fund managers (DFMs) - is "impossible", according to a damning report.
Advisers are prohibited from recommending clients use a centralised investment proposition (CIP) - the term for any 'standardised' investment solution such as outsourcing - without having carried out "adequate due diligence to ensure the CIP meets the needs and objectives of its target clients". Consideration of client costs is key in the eyes of the regulator, as stated in its July 2012 final guidance of the issue, Assessing suitability: Replacement business and centralised investment propositions. But an investigation by CWC Research and consultancy the lang cat found making cost an...
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