AIFA has launched a platforms decision-making guide as advisers' due diligence methods come under increased regulatory scrutiny. Here are the key messages...
Interrogate your business strategy before deciding which platform(s) to adopt
-Undertake a thorough review of your business. Consider what advice solution you currently provide by canvassing clients.
-What additional services would your client like to see - devise questionnaires as to how you could improve your offering. Take tips from other advisers.
Ensure you understand the platform's credentials
-Compare different platforms across a broad range of criteria and use comparison tools. Request references from platform providers and get feedback from other advisers.
Examine the platform's financial backing
-How robust is it? Does it meet the appropriate capital adequacy requirements in the longer term?
-Get details form individual platforms or request information from Companies House.
Is it the right fit?
-Does is offer white labelling capabilities for client facing sites? Examine what training and support is offered. Is technical support available?
-Make sure the platform supports your business model and client segmentation strategy.
-To what extent does the platform integrate with existing systems?
Look at the platform's charges
-Does it offer unbundled charging?
-Are discounts available to clients through the platform?
-Can the platform facilitate your preferred method of remuneration?
-Will clients be charged for re-registration?
-Are there exit penalties for clients?
-Is technical support charged for?
Consider the platform's breadth of offering
-What tax wrappers are on offer and what are the dealing costs for investments and wrappers?
-Do investments on the platform meet the needs of you client bank?
-What tools are available - does it offer risk-profiling and asset-allocation tools?
Are supporting trust arrangements available?
-What currencies can the platform report in?
-What contingency and disaster recovery plan does the platform demonstrate?
Ensure you have a robust client segmentation strategy
-Can you demonstrate moving a client onto a platform is in their best interests?
-Establish "reasons why" explanation for clients.
-Can you evidence appropriate suitability documentation? Ensure documentation supports your platform model.
Adhere to ongoing reviews and audit requirements
- Do you have procedures in place for immediate and ongoing reviews?
-Do you have access to tools to support ongoing review and assessment?
-Have you assigned responsibility of the platform and review to someone?
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