Outsourcing improves your ability to meet your regulatory responsibilities

The FCA’s new Consumer Duty rules mark a major change in the way financial services are regulated. They place a strong emphasis on prioritising the needs of your clients and demand a cultural shift in the way all financial advisers operate.

With the rules making regulations more complex and the choice of products continuing to expand, providing a streamlined investment service has never been more complex. At the same time, the advice industry is under pressure from a variety of sources including a greater awareness of fees and new technologies.

In such tough conditions and with more to do, it is perhaps not surprising that 12% of financial advisers are looking to sell or exit the market, according to a recent NextWealth report.

For many years now the FCA’s regulations have required all firms offering investment services to meet a number of standards. They include making sure the solutions and products they recommend meet the needs of one or more identifiable target markets, are distributed appropriately and deliver good customer outcomes.

Firms will need to demonstrate they can achieve good service across the standards set out in these four areas:
 

Access extensive resources

Many of the firms that have retained their investment services in house have developed a centralised investment proposition (CIP) and centralised retirement proposition (CRP). However, this approach requires extensive resources as well as the flexibility to respond to evolving customer needs and an evolving regulatory landscape.

There are many risks to your business of getting things wrong, which need to be managed carefully. These include risks that come with the regulatory burdens involved with constructing and managing portfolios to meet the needs of different clients. By outsourcing your services, you can reduce the risk and administrative burdens.
 

The power of two

Partnering with a firm that is dedicated to investing and with extensive resources brings a powerful extra dimension to your client relationships. Investec Wealth & Investment (UK) offers the reassurance that comes with being one of the UK’s largest and best-known asset managers. Working together, we help advisers focus on managing their businesses and looking after their clients, while also keeping them updated with regulatory requirements.

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The information contained within this brochure does not constitute financial advice or a personal recommendation. Investors should remember that the value of investments, and the income from them, can go down as well as up and that past performance is no guarantee of future returns. You may not recover what you invest. Tax treatment depends on individual circumstances. All statements concerning tax treatment are based upon our understanding of current tax law and HMRC practise and can be subject to change.