The importance of a well-designed and consistently applied Centralised Investment Proposition (CIP) that meets the needs of a firm’s target market cannot be overstated from a regulatory perspective.
A robust Centralised Investment Proposition (CIP) helps firms deliver good client outcomes, improve consistency, increase operational efficiency and reduce the risk of unsuitable recommendations. A clearly defined investment proposition provides advisers with a structured framework for making recommendations and gives clients confidence that investment solutions are based on a consistent and well-governed process.
Many advisory firms utilise third-party investment research, model portfolio providers and discretionary investment managers. Whilst these can provide significant benefits, it remains the advisory firm’s responsibility to ensure that the solutions selected are appropriate for their target market, have been subject to robust due diligence and continue to be reviewed on an ongoing basis.
If you are reviewing your Centralised Investment Proposition (CIP), consider the following questions to help assess whether it remains appropriate, well governed and continues to deliver good client outcomes.
Meeting individual client needs
- Identify the different investment needs of different client segments? For instance those who receive regular reviews and those who don't.
- Offer a different solution to clients with different investment terms?
- Offer different solutions to cater for different levels of investment knowledge and experience?
- Cater for clients with ethical preferences.
- Take account of the client's individual tax position and changing tax legislation? For example would recommending multi asset fund cause the loss of tax free dividend and fixed interest entitlements?
Risk
How are the investment recommendations aligned with the client’s risk profile? How is risk ‘measured’? Do you employ a methodology that you understand and could explain?
Reviews
How often do you review your investment proposition and is this documented? How do you carry out the review and is it truly whole of market?
What due diligence have you carried out on your investment providers?
Whole of Market
Do you consider the full range of retail investments as an independent firm? Can you explain and have you documented why you have excluded certain investments like Investment Trusts, passive funds or ETFs?
When did you last compare your investment proposition with the rest of the market?
How we can help
ComplyMe can sense check your current investment proposition and provide you with a report summarising how it works and meets your clients’ needs as well as recommending any changes that might be needed.
Alternatively we can help you modify your existing proposition or design a new one to best meet the needs of your clients.
Contact us or complete the enquiry form for a free consultation.
Related services
Due Diligence
Due Diligence is about going beyond just comparing charges or referring to industry awards. It is about a more in depth assessment of providers looking at areas such as financial strength and viability, service and support as well as areas like Risk Management, Data Protection and Disaster Management.
Complaints Handling
We can handle the complaints process from the outset and where appropriate undertake the necessary redress calculations.
The Right Service
ComplyMe have extensive experience in pre-approving advice, giving you the comfort that your files are being reviewed by suitably qualified individuals.
As part of this service we will provide a report with our feedback including guidance and recommendations where appropriate.
