Whilst the FCA agrees that model portfolios increase efficiency and provide a suitable investment service to clients, they also stress three areas of concern; comparability, choice, in terms of manager and value for money.
Due diligence is key here; you need to be able to clearly explain all the costs associated with using a model portfolio, especially if the investment is sat on a platform, and you need to be able to explain the costs, in terms of value for money for the client.
This raises the question of whether a single platform is suitable for all clients, where investment amounts may vary considerably; the principals of treating customers fairly (yes TCF hasn’t disappeared) are relevant here. And also, whether a limited number of portfolios is sufficient to cover all possible needs.
Whatever your current investment solution for clients looks like, can you clearly identify each client in each portfolio on your CRM system? We would expect you to be able to do so on the investment managers website but on your CRM system can you link each policy to the portfolio being used, along with the policy holders overall attitude to risk/capacity for loss? And if you can – have you?
Anticipating what the FCA may ask of you, we believe being able to analyse the portfolios by plan type, service proposition, age, attitude to risk etc. will be crucial in providing, in a timely and stress free manner, whatever information is asked of you.
If you would like advice on how to make or add the necessary links on your CRM system, please don’t hesitate to contact us here.