Due Diligence

The importance of due diligence

Are you carrying out due diligence consistently and with your clients’ best interests in mind? You should be, according to the Financial Conduct Authority.

Initial investigations by the FCA last month found that, while some financial advice firms demonstrated some good practice regarding due diligence, many were not showing that same care of assessment across the wider range of services and platforms.

In their six-page thematic review, the regulatory body determined that some advisers were guilty of ‘status quo bias’, continuing to recommend preferred platforms without undertaking the required research. On the same lines, others were accused of tailoring their assessments to a service or platform that had already been chosen prior to due diligence being carried out.

Most worrying of all, it was deduced that within the sample of IFAs, some firms were putting themselves first, making choices based on how beneficial the service was to them rather than their clients. The FCA declared themselves “disappointed” with the lax attitudes to due diligence displayed by these firms – and stressed that this initial thematic review was only the start of their work in this area.

Financial advice firms should always be looking to conduct thorough research and perform objective due diligence, not only to comply with regulations, but also to provide the best service possible to clients.

Jacana can provide you with all of the information required to satisfy the various checks and assessments, certifying that we are fit and proper to act as your service deliverer.

Our ISO 9001 accreditation, achieved in January this year for our income reconciliation service, certifies our ability to consistently provide products and services that meet the needs of our clients. The internationally recognised standard is awarded to providers who are committed to development and improvement, with ISO-accredited companies expected to evaluate their systems and processes on a regular basis.

To that end, Jacana conducts its own due diligence on all of the providers of our services, including our remote document storage, ensuring that they meet our lofty standards on behalf of our clients. This diligence also extends to the hardware we use. Although no client data is stored or held on our encrypted laptops, the computers are still protected by FCA-approved security software.

All of our staff are checked and vetted thoroughly prior to their employment, and sign a client confidentiality agreement before commencing work with us. Two members of our team work on one client at any given time in accordance with compliance standards.

Thorough and consistent completion of due diligence should be high on your list of priorities, particularly given the FCA’s renewed focus on the matter in the months ahead. With Jacana, you can rely upon a trusted, accredited service provider, with a proven track record in compliance and client satisfaction.

To read the FCA’s full report on research and due diligence, click here.