INVESTMENT ADVISER | ISSUE 09 2024 49
4 . Your choice of investment platforms
When did you last carry out a platform due diligence ?
The investment platforms you select should be appropriate for the different needs and objectives in the decumulation phase of the target market . Can the choice of platform address the client ' s needs and goals in decumulation ? You need to question whether your firm ’ s platform fees and charges are transparent , proportionate , and appropriate for the withdrawal strategy recommended .
Takeaway : Did you specifically look for a platform suitable for decumulation versus accumulation ?
5 . Third-party service providers
What third-party service providers do you use within your business ? How comfortable are you with their output about decumulation advice ?
Firms should complete effective due diligence and oversight on third-party service providers and tools for providing retirement income advice . It ’ s vital to question if the service providers ensure their CRP is appropriate for the target market . Data collection remains important even from a third party , as is using the data afterwards .
Takeaway : Are you capturing the data the FCA sought in their survey ?
6 . Product solutions
What product-based solutions do you use for decumulation advice , and do you understand the nuts and bolts of these solutions ?
Does your firm have a methodology for meeting your client ' s retirement income needs using the full range of solutions ? Is it written down anywhere ? What actions does your firm take when there isn ’ t a suitable product or solution to meet the client ' s objectives ? Do you operate on a time-horizon basis , and how do you manage short- , medium- , and longterm income needs ?
Takeaway : When did you last review the product-based solutions for decumulation advice ?
7 . Investment-based solutions
How does your investment philosophy differ in decumulation ? What solutions do you use and when ? When was this last reviewed ?
Firms should ensure that investment solutions are appropriate and correctly aligned to client risk profiles . The range of investment solutions used as part of its CRP needs to meet the needs of the target market . Has the research , analysis , and due diligence been carried out to ensure it ’ s the appropriate investment range ?
Takeaway : Are the investments and portfolios aligned with clients ' risk profiles in decumulation ?
FCA ' S ONGOING REVIEW
Due to the number of examples of poor practice , the FCA revisited the questionnaire it originally sent out . This time , firms are encouraged to review their initial FCA survey to understand if their management information is sufficiently accurate and advised to review the FCA ’ s ‘ good ’ and ‘ poor ’ practices against their CRP .
KEEPING UP WITH THE REGULATORY CHANGES
Advisers face multiple pressures when providing good retirement planning for their clients , requiring them to be highly skilled , adaptable , and continuously updated on industry trends and regulations . Despite these obstacles , advisers find ways to provide valuable guidance by staying informed , using advanced tools , and maintaining strong communication with their clients . It ' s a demanding but rewarding field .
YOU
CAN FIND OUT MORE ABOUT BROOKS MACDONALD ' S DECUMULATION SERVICE IN OUR GUIDE TO RETIREMENT INCOME SOLUTIONS .