Platforms and centralised investment propositions
Centralised investment propositions (CIPs) cover portfolio advice services, discretionary portfolio management and distributor-influenced funds, often accessed through platforms.
All too often the introduction of CIPs seems to have been driven by commercial objectives rather than clients’ financial planning needs. Many firms have simply developed a CIP to facilitate adviser charging and therefore a perceived compliance with the RDR.
The FSA has proposed a ban on platforms being funded by product providers and argues the current system, whereby the consumer pays for the platform service, hinders transparency.
The FSA has now begun a new phase of thematic work and will be making judgments on suitability of client outcomes, especially related to replacement business and CIPs, and including a direct assessment of firms’ systems and controls.