Weekend Digest for Financial Planners/Advisers & Paraplanners (23rd & 24th March)


With the tax year-end approaching, The Chancellor’s Budget Speech and Cyprus literally in flames, this week must have been a very busy one for you all. So, I have decided to keep this week’s Adviser Digest really short with just 3 articles to look at.

Click on the title to read the full article (opens new window.) Enjoy…


FSA’s Rory Percival on Using DFMs

This audio piece is a 25 min speech by FSA’s Rory Percival for firms using DFM. He covered 5 key issues on the subject including

  1. Regulatory expectations when using Centralised Investments Propositions
  2. Split of responsibility on suitability between adviser and DFM
  3. Agreements between adviser & DFM
  4. Adviser charging via DFMs
  5. Maintaining independence when using DFMs

One interesting point is how a small disparity in the use of language between the adviser and the DFM can cause problems. For instance, the adviser might describe their clients ATR as ‘Cautious’ whereas the DFM might describe the portfolio as ”Conservative.’  Are they talking the same thing? This is what the Rory calls ‘Commonality of Language.’

And, did you know that ‘Outsourcing’ to a DFM  and ‘Referring’ to a DFM aren’t the same thing? No? Well, listen to the speech!


Client Reporting in a Goals-Based Framework

This article by Bob Dannhauser on the CFA Institute’s Enterprising Investors’ explores an assertion that many clients aren’t convinced that investment managers/advisers are earning their keep. This is because clients are overwhelmed with data on technical facts such as asset allocation and performance, instead of something that actually speaks directly to the clients end goals.

This is particularly relevant to advisers, especially in the way we present half-yearly or yearly updates to clients. Instead of focusing on performance data and benchmarks, presenting performance as a form of ‘progress report on the likelihood of achieving clients’ multiple goals’ is more likely to lead to a meaningful conversation between adviser and client.


SIPPs, Residential Properties and Self-Interested Parties

This article by Andy Leggett looks at the proposal in the Budget to consult on allowing SIPPs and SSASs to convert commercial property with unused space to residential property.

He examines the implications for the main ‘self interested’ parties – Platforms, bespoke SIPP & SASS providers, advisers and of course consumers.

Platforms may not necessarily like the idea, given the trend towards aggregating asset on platforms. SIPP and  SASS providers on the other hand think it’s the best thing since sliced bread.

Interestingly, contrary to the popular view that this sorts of scheme will drive up property prices, Leggett makes the point that converting unused commercial spaces into residential properties actually increases supply, which in turn drives down prices. However, if you put this in the context of other initiatives announced in the Budget, especially the ‘Help to Buy’ and Mortgage Guarantee schemes, which are likely to increase demand, I think the picture is less clear-cut.


I hope you have enjoyed this and hopefully it’ll make you job a little easier! As paraplanners, that’s what we do! As usual, thoughts and comments are welcome. Enjoy your weekend!






Abraham Okusanya
Abraham is the founder of FinalytiQ, a research consultancy for platforms, asset managers, and advisory firms. Recognised as one of the country’s leading experts in retirement income, platforms and investment propositions, Abraham has authored several papers on these subjects and delivered talks to the Personal Finance Society, The FCA and several conferences across the country.

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