Weekend Digest for Financial Planners/Advisers/Paraplanners (27th & 28th April)


Welcome to this edition of the Weekend Digest. The FCA Platform Paper (PS13/1) was The Story of the Week and I’ll imagine the excitement will continue in the coming weeks.

You can read the key points of the paper pretty much everywhere, although the actual paper itself is only about 40-page long and clearly a recommended reading for anyone interested in the subject. Happy reading!

I have decided that ‘NO ONE’ can write a better blog on this than the Langcat and you can read his thoughts here too

On thing I do think is worth pointing out is this; it is the adviser’s responsibility to make sure that the platform they use comply with the rules, specifically on presenting funds without bias.

Refer to Section 6.1E.9 Using a platform service when advising 

 A firm must not use a platform service as part of a personal recommendation to a retail client in relation to a retail investment product unless it has satisfied itself that the platform service provider, and its associates, only receive  remuneration for business carried on in the UK which is permitted by the rules in this section.

and again to 6.1F  Using a platform service for arranging and advising;

Client’s best interests rule and using a platform service 

6.1F.1 R A firm (other than a platform service provider) which: 

  1. (1) arranges for a retail client clients to buy a retail investment product products or makes a personal recommendation recommendations to a retail client clients in relation to a retail investment product products;  and
  2. uses a platform service for that purpose; 

must take reasonable steps to ensure that it uses a platform service which  presents its retail investment products without bias.

This clearly is a big one for may advisory firms, especially the small ones. The new requirement to scrutinise platform-fund manager relationship, especially where there’s a marketing pact between them, is now  a key part of the adviser platform due-diligence exercise.

Remember when platforms were given the responsibility to police adviser charging? Many of they required advisers to get wet signature from clients to make sure that adviser were complying with the rules. Well, as part of their own  platform due diligence exercise, advisers may now need to have an extensive disclosure document that they need platforms to sign to confirm that they are complying with the rules.  Wet signature, in blood!

This additional responsibilities means that advisers have to take another look at the number and type of platform they are using. If you are using 2 platforms in the main, there is a lot of work to do to make sure they are complying but if you use 5 platforms, like we have seen some firms do, well… they your time and cost of your platform due diligence (even if you get someone else to do it for you) just went up significantly. If you use wrap-type services with history of transparency, with all rebates going back to clients, then there is less work to do compared to when using platforms with largely bundled approach.

Anyway, enough about platform! The following articles a are essential reading for advisers working or looking to work with small business owners and entrepreneurs.


Succeed With Small Business Owners 

This article  by Ann Marsh in Financial Planning Magazine looks out why and how advisers  can work more effectively with small business owners.  In a sense, this goes against the conventional wisdom; as most advisers tend to prefer high-net-worth baby boomer  who already have substantial wealth but as these client enter the de-cumulation stage, their wealth (and the adviser’s income from the client) tend to fall. Instead, working with younger entrepreneurs means that advisers will starting with far less fund under management but this is bound to grow because clients’ wealth improves, for instance as a result of sale of their business in the future.

Marsh offers some simple yet powerful ideas about how to acquire the these sorts of clients – for instance by building a small team of specialists including Accountants, Lawyers, Insurance Agents, Web Developer and even a Banker. The key is making sure you have the right expertise within the group to help the clients.

Another idea is to court bankers – yes, a local business bankers who will be useful (hopefully) for existing clients looking for a line of credit as well as by referring new clients to the adviser. Off course this may not work where the bank have their own financial planning  arm but with many of them closing shop, this is an excellent opportunity for independent planners.


Entrepreneurship 101: For Advisers Working With Small Business Clients

 This Financial Planning Magazine article gives 5 basic questions/tips for advisers working with entrepreneurs and small business clients. Perhaps the most important question is – Does the business make money? Just because the business owner is passionate and their door is open for business doesn’t actually mean they make money.  The other useful point is the to help business owners see the blind spot in their own business and personal financial plan. Entrepreneurs can be so focused on the success of their businesses, they can sometimes miss the complexities of protecting their own wealth. It’s the advisers job to help them understand the vulnerability of their business.


 I hope you have enjoyed this and hopefully it’ll make you job a little easier! As outsourced paraplanners, that’s what we do best! 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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