In a recent meeting I had with someone who I won’t name, but who holds a fairly key role in dealing with many IFAs across the country, I was told that the FSA are going to be concentrating on investment processes as a key theme going forwards.
Fair enough, I thought, although to be fair, haven’t the FSA already been doing this for some considerable time, so it’s case of nothing new there? “Oh no” I was told, “not so” and I have to say that the finger wagging in front of me really didn’t help. The next line might come as a shock, so prepare yourselves; I repeat I was then told “The FSA are going to be pulling apart anyone that doesn’t use DFMs for most of their clients as that is the approach they now prefer.”
Can I just say that if you have had a visit from such a person and are panicking, breathe easy. The fact that people are coming out with such nonsense is best alarmist and at worst smells like profiteering from your clients and your business.
I should point out that I don’t represent the FSA so I may have got this horribly wrong, but in my mind such a statement about DFM being the sole route to consider is plain wrong. DFM represents one option you might or might not consider for your clients, but it is not an issue that is being forced on advisers to adopt.
We all need to control risk and have a formulised investment process, but that doesn’t have to mean outsourcing your entire function out of fear and concern. It might suit some advisers and it might suit some clients, but it is no more than that. You are not going to be turned into a sales rep for the DFM industry.
So if you come across anyone saying this please send them to me.
Philippa Gee is managing director at Philippa Gee Wealth Management