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View from Standard Life: Why centralised processes are so important


Times change and the market today is more heavily regulated than ever. A centralised investment proposition (or CIP) is defined as ‘a standard approach to providing investment advice, including how the client’s risk profile is assessed through to a centrally agreed investment solution’. In 2012, the FSA identified some concerns in this area, as part of its Retail Conduct Risk Outlook – but now recognises the potential benefits of CIPs for both advisers and their clients.

It’s vital that adviser businesses can provide evidence of their research and due diligence, as the FSA carry out thematic reviews. Centralisation means giving advice in an efficient and consistent way to clients with similar needs and objectives, including those relating to retirement. This has the benefits of reducing risk and costs for adviser firms – and providing the definitive, repeatable processes that the regulator expects to see.

Centralisation is particularly important when it comes to giving retirement advice. In the past, many clients would have bought an annuity, but these days, the majority will stay invested – which means that adviser businesses have the challenge of more and more clients coming back each year. It’s a great opportunity but firms have to be ready – so it’s more important than ever for the advice that they give to be both efficient and scalable.

With retirement advice, segmentation of the client base is vital too – because a service proposition should be appropriate to the client being served. The idea of ‘one size fits all’ is looking increasingly crude. If we start looking at people as individuals – and processes as centralised – it will benefit both adviser businesses and clients.

David Tiller is head of adviser propositions and strategy at Standard Life



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