View more on these topics

Working group issues recommendations on fund groups’ outsourcing

The Outsourcing Working Group has published a series of measures on how asset managers should carry out their arrangements with outsourcing providers.
 
The OWG consists of over 30 individuals from 24 organisations including the Investment Management Association, asset managers, outsourcing service providers and support from the big four accountancy firms.
 
Risks associated with the outsourcing of operational activities to external providers were first highlighted in the FSA’s ’Dear CEO letter’ to asset managers issued last year.
 
The recommendations by the OWG set out improvements for how firms oversee and protect ongoing outsourcing arrangements and when transitioning from one outsourcing provider to another.
 
The OWG suggests asset managers should carry out a risk-based assessment of outsourcing arrangements so as to understand the impact on the firm and the end client.
 
Asset managers should aim to have “appropriate in-house knowledge and expertise” of outsourced functions, with accountability for outsourcing operations also in place.
 
A comprehensive exit plan is also recommended by the OWG for if and when a firm switches between different outsource providers, to be monitored by the firm’s governance framework and reviewed periodically.
 
A standardisation of the terminology, documentation and testing processes would also help to smooth the transition between external providers, it adds.
 
Chase De Vere head of communications Patrick Connolly says: “Getting the right outsourcing arrangements in place is hugely important both from a day-to-day perspective but also from a reputational perspective if anything goes wrong as well.”

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com