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Where should platforms come in a CRP checklist?

This one may or may not come as a surprise.

There is no FCA requirement to have a formal Centralised Investment Proposition (CIP) or, if you run a separate process for retirement income, a Centralised Retirement Proposition (CRP).

However, there is a clear expectation that advisers can evidence both the recommendation and the thinking behind it during both accumulation and decumulation.

This evidence needs to consider the risks and conflicts that emerge during the two phases. It must be carried right through your process from the PROD segmentation, to investment strategy and platform due diligence.

These points were made in an excellent webinar by David (DAN) Norman, joint founder and CEO of TCF Investments, earlier this month.

As DAN pointed out, with the UK getting older (the ONS estimates that by 2066 one in four of the UK population will be aged 65 or over), this creates a huge planning task for advisers, particularly as the number of retirees with final salary pensions is shrinking.

DAN highlighted that the considerations for both investment strategies and platform due diligence will be different during decumulation, even if the fund solutions are the same.

He also outlined some key questions advisers should ask of platforms when building or developing a CRP:

  • How are you going to use a platform’s tax wrappers for income through retirement?
  • If you are planning to hold a cash buffer for clients, will that be on or off-platform?
  • If you have clients from different generations of the same family, which platforms offer a charge discount?

In other words, how will your preferred platform or platforms support your decumulation proposition?

He noted recent areas where some platforms had come up short:

  • Are they able to hold cash in all tax wrappers?
  • Do they offer a fully flexible disinvestment strategy?
  • And highly topical: does the platform’s model portfolio functionality continue to deliver income even if one fund in the model is suspended?

If it is a surprise to learn that advisers don’t have to operate a formal CRP, it won’t be to know platform due diligence takes on new significance for clients approaching retirement.

For more commentary, please visit our insights page


About the author

Alistair has over 35 years’ experience in financial services; the majority of which has been spent servicing the adviser community. As Head of Platform Strategy at Embark he spends a lot of time engaging with advisers, journalists and financial commentators talking about all things platforms; as well as engaging with Embark’s propositional and marketing teams, whilst continuing to represent the Business on a number of trade bodies.

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