A new product/service from Defaqto has been announced today, which will help advisers meet their regulatory needs as part of the FCA’s Consumer Duty regulation, which comes into force from 31 July 2023.
The Profiles are expected to appear in Defaqto’s adviser software after this date.
The Consumer Duty Profiles will enable advisers to compare products, funds, or DFM portfolios in a peer group on the same basis using the same data. Using the documents, advisers will be able to report on the target market of the product in question, and importantly, understand who is not the target market. The profiles will also make understanding whether a product offers fair value, or assessment of the value of a fund/DFM portfolio, much easier by providing a comparison of key benchmarks to the product or fund’s peer group.
Providers and asset managers are being encouraged to commission the new Consumer Duty Profiles on each of their products, so that advisers can deliver good outcomes to their clients, efficiently, within Defaqto’s adviser software.
Paul Tinkler, Head of Insight & Consulting (Investment & Protection) at Defaqto, said: “We’ve been listening to our adviser customers and have designed the new Consumer Duty Profiles to address their needs.
“Many advisers are receiving a variety of documents which are long and inconsistent from one provider to another. In some cases, they’re having to go back to the provider to ask for more information to help them understand how or why they have come to certain conclusions.
“Another frustration is working with differing data, which makes it challenging to compare providers on a like for like basis. All of this means that advisers are spending precious time trying to read and compare the various documents as part of their Consumer Duty responsibilities.
“Our aim is to provide advisers with a suite of profiles that make it possible to apply a consistent value assessment of products, funds and DFM portfolios across multiple providers or asset managers. We are uniquely positioned in the market to support both providers and advisers in meeting the demands of Consumer Duty and helping their clients to make smarter financial decisions.
“We would recommend providers and asset managers commission profiles on their products to ensure advisers are not excluding them in their due diligence; target market and fair value or value assessments. We’re also open to hearing from providers, asset managers and advisers with feedback on the documents and how we can develop them to continue to improve the support we offer our customers.”
The new suite of Consumer Duty profiles from Defaqto includes documents for funds, DFM portfolios, single Personal Pension, Platform/Self-Select Investment ISA, advised platform, drawdown for all SIPPs or PPP that facilitate drawdown, as well as SIPPs covering collective investment, DFM, property and equity investment. The documents are concise and easy to read in a format that works for both advisers and their clients and can be downloaded with a recommendation report and included within an adviser’s client file.
While you’re here…
Check out our IFA Talk Podcast episode with Defaqto CEO, John Milliken, which went live in early July and is full of useful ideas for advisers.
