This is a case from the UK but it highlights the importance of the due-diligence process.
https://news.sky.com/story/police-i...ay-home-cash-in-10m-company-collapse-11492763
We recently wrote a blog about the need for advisers to periodically review their Investment proposition and consider what is in the best interests of their clients.
In the UK the FCA has published guidance for advisers and Irish advisers should take a look at this in order to better equip themselves with a process for systematically conducting research and due-diligence on service providers.
In summary the FCA said;
"We undertook this project as previous thematic work and instances of consumer harm have shown that the poor quality of an advisory firm’s research and due diligence is one of the three root causes for poor consumer outcomes. The other two root causes are [broken link removed] and costs, for example, in relation to replacement business (where a client switches an existing investment or sells it and invests the proceeds in a new product under the recommendation of an adviser).
TR16/1: Assessing suitability: Research and due diligence of products and services [PDF]
Our findings
In the main, we found that firms sought to achieve positive outcomes for their clients when undertaking research and due diligence, and generally firms demonstrated some good practice in this area.
However, many firms did not show consistently good practice across all products and services. The poor practice we identified varied from issues that are easily addressed to those that are more significant.
We were disappointed to identify issues relating to platform research and due diligence, particularly having previously published our expectations around this topic."
The lesson here is that advisers need a documented process that includes their Target Market Assessment, their selection and due diligence process for service providers and their ongoing monitoring and review process.
https://news.sky.com/story/police-i...ay-home-cash-in-10m-company-collapse-11492763
We recently wrote a blog about the need for advisers to periodically review their Investment proposition and consider what is in the best interests of their clients.
In the UK the FCA has published guidance for advisers and Irish advisers should take a look at this in order to better equip themselves with a process for systematically conducting research and due-diligence on service providers.
In summary the FCA said;
"We undertook this project as previous thematic work and instances of consumer harm have shown that the poor quality of an advisory firm’s research and due diligence is one of the three root causes for poor consumer outcomes. The other two root causes are [broken link removed] and costs, for example, in relation to replacement business (where a client switches an existing investment or sells it and invests the proceeds in a new product under the recommendation of an adviser).
TR16/1: Assessing suitability: Research and due diligence of products and services [PDF]
Our findings
In the main, we found that firms sought to achieve positive outcomes for their clients when undertaking research and due diligence, and generally firms demonstrated some good practice in this area.
However, many firms did not show consistently good practice across all products and services. The poor practice we identified varied from issues that are easily addressed to those that are more significant.
We were disappointed to identify issues relating to platform research and due diligence, particularly having previously published our expectations around this topic."
The lesson here is that advisers need a documented process that includes their Target Market Assessment, their selection and due diligence process for service providers and their ongoing monitoring and review process.
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