The new Due Diligence Hub has been established to help advisers at a time of “heightened regulatory focus”, said creators AJ Bell.
The FCA’s Thematic Review TR 16/1 in 2016 “shone a spotlight on the quality of due diligence carried out by adviser firms on platforms”.
The new service has been set up following the industry reporting pre-tax losses of £19 million (based on financial year 2015 results), prompting concerns over the profitability and financial stability of some platforms.
AJ Bell stated: “The recent flurry of platform migrations and the challenges that often accompany the process have further highlighted the fact that robust due diligence is now absolutely imperative for advisers.”
The new hub features independent content and commentary from FinalytiQ, the lang cat, Platforum and Defaqto. There is also a link to download FinalytiQ’s Advised Platform Report, which includes data and analysis on the financial performance of 26 advised platforms.
AJ Bell has launched the service aimed at outlining the key areas advisers should focus on when selecting the right investment platform for their clients’ needs.
AJ Bell provides its own due diligence factsheet based around FCA guidance and the questions that the firm is most commonly asked by advisers.
Billy Mackay, marketing director at AJ Bell, said: “Platform due diligence has become something of a minefield over the past few years and unfortunately there is no single formula that can be used to navigate the process.
“Our teams regularly deal with due diligence-related enquiries and this has enabled us to identify the all-important areas that advisers most regularly seek information on.
“Alongside this we have collected the views of a range of well-known industry experts. By sharing all this information on our hub we aim to make it easy for firms to perform vigorous, smart due diligence and gain greater comfort that they are choosing the most suitable platforms for their clients.”
Mr Mackay said: “Industry estimates suggest that £200 billion of customer assets are due to be migrated to new technology in the near future. Having already gone through a re-platforming exercise ourselves, we know it is not easy, and there will inevitably be issues and challenges for any firm that switches to new technology.
“In light of this it is no surprise that more advisers are at least considering a due diligence review.
“Our hub has been set up to help them by providing a slightly tongue in cheek approach that offers a variety of views on what robust due diligence looks like.”