AIFA unveils free platforms due-diligence guide

AIFA today launches a platforms guide to help members conduct “robust” due diligence on wraps and platforms.

The free 'Platforms and your business' document has been designed to help advisers take a "more informed approach" to the adoption of platforms and wraps.

Produced in partnership with Standard Life and drawn together by a practitioner steering group, the report provides step-by-step guidance on how to select the right provider for clients.

It will provide IFA firms with a "breakwater" to guard against future regulatory requirements, AIFA says.

Bath-based IFA Money Wise was today fined almost £20,000 by the FSA for compliance failings on investment advice given to 519 customers using platforms, in the first fine for platform advice.

"Recent announcements from the FSA are a clear wake-up call that firms must be able to robustly evidence the rationale for how and why they select platforms," outgoing AIFA director general Chris Cummings (pictured) says.

"By following the decision-making process and rationale set out in the guide, IFA firms will have a robust due diligence process."

Launch of the 38-page guide comes amid a climate of regulatory uncertainty surrounding the use of platforms. According to research from NMG, almost half (46%) of IFA firms cite a fear of future regulation as one of the main barriers to platform adoption.

Standard Life head of trading Mark Polson says: "In our conversations with advisers about platforms, we know just what a difficult decision-making process it can be.

"The use of platforms in our profession is still relatively new and has attracted regulatory scrutiny.

"The important issue is adopting a platform strategy that is right for clients, and being able to demonstrate that, as a business, business owners took a robust approach in making the decision."

The eight-person practitioner steering group included Polson, Nucleus Financial CEO David Ferguson, 2plan managing director Chris Davies.

The guide is available to AIFA members only.