No CIP makes PROD compliance even more tricky

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Nov 08, 2019

A blog by Abbie Knight from Discus caught my eye recently. In it she covers Central Investment Propositions (CIP), Central Retirement Propositions (CRP) and the latest regulation to challenge the advice sector, PROD.


She reports that a recent panel discussion asked the question ‘can you exist today, without a CIP?’ While the panel agreed that it was, of course, possible (with rigorous documentation), it does seem to me that advisers are far more open to exploring alternative routes that can help them reduce the burden of administration that can often get in the way of doing what they do best – providing advice to clients.

Running investments in-house is not for the faint hearted these days. While many advisers may feel this is a central part of their service, the costs of doing the job well can often be underestimated. As Abbie says in her blog:

“When you add up the headcount, subscriptions (e.g. Bloomberg terminals, third-party research services, reporting and other software costs), as well as the administration, cost of buying retail funds and running an Investment Committee, the process is often more expensive than outsourcing. So, while keeping say 40 bps in-house sounds attractive, it could be costing closer to 60 bps when all things are considered.”


With pension freedoms putting more emphasis on investments that will return income over a lifetime, I can understand the appeal of a specialist retirement investment proposition. However, there are no real benefits to end investors from the options currently available so we’re not at all convinced this is the way forward.


Abbie reports that research indicates that just 1% of advisers have implemented a PROD strategy. That means 99% are at serious risk of falling foul of the regulator. This is live regulation, not something that is due to come in sometime in the future. Segmentation and suitable portfolios for each segment are vital components – something a good CIP should be able to deliver.

At PortfolioMetrix we are busy developing ways to help our advisers ensure they are fully compliant. And compliance is key: speaking with experts we’ve learned that the regulator won’t hesitate in cracking down hard on any adviser who is caught not following the rules. You have been warned...

Our customised investment portfolios are not only exactly matched to every clients’ goal, but they are fully compliant too.


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PortfolioMetrix are a multi-award winning, innovative investment manager that provides independent financial advisers with an alternative way to access discretionary investment management for their clients. Our proposition comes at a competitive price and doesn’t compromise the adviser/client relationship. The London winner of the Citywire Wealth Manager Regional Stars award for two consecutive years, voted the WM Small Business of the year, in association with ARC 2018 and, in 2019, have received the accolade of PA Discretionary Manager of the Year. Our proposition offers the convenience of online model portfolios yet delivers customised portfolios, tailored to individual client requirements. Investment performance has demonstrated consistent and reliable risk and return separation of portfolios that doesn’t undermine the financial planning process. This is achieved through our academically-robust, risk-based investment approach. WealthExplorer™ is integral to the PortfolioMetrix customised service. A proprietary owned and designed software system, WealthExplorer™, is purpose built to equip advisers with a broad range of tools designed to deliver unique client insights that add value to the adviser/client relationship and ultimately delivers better client outcomes, when utilised by financial advisers.

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