DD|hub has launched a due diligence data service for SIPPs, to help advice firms in their research and reviews.
Currently included are SIPP services from AJ Bell, Barnett Waddingham, Dentons, IPM, Westerby and YorSIPP. The due diligence service says other services will be added shortly.
Chris Jones, director of DD|hub pointed out that due diligence is a key area of focus for the FCA, which has told advisers that suitability requires assessment and understanding of both investments and providers. In particular firms should: “assess…the provider to establish whether they believe it appropriate to entrust the provider with client assets” (TR16/1, Assessing Suitability – Research and due diligence of products and services)
This assessment, he added, “lies at the heart of the foreseeable harm rules in Consumer Duty as advisers consider what risks might arise from recommending a particular provider to a client. With multiple Dear CEO letters expressing concerns about inadequate due diligence alongside well-publicised issues with some SIPP providers, it’s clear that advisers need to take due diligence seriously.
“That’s why we launched DD|hub back in 2019, to give advisers easy access to the information they need.”
He said: “Doing the detailed due diligence the FCA expect does take time and effort, but DD|hub streamlines the process by pulling all the information together online for you, in a consistent, easy-to-compare format, with tools to help advisers review and assess it, and comprehensive reports to document their process. More than 2,000 firms now use DD|hub for investment and platform due diligence and we’re delighted to add SIPPs to the service.”
Key areas the service helps address when considering a SIPP operator, include:
• Financial resources
• Client asset security – both client money and custody of assets
• Governance structure and controls, including risk management
• Their due diligence processes when considering investments or appointing a key supplier
• Information security, cyber crime and data protection
• Consumer duty – delivering the outcomes and value assessment
Advisers can also ‘follow’ providers to get automated updates when things change, which will help them meet their PROD and consumer duty monitoring requirements.
The DD|hub service is free to advisers and paraplanners.
