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New fund management due diligence service launched

11 February 2019

A new discretionary fund management due diligence service has been launched to help adviser firms cut down the time they spend on researching investment services. 

The DD|hub, which is free to use, provides adviser firms with instant online access to due diligence responses from DFMs, cutting out the delays and inefficiencies of traditional questionnaires. It also allows advisers to create their own question sets and manage and record their due diligence process to create a compliance record.

Set up by David Lee, founder of Defaqto and Chris Jones (pictured), former strategic partnerships director at Suffolk Life, the new service has launched with 18 DFMs and close to 100 advisers. Lee said they were “very pleased with the positive reaction” the service received during its pilot stage.

He said: “DD|hub has been built to help advisers keep on the right side of the regulatory fence. The system provides a framework in which the adviser can select the questions that are most appropriate to their clients, manage the due diligence and selection process, store their work and monitor selected discretionary managers for any changes.”

Jones commented: “Several major IFA support companies are very keen for their clients to use DD|hub as they recognise the multiple benefits it provides. We expect the number of firms using the system, both IFA and discretionary managers, to grow very quickly over the next months.”

The duo said the launch of the service follows Rory Percival’s views on ‘appropriate’ due diligence: “Research and due diligence has long been an area of concern for the FCA. Along with risk profiling and consideration of costs, it has been one of the key drivers of unsuitable advice when not undertaken appropriately. The new PROD Handbook also places emphasis on research and due diligence, requiring firms to consider their client bank and select products and services geared for their clients.”

Alistair Whitehead, chief executive of chartered financial planner Ergowealth said the need for firms to regularly re-evaluate and re-validate their CIP and platform choices to demonstrate ongoing suitability is essential in the rolling programme of due diligence.

“It can be an onerous and time-consuming process. But this is where DD|hub comes into play by providing a technological solution. With online access to constantly refreshed library of key RFI data maintained by investment managers together with a range of easy-to-use online tools to help advisers tailor their research with reports and comparative analysis,” he added.

Professional Paraplanner