We believe suitable outcomes for clients are achieved when three elements of financial planning are captured and considered by the adviser; 1) Fact-Find and general objectives, 2) AtR & CfL and 3) Investment Preferences & Objectives.
The ESG Accord full spectrum of capital Investment Preferences & Objectives compliance framework process is for all clients and all funds. The simple user friendly framework slots into your firm’s existing processes to enable suitable outcomes (COBS, PROD & Consumer Duty) across the full spectrum of capital. Crucially, most clients will not need to complete ESG or Sustainable preference questionnaires; the process allows the client to make an informed choice about their investment pathway and the client can choose to leave the fund’s investment strategy, themes & goals to the discretion of the Fund Manager(s).
The compliance framework includes:
* Advice Journey: Adviser facing doc, a simple run through of the framework and advice journey
* Informed Choice: Suitable Outcomes. Client facing educational document. This explains the process for investment preferences & objectives and how to achieve suitable outcomes. It breaks down the investment preferences & objectives across the spectrum of capital in bitesize paragraphs, it includes a short explainer section and, at the end, a client signature and comments section to record client understanding
* Triage Process: This document provides a record of your clients’ investment preferences and objectives and agreed adviser outcome
* Preference Questionnaires: Short preference questionnaires for Improvers, Focus, Impact and Ethical. IMPORTANT: most clients will not need to complete these questionnaires. The Triage process allows the client to make an informed choice about their investment pathway and the client can choose to leave the fund’s investment strategy, themes & goals to the discretion of the Fund Manager(s)
* Due Diligence Questionnaire: The purpose of this DDQ is to gather information on what investments are offered and how each Fund Group’s process works. This will enable you to deliver best outcomes for your clients. Databases using our DDQ for MPS and Tax Efficient Vehicles are available on a free to access basis
* Terms of Business update: Adviser facing document, explains why a ToB should include investment preferences and objectives with some sample wording for you to use
Additional documents:
* Fund Mapping: This new document will map existing fund strategies and names across to likely equivalent SDR/Fund Labels
* Mortgages & Equity Release Triage Process
“the new Sustainable Finance rules could be as big as RDR”
Lee Coates OBE
We’ve written a helpful guide for advisers to demonstrate how the Consumer Duty requirement to understand client Investment Preferences and Objectives fits into the advice process: