{"id":5933,"date":"2024-09-11T08:45:47","date_gmt":"2024-09-11T08:45:47","guid":{"rendered":"https:\/\/www.wealthtime.com\/advisers\/?post_type=blog&p=5933"},"modified":"2024-11-19T11:46:22","modified_gmt":"2024-11-19T11:46:22","slug":"de-risking-your-investment-management-the-benefits-of-co-manufacturing","status":"publish","type":"blog","link":"https:\/\/www.wealthtime.com\/advisers\/blog\/de-risking-your-investment-management-the-benefits-of-co-manufacturing\/","title":{"rendered":"De-risking your investment management: the benefits of co-manufacturing"},"content":{"rendered":"\n

Tony Hicks, Head of Sales, Copia Capital<\/strong><\/p>\n\n\n\n

For professional advisers only<\/strong><\/p>\n\n\n\n

Investment success sits at the heart of financial planning to help clients meet their long-term objectives. However, the increasing regulatory burden created first by MIFID II and now with Consumer Duty has made managing investments in-house increasingly complex.<\/p>\n\n\n\n

Since the introduction of MiFID II, switching funds and rebalancing portfolios can create significant work for firms, especially for those operating under advisory permissions, with the need to obtain client permissions as well as meet the disclosure and suitability requirements. Consumer Duty\u2019s rules on avoiding foreseeable harms and ensuring all trades and activities are likely to represent fair value have raised the bar even higher, increasing time spent on admin. Our research earlier this year into Centralised Investment Propositions<\/a> found that on average firms are spending 81 days managing their CIP, up from 71 days in 2022.<\/p>\n\n\n\n

And of course, Consumer Duty isn\u2019t just a \u2018one-and-done\u2019 job, it requires ongoing compliance. Almost two-fifths (38%) of our respondents expected the regulatory burden to continue to grow over the next 12 months, while a third (33%) anticipated that ongoing risk management would increase. Effective outsourcing can make a significant difference to the admin burden and reduce business and operational risk. It is little wonder that 55% of firms are now outsourcing investment management, compared to 34% running models in-house \u2013 a reversal of our findings in 2022, when 51% were running their own models and 38% outsourcing.<\/p>\n\n\n\n

Distributors and manufacturers<\/strong><\/p>\n\n\n\n

However, Consumer Duty has also brought with it new terminology and rules around the roles of different participants within the financial services supply chain, which it refers to as distributors, manufacturers and co-manufacturers.<\/p>\n\n\n\n