Due_Diligence

WRAP & FUND PLATFORM DUE DILIGENCE PROCESS This Proforma may help when you start your selection and due diligence process. You may also find the FSA factsheet – ‘Platforms: using fund supermarkets and wraps’ a useful document to refer to and this is available on the FSA website or via this link: http://www.fsa.gov.uk/smallfirms/resources/factsheets/pdfs/factsheet_wraps.pdf |Review of Strategy | | | |This section should record the issues considered in reviewing the current business strategy. | | | |What is the current focus of the business' | |What is the current client profile' | |How is the business currently financed' | |How and why should this change' | |How would a wrap platform help with this change' | | | | | | | |Market Analysis | | | |Here you should document the review completed of all the propositions in the market. This should include consideration of the| |following: | | | |Product & fund range | |Pre-sale tools | |Online functionality | |Post sale reporting | |IFA support | | | | | | | | | |Short listing & Due Diligence | | | |A short list should be developed following the above market analysis and then more detailed discussions arranged with each of | |the providers. | | | |The same approach should be adopted with each provider so that comparison and the final decision-making process is easier. | |All this information should be documented to support the decisions made. | | | |Areas to cover would be: | | | |Financial Assessment – this could be covered by an assessment of the financial rating of the company, e.g. from S&P or AKG or | |you could request and study the latest Report & Accounts. The existence of any parent company should also be considered, | |together with any guarantees in place to back the subsidiary. | | | |Organisation & Structure - This section should determine that the overall management structure and resource is adequate to | |support the business. A copy of the current management structure should be obtained. You should also determine who has | |accountability for delivery of customer service and support. | | | | | |Adviser Support – you should ensure that an appropriate level of support is in place, both during the implementation phase and| |on an ongoing basis. Perhaps ask for references of local IFA firms of a similar size so that you can speak to them to ensure| |they are delivering what they say they will. | | | |IT/Operations & Customer Services – here you need to ensure that the resource is in place to support and develop the wrap. | |Consider asking for an overview of the IT & Operational support area. Also find out whether the IT outsourced or provided | |in-house and what back-up is in place / what is the business continuity plan' Are SLAs in place – what are they and what | |penalties are paid in the event they fail to be delivered' | | | | | |Decision | | | |Once all the information has been compiled, and the discussions with the shortlisted providers have been completed, you should| |be in a position to make your decision. Here you should document the factors on which the decision was based, and of course | |the final decision. | | | | | |Implementation | | | |Here you should document the implementation process, and any steps that need to be taken to complete the implementation. | | | | | |Review | | | |Finally you should set a review date for a formal review of the whole process. You should also agree and document the | |criteria by which you will measure the success of the wrap. | | | Due Diligence Proforma Version 3 – March 2010