Scott Campbell recently wrote an article for the SA based MoneyMarketing publication on the outsourcing business model.
In the ever changing world of retail investment advice, the standard business models across our industry – and an ever growing number of jurisdictions around the world – continue to evolve, with many financial service providers forming partnerships that offer a better service overall. This is due, to the oft-referenced Retail Distribution Review (RDR) – an ongoing improvement process that is already in force in the UK and Australia. As organisations have had an opportunity to get a better idea of how this would impact their business, many are seeing this as a positive opportunity for independent financial advisers (IFAs) and trustees to join forces with discretionary investment managers in a real partnership, offering an even better service that ultimately benefits the end-client.
Whether it is as a result of changes or anticipated changes in regulation, or simply because IFAs and their clients see the benefits of adopting an outsourced business model as best practice, it is a trend that continues to gain momentum. It is important to appreciate that this kind of partnership is not a threat to either independent business, as it creates a much stronger and more robust business model. MitonOptimal has already formed a number of strategic partnerships with IFAs and trustees across our global network. In the UK, now considered a reasonably mature RDR market, a large and growing number of IFAs are opting to outsource their investment propositions to a discretionary investment manager, allowing the IFA to focus on financial planning, tax and estate planning and retirement calculations, as well as that all-important client relationship. This outsourcing is not, however, an abdication of their responsibility… READ ENTIRE ARTICLE >>
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