42% of platform users outsource the investment process

Defaqto's paper on The role of outsourcing post-RDR, published today, points out that whether to cut costs, improve efficiency or simply as an acceptance that client outcomes will be improved in the hands of specialists, it seems that the outsourcing trend is set to continue as adviser businesses prepare themselves for RDR implementation.

The paper highlights the three main outsourcing avenues that advisers may need to consider in the lead up to 2013:

- The investment process - this covers three areas of potential outsourcing, including the process itself (perhaps through a multi-manager or discretionary firm), outsourcing of administration through a platform or similar technology, and employing research specialists to produce product and service panels

- Use of back office systems - which are designed to record client details from fact finds, their activity and review details

- Outsourcing client fact finds, risk profiling and investigative work to a paraplanning business

Fraser Donaldson, Defaqto's Insight Analyst for Funds, said:

"Time is well and truly ticking for advisers to adapt to the wide-ranging changes being brought about by the RDR.  In particular, the service provided to clients by advisers will be brought into sharp focus meaning that, more than ever, they will need to justify the service they provide for the remuneration they receive.

"For many advisers, outsourcing part or all of their operations will be high up the agenda to support their advisory proposition from 2013.  There are a number of outsourcing routes open to advisers, from investment-related outsourcing to engaging with paraplanning businesses. As ever, the importance of robust due diligence cannot be overstated to ensure that advisers select appropriate partners in order to take advantage of the benefits of outsourcing."    

The paper is available to download from the RDR Zone on Defaqto's website, which provides unbiased analysis, commentary and insight to support advisers as they prepare for 2013 and beyond.

Defaqto's adviser research tool - Engage - provides whole of market financial product and fund information to support advisers' product research and selection; Engage also helps advisers with platform selection and due diligence, and generates reports for compliance and regulatory purposes.

Defaqto also provides bespoke consultancy services for advisers to support Platform and DFM due diligence processes and partner selection.