Diminimis, launched on 26 January, aims to assist UK advisers to understanding the implications of ‘outsourcing’ investment management to DIMs.
David Gurr, founding director of the firm, said that in the post-RDR regulatory environment advisers cannot afford to be unsure of their responsibilities.
He explained: “There is a legacy book that many advisers have been using for the last 15 or 20 years, and when these regulations were first put in place the demands for due diligence were not as onerous as they are today.
“In the market we have created jargon which can be very ambiguous. With ‘outsourcing’ there is a connotation that if you outsource to another party, that party has responsibility – that is not the case.
“Referal to a DIM is rarely outsourcing. Indeed, an adviser can only outsource if they have managing investment permissions,” he explained, adding, but if this is the case, responsibility remains with the adviser.
“Outsourcing in this instance therefore means precisely the opposite of what many in the industry think.”
“The adviser has a much wider responsibility when it comes to total suitability, and it is only the adviser that can meet that client suitability within their financial planning. It is imperative that he or she understands what risks they are exposed to and how to mitigate those risks, which is to the end investor’s benefit.”
“Diminimis works with the adviser firm to help articulate their requirements before identifying DIM services that are the closest fit for their firm and their clients,” he continued. “With a thorough understanding of the DIM market and propositions, we use careful analysis, taking into account the adviser’s criteria, the basis upon which they want to work with a DIM and the important intangibles that come with a service proposition delivered by people, as well as the hard facts and figures,” Gurr said.
