Spotlight On… Due Diligence

Spotlight On… Due Diligence

We know that the term due diligence won’t be a new term for you. It may even be a subject of concern for you and your clients – ‘How do I know the right level of due diligence is being completed?’

The highly regulated industry that we all operate in means that due diligence is essential in order to operate effectively within the rules the FCA set out for SIPP providers.

In this Spotlight On, we look at what does due diligence actually mean in practice; what are the foundations that SIPP providers must have in place to avoid complacency or activity that could lead to regulatory failure, and the processes we have in place at Curtis Banks to protect clients and provide suitable outcomes for clients.

As a SIPP provider, what due diligence processes do we have to follow when looking at potential investments for a client?

We need to understand and monitor:

  • Nature of the investment
  • Whether the investment is genuine or not
  • Whether the investment assets are safe
  • Whether the investment can be independently valued
  • Whether the investment is impaired

We are also required to routinely share information with the regulator and demonstrate our controls and procedures. Investment due diligence is not in isolation however, we also consider who introduced the investment as well as who is managing investments for our clients (e.g. Discretionary Fund Manager). Sharing data is key and is why we have a wide range of Investment Partners who support and regularly report to us to meet our regulatory obligations.

Enhanced and robust due diligence for potential investments has always been an area of expertise for us.  In November, we outlined some of the wide range of investment options we are proud to offer your clients to meet their bespoke needs.

Read Spotlight On… Investment Options

The flexibility our SIPPs provide allows the freedom to invest in more bespoke and non-standard investments. That’s why due diligence is always one of our top priorities.

Are all due diligence processes for SIPP providers created equal?

We don’t believe so.  So what is Curtis Banks’ approach?

Dedication – We don’t outsource our due diligence. We have a dedicated and experienced in house Technical Investment Team who complete an enhanced review for each new potential investment for your clients.

Control – Completing our own due diligence, rather than a third party means we have control over the questions we ask and decisions we make. Our Schedule of Allowable Investments lays out our investment policy providing clarity, reducing ambiguity and allowing us to reach decisions as swiftly as possible.

Governance – We have a dedicated Investment Committee of experienced investment colleagues and senior management who monitor and oversee decisions made and ensure best implementation of the regulations.

Experience – With over 50 years extensive SIPP and SSAS experience, we’ve seen many others get it wrong. This knowledge and our ability to adapt controls allows us to apply this experience to ensure we react and adapt our decision making to help to help further protect your clients.

If you have any questions about the wide range of investment options available to your clients, including some of the more bespoke options we can offer, please get in touch with your local Curtis Banks Business Development Manager today.

 

Paul Keepin
Group Head of Investments, Curtis Banks

Paul has been working in SIPP and SSAS since 1995 and joined Curtis Banks in 2009.
Paul is chair of Investment Committee which oversees the design of our investment policies and procedures.

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