Most entrepreneurs claim that the key to success is to work smarter, not harder. Something that is currently enabling more IFAs to work smarter is a centralised investment proposition.
So, what is this magical panacea? Ultimately, a CIP is a standardised investment approach that allows IFAs to offer a comprehensive and consistent investment solution to all their clients.
Instead of conducting whole-of-market investigations, advisers can instead focus on a range of providers and products within their chosen CIP.
This now forms a core part of most advice propositions because a CIP allows IFAs to deliver a consistent investment experience across their client base.
Darren Mead, director of risk at Progeny, says: “CIPs enable advisory firms to distribute suitable products for clients within given target markets, based on those clients’ typical needs and objectives.
"CIPs can help drive greater compliance of the consumer duty via consistent, robust and disciplined investment processes, which support delivering good client outcomes. Ultimately these outcomes help to demonstrate that firms are delivering fair value to their clients via their products, information and back office support.”
Interestingly, recent research by Invest Wealth & Investment found that 91 per cent of firms use at least one CIP, which is up from 88 per cent in 2021 and 87 per cent in 2020.
Ross Easton, head of platform propositions at Scottish Widows, says the rise in popularity of CIPs aligns with the growth of multi-asset investing and investment platforms.
This is important because using a CIP streamlines the investment decision-making process.
He says: “A standardised investment approach also reduces the business risk that can be associated with advisers recommending a diverse range of investments, which could result in different investment outcomes for clients.”
This rise in popularity is no surprise considering the many benefits of using a CIP, which includes providing consistency and transparency.
Barry Strathearn, chief compliance officer at One Four Nine Group, says: “A CIP can considerably enrich the client experience by providing consistency and transparency. Clients who are invested in model portfolio services such as One Four Nine Portfolio Management are invested in portfolios that match their risk tolerance, which are then managed efficiently for them.
"This provides consistency and improved monitoring as all clients receive a uniform service irrespective of where they are in the country and which financial planner provides the suitability recommendation.”
He adds that by standardising the investment process, a CIP can reduce the complexities of managing many bespoke portfolios, rebalancing and fund switching.
Strathearn says this allows "financial planners to focus on clients without being bogged down in research and administration. Ultimately this leads to a better client experience and business enlargement".
Having a CIP can free up an adviser's time so that they are able to use the working day to better cater to their clients' needs.
