They may also consider multi-asset funds, particularly where there is a tax consideration, as these tend to be more tax efficient than a model portfolio where the client will own the underlying holdings. The other option is to engage with a DFM to offer a bespoke service for clients.
However, Miller says this tends to be done at the higher net worth end, where again it is more efficient to run a client portfolio in that way.
In the past, the Financial Conduct Authority has said a firm with a diverse client bank may wish to consider offering a range of CIP solutions to meet the needs of their clients.
In its 26-page document Replacement Business and Centralised Investment Propositions, published in 2012, the regulator stated: “Where a firm has a diverse client bank, it may wish to consider segmenting its clients. This involves offering a range of CIP solutions to meet the needs and objectives of different client segments.
"This is in firms’ interests, as well as clients, as it is likely to increase the number of clients for whom a CIP solution is suitable."
Aamina Zafar is a freelance journalist
