How have CIPs evolved?

One of the biggest improvements in functionality that has ensured their survival is that platforms now offer comprehensive analytics and performance-tracking tools. 

These help advisers evaluate the cost-effectiveness of funds and portfolios.

Scott Gallacher, chartered financial planner and director at Rowley Turton, says: “Platforms can assist in assessing the value of CIPs by offering comprehensive analytics and performance-tracking tools. These tools enable advisers to evaluate the cost-effectiveness and performance of various funds or portfolios, ensuring they provide value for money to clients. 

“Platforms provide detailed fund reports, including performance metrics, risk assessments, and fee analyses, essential for meeting the consumer duty requirement of demonstrating value. They also facilitate regular reviews.”

CIPs have also adapted to the surge of regulatory requirements placed upon advisers. In fact, the growing importance of data, insights and educational materials, which has arisen because of the consumer duty, means advisers now need to increasingly consider the inner workings of their CIPs. 

Andy Miller, lead investment director at Quilter, says: “Consumer duty has also had a profound impact. Advisers now need to consider much more the inner workings of their CIPs and whether or not they are truly working in the customer’s interest.

"The same discretionary portfolio can be run in a very different way from platform to platform, and thus the returns and outcomes on offer can be significantly different. 

“Understanding the trading engine behind your CIP is really important to ensure your client is getting the most optimal outcome.

For a CIP to function, from inception to review, we need to have accurate data that is then analysed and in tune with our investment philosophy.

Kusal Ariyawansa, Appleton Gerrard Private Wealth Management

"Furthermore, consumer duty has placed a large emphasis on customer understanding. This means producing materials and insights into not only what their portfolio has been doing, but how it is achieved and why it is being done.

"This is again likely to be a drag on an adviser’s time, so having a provider who can do all this for you is likely to help claim back resources that can be spent on important client-facing and prospecting work.”

Platforms have started to introduce a range of data integrations to adviser back-office systems to provide seamless and accurate valuations without the need to rekey data. 

There have also been many advances in portfolio management tools for automatic rebalancing, capital gains tax reporting, and real-time pricing.

Kusal Ariyawansa, chartered wealth manager at Appleton Gerrard Private Wealth Management, says he has also used several third-party tools to provide a different set of eyes and explanations around how investments are progressing.