Grosvenor drops DIMS bid

Grosvenor Financial Services has done a u-turn and dropped its plans to apply for DIMS licence after saying it could be a leader in this space and running roadshows for advisers on its proposed DIMS solution.

Monday, December 22nd 2014, 6:00AM

by Susan Edmunds

Fund manager Grosvenor has opted not to apply for a DIMS licence under the new Financial Markets Conduct Act regime.

Head of investment David Beattie said it had become clear that the legislation was crafted for financial adviser groups and financial advisers and required the DIMS licensee to have significant involvement in ensuring client objectives matched the model portfolios proposed.

“That’s the role of the adviser. We don’t have advisers employed by us… it was becoming problematic. If we went down that route we would need to take greater responsibility for the actions of advisers… that was never part of our business model. It would see them having a relationship with us that was almost identical to that we have with our QFE advisers. That’s not the relationship we want to have with advisers who use our services.”

The DIMS requirements for related party custodial services meant Grosvenor would have had to set up a completely different reporting and governance structure, Beattie said.

Grosvenor is applying for a MIS licence.

Beattie said the fund manager would extend its non-superannuation product offering to include all the multisector fund options advisers had been using through their discretionary portfolios. “They will use the services in much the same way but will be using us in a way that defines us as product supplier not model portfolio providers.”

A number of adviser groups would use Grosvenor services but outsource some DIMS functions back to Grosvenor, Beattie said. That could include things such as asset allocation, stress testing, risk profiling and possibly managed fund research.

Advisers would need to have someone in their business who would be responsible for monitoring the outsourced suppliers, Beattie said.

“It makes our lives a bit clearer. It was going to be somewhat complicated with an overlap of adviser groups getting DIMS licences and our own.”

Beattie said the Ross Asset Management fraud had prompted the regulator to design the licence scheme to target adviser businesses rather than businesses like Grosvenor.

« Why should consumers use advice?IFA working on pro-bono offering »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

www.GoodReturns.co.nz

© Copyright 1997-2024 Tarawera Publishing Ltd. All Rights Reserved