UK - Consultants have been warned that they must be prepared to take on increased liabilities if they launch their own investment products.
A senior consultant – who does not wish to be named – says firms will need to be capitalised and run to FSA standards.
But he believes this will be difficult for limited liability partnerships because they do not have the backing of large corporations to provide capital.
A rash of consultants have set up manager-of-manager operations.
But the consultant said: “Consultancy was always something for which it was very difficult to be held responsible for by the clients.
“It was something that you really didn’t need too much capital for.
“As a fund manager though, your liabilities are much greater as you are handling clients money, which consultants never do.
“So you are in line for money laundering procedures and the rest of it.”
Buck Consultants senior investment consultant John Walbaum said that firms could minimise risk if clients’ money went directly to the underlying fund managers.
But he believed this was unlikely to happen.
“Money will have to go through the consultant at some point, in which case, there is an element of liability there.”
The proposed cold-calling ban may be ineffective if a collaborative regulatory approach between the UK and the European Union (EU) is not maintained post-Brexit, the Pensions Management Institute (PMI) has warned.
Some 56% of defined contribution (DC) asset managers do not believe they will have transaction cost information in time for pension funds' March year-end statements, according to Lane Clark & Peacock (LCP) research.
NEST has appointed Clive Elphick, Martin Turner, Mutaz Qubbaj and Chris Hitchen as trustee members of its reshaped board.
Most people want to avoid investing in projects that contribute to climate change, and would consider moving to another less-exposed provider, according to a survey commissioned by ClientEarth.