Documented CIP roles and responsibilities - who is the manufacturer?

The Duty has given further clarity as to the expectations of investments ‘Manufacturers’ and ‘Distributors’.

Without getting into compliance detail, many adviser firms are likely to want to avoid being inadvertently classified as being ‘Manufacturer’ of
the investment solutions they are using and / or recommending. This is because being a ‘Manufacturer’ involves additional responsibilities,
governance, and ongoing documentation (for example documenting aspects such as product testing). Advisers without discretionary permissions, adopting advisory models for their CIP, or (for example) blending multiple outsourced solutions for their clients could find themselves defined as being a ‘Manufacturer’. If advisers are outsourcing investments single solutions (e.g. MPS) to clients they should ask their MPS provider with documentation clearly outlining roles and responsibilities. For example, the MPS provider should be clear that they are entirely responsible for asset class and fund selection decisions taken within the models (amongst other aspects). This will demonstrate and document that the adviser’s role remains one of ‘Distributor’, alongside the MPS provider as ‘Manufacturer’.

Click here to read out full CIP checklist.