17 Distributor responsibilities Products and services outcome • Obtain sufficient information from the manufacturer on the target market of the product / service to allow them to: – Understand the characteristics of the product or service – Understand the identified target market – Consider the needs, characteristics and objectives of any customers with characteristics of vulnerability. – Identify the intended distribution strategy – Ensure the product or service will be distributed in accordance with the needs, characteristics and objectives of the target market • Identify or create an appropriate distribution strategy which is consistent with the distribution strategy set by the manufacturer • Share information with manufacturers on customer outcomes (see further below under Information sharing) • Regularly review whether their distribution arrangements are appropriate and up to date and that products and services have been distributed to customers in the target market Clients with characteristics of vulnerability The distributor (adviser firm) is typically the entity with the closest relationship with the end client and is consequently in the best position to determine whether a product or service has particular features that render it appropriate, or inappropriate, for individual clients with characteristics of vulnerability. Price and value outcome • Obtain sufficient information from the manufacturer to understand the value assessment the manufacturer has undertaken • Ensure their own charges for distributing the product or service represent fair value • Consider the ‘total cost’ of the product or service Example: A discretionary manager is ‘manufacturing’ a discretionary Model Portfolio Service (MPS) which it distributes through third party adviser firms. In this scenario the discretionary manager is a manufacturer of the MPS, and a distributor of the funds included in the MPS. An adviser firm is recommending the discretionary manager’s MPS as part of its Centralised Investment Proposition (CIP). In this scenario, the adviser firm is a manufacturer of its CIP (which includes the discretionary manager’s MPS) and a distributor of the discretionary manager’s MPS.
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