18 Structure of arrangements - Agent as client Implications for adviser firms For the agent as client scenario to work, the underlying investor needs to provide their specific authority and informed consent to the adviser firm: • Becoming the client of the DIM, and • Acting as the investor’s agent For the investor to provide informed consent to the arrangements, the adviser firm needs to explain clearly to the investor how the arrangements operate and any regulatory implications for the investor. The adviser firm needs to make clear to the client the scope of the agency arrangement (i.e. it relates to the adviser appointing a DIM and facilitating the provision of the DIM’s service to the investor). See over page under ‘Client Agreements’. It is important the adviser firm understands their obligations before recommending that arrangements are structured on the agent as client basis. This should include seeking third party or legal advice on their client agreements, where appropriate. Implications for DIMs While the onus is on the adviser firm to ensure they obtain the authority and informed consent of their clients to structure the arrangements on the agent as client basis, it is good business practice for DIMs (as the provider of the investment solution) to make sure advisers understand what the arrangements mean for them and their clients, rather than relying on standard wording in terms and conditions. This would include reminding adviser firms that they need the express consent of their clients to act on this basis. Chapter two - Structure of arrangements - Agent as client
RkJQdWJsaXNoZXIy NjM2Njg1