26 Structure of arrangements - Reliance on others Client agreements It is crucial that each of the parties – DIM, adviser firm and Investor – understands how the arrangements operate and their respective responsibilities. The basis on which each of the parties is acting must be set out clearly. Generally, this will be set out via a series of agreements as outlined below. Agreement between DIM and adviser firm (Intermediary agreement) The agreement between the DIM and adviser firm should confirm clearly the capacity in which each party is acting. It should also cover the following key areas: • Roles and responsibilities Who is providing the advice (adviser) and who is providing the investment management service (DIM) • Suitability Who is responsible for ensuring the advice to invest in the discretionary management solution and/or the mandate set is suitable (adviser) and who is responsible for ensuring the suitability of decisions to trade for the investment mandate set (DIM) • Vulnerable clients Responsibility for assessing any characteristics of vulnerability • Reporting Who is responsible for ensuring investors are provided with periodic reports and other required information • Relying on KYC information The extent to which the DIM is relying on the KYC information provided by the adviser and/or on the adviser’s original suitability assessment establishing the client’s investment mandate. • Communications from DIMs How the DIM will communicate with the underlying investor taking into account the tripartite nature of the arrangements • Value assessments How and when DIMs will produce value assessments and provide them for advisers to take into account in determining the value of their own services Chapter three - Structure of arrangements - Reliance on others
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