9 Relationships between advisers and DIMs It is important to note that the proposition being provided by the DIM can affect how the arrangements are structured. For example: a bespoke discretionary management service provided to sophisticated, high net worth investors will typically be structured on the reliance on others basis; whereas an MPS solution provided via a third-party platform will generally be structured on the agent as client basis. What is crucial is that advisers understand the solution they are recommending, how the arrangements are structured and the impact this has for them and their clients. Advisers perform a central role in setting up these arrangements and have clear obligations to their clients. They need to ensure that the arrangements are clearly understood, documented and articulated to their clients. The Consumer Duty does not change the essence of how arrangements between adviser firms and discretionary managers are structured. However, firms acting under the ‘agent as client’ rules must consider if there are retail customers at the end of the distribution chain and if they can determine or materially influence outcomes for them. Where this is the case, firms must comply with the Duty. For example, when developing a target market, ensuring products or services are designed to meet their needs and objectives, or assessing value for a product or service, a firm needs to consider the end retail customers in the distribution chain, even if it does not have a direct customer relationship with them. This means that discretionary managers acting on the agent as client basis will need to take into account that the end users of their proposition are retail clients.* Each party to the arrangement must ensure they understand each other’s roles and responsibilities so that both parties meet their own and their collective Consumer Duty obligations. *FG22/5 Final non-Handbook Guidance for firms on the Consumer Duty (Para 2.18) Chapter one - Relationships between advisers and DIMs
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