2022 Adviser Research – Centralised Investment Propositions: An overheating engine?

  • Copia Capital
  • 2022 Adviser Research – Centralised Investment Propositions: An overheating engine?

Centralised Investment Propositions:
An overheating engine?

A new research report into how CIPs became a victim of their own success and what advisers can do about it

What’s this research about?

At Copia Capital, our goal is to help advice and planning firms become more successful, by de-risking their businesses and providing investment solutions that give the best possible client outcome. Increasingly these investment solutions are delivered as part of a Centralised Investment Proposition (CIP), which research shows are used by 88% of advice firms.

Given their importance to client outcomes, we wanted to better understand how CIPs work in a typical advice firm and to help advisers ensure their CIP is operating effectively, delivering the best possible outcomes for the firm and its clients.

To achieve this, we commissioned insight consultancy the lang cat to conduct in-depth research into how advisers are operating their CIPs. Among other issues, the lang cat talked to more than 100 advice firms about:

  • What drove them to build a CIP in the first place?
  • What benefits are they seeing?
  • Are firms running portfolios in-house, or outsourcingIf firms are outsourcing, what drives them towards this decision?
  • Is there a tipping point where a CIP is likely to become unworkable?
  • What are the key areas of overheating risk in the CIP ‘engine’?

Some of the key findings and conclusions:

  1. 97% of respondents think that CIPs are in danger of overheating and will soon reach a tipping point where they become unworkable.
  2. Operational difficulties have increased as CIPs have grown in size and complexity, particularly when it comes to the ongoing management of
    model portfolios.
  3. The time and complexity involved in CIP design, implementation, monitoring, maintenance and reporting are the key drivers of operational ‘overheating’ risk; the average firm spends 71 days per year on operating their CIP.
  4. The regulatory burdens of MIFID II have increased the pressure on CIP operation, and Consumer Duty is likely to make the situation worse.
  5. Outsourcing the operation of a CIP can make a significant difference but only if done right.

To read the full findings of our research, discover examples of good practice and learn top tips for improving the efficiency and cost-effectiveness of running your CIP, submit your details to download your copy.

    Copia Capital Management

    Hamilton House, 1 Temple Avenue, London, EC4Y 0HA

    Understanding the risks

    This information is intended for professional financial advisers only. Copia does not provide financial advice. This information is not intended as financial advice and should not be interpreted as such. Model investment portfolios may not be suitable for everyone. The value of funds can increase and decrease, past performance and historical data cannot guarantee future success. Investors may get back less than they originally invested.

    Copia Capital Management is a trading name of Novia Financial Plc. Novia Financial Plc is a limited company registered in England & Wales. Register Number: 06467886. Registered office: Cambridge House, Henry St, Bath, Somerset BA1 1JS. Novia Financial Plc is authorised and regulated by the Financial Conduct Authority. Register Number: 481600.

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