Defaqto & Dynamic Planner

Evening.

We currently use Defaqto for research and risk profiling. We then use Adviser Asset for cash flow modelling. The cash flow tool on Dynamic planner looks good as do the other elements they offer. However we have used Defaqto for a number of years and i feel nervous about moving to a new risk provider as would we then need to agree risk with all of the clients again etc or is there a way of mapping them across?

Has anyone got any experiences of this?

Comments

  • SA96SA96 Member
    edited March 9

    Why would you need to risk profile all of your existing clients again? The risk assessment would have been carried out at the time of the recommendation. It's not like Defaqto's risk system was broken, the recommendations are still fit for purpose.

    Not a compliance expert but seems daft doing a new risk questionnaire for all of your existing clients.

  • richallumrichallum Administrator

    Hi @seanhurst Good question. The DP tool is very good, we did a review on it with some tips (it's here if you want to read it).

    You've already done a risk profile on them using Defaqto and based suitability on this. That's all ok. I have a different opinion to @SA96 as, under MiFID2 you have to carry out an annual assessment of suitability and that includes updating risk profile. Some of the advisers we work with do this every year, others every 3 years but you must consider it at least every year. This could be a good opportunity to introduce the new DP tool to clients as a way of improving how you do things for the benefit of the client.

    We've done this with several firms. I suggest that the most important task for you as part of your due diligence and internal process requirements on DP is to compare & map the outputs from both systems to see if there are any anomalies. EG, a client may have come out as 5/10 on Defaqto but 6/10 on DP without changing their views at all. Would that make your recommendation any different?

    Happy to share some of our experience helping firms with this if you like. Just email me [email protected]

    Paraplanner. F1, Apple, Nutella, ice cream. No trite motivational quotes. Turning a bit northern. Republican.

  • Anna03Anna03 Member

    I agree with @richallum as we had to do a similar exercise at a firm I previously worked for. We were carrying out/updating risk assessments for clients every 2/3 years anyway so once we had changed the risk profile system we were using, we'd issue the new risk questionnaire when the client came around to needing theirs updating (and any new clients would go on the new system).

    Also agree with needing to check how the two systems outputs differ - this bit can be a bit of a pain but short term pain for long term gain!

  • @Anna03 can i ask which system you moved from and to?

  • Anna03Anna03 Member

    @seanhurst it was from Dynamic Planner to FE Analytics

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