Understanding “Agent as Client” Arrangements in Discretionary Investment Management
When we recommend that you use a Discretionary Investment Management (DIM) Service, there may be situations where the firm providing that service requires us to enter into an agreement with them as your agent. This type of arrangement is known as an “Agent as Client” arrangement.
What this means
In an Agent as Client arrangement, we appoint the Discretionary Investment Manager on your behalf. As a result, the Investment Manager treats us—not you—as their client for regulatory purposes under the Financial Conduct Authority (FCA) rules.
You continue to be our client, and we continue to act in your best interests. However, you do not have a direct client relationship with the Discretionary Investment Manager.
Because we are an FCA-authorised firm, the Discretionary Investment Manager will typically categorise us as a professional client rather than a retail client. This categorisation changes the way some regulatory protections apply.
Key differences under this arrangement
As a Professional Client:
- We (not you) would not have access to the Financial Ombudsman Service (FOS) and may not be eligible for the Financial Services Compensation Scheme (FSCS). We continue to be authorised and regulated by the Financial Conduct Authority (FCA), and you retain your rights to refer any complaint about our advice or service to the Financial Ombudsman Service. You are also covered by the Financial Services Compensation Scheme in relation to the regulated activities we provide.
- The Investment Manager is required to provide less detailed communication to us than they would to a retail client.
- The FCA allows Investment Managers to assume that Professional Clients understand the risks and complexities of investments and services being entered into. This means the Investment Manager may use products or investment strategies suitable only for professional clients.
- There may be no cancellation rights on investments the Discretionary Investment Manager purchases within the portfolio.
Responsibilities – Who does what?
What this means for you
This change does not affect our duty to act in your best interests. You will continue to receive advice, guidance, and support from us just as before.
We will continue to:
- Recommend suitable Discretionary Investment Managers for your circumstances.
- Monitor their performance and ensure their services remain appropriate for you.
- Act as your main point of contact for all advice and ongoing service.
The only difference is that, under this structure, the Discretionary Investment Manager formally treats us as their client rather than you. This affects certain regulatory protections and complaint processes but does not change the level of care or service you receive from us.
If you have any questions, please do not hesitate to contact us.