Practical investment governance and intermediary due diligence

Begin with your firm’s role and permission

An adviser, platform, investment manager and pension operator do not have identical obligations. Define the service being provided, the relevant permissions and limitations, product and client type, and the allocation of responsibility. An internal approved-assets list cannot expand a regulatory permission. The presence of a fund or firm on a public register does not by itself answer every permitted-business, suitability, custody or due-diligence question.

Use the operative permission and the applicable rules, not a generic compliance checklist. Record the exact entity, instrument, share class or identifier, jurisdiction and relevant holding or transaction date. Where legal status or an exception is uncertain, obtain competent advice and preserve contrary evidence. Distinguish a proposal or consultation from a rule already in force.

Review the intermediary that actually uses the service

Confirm the legal entity, regulatory status, relevant permissions, ownership and control. Map related companies and duplicate account references explicitly. Check the people authorised to act, the activities they perform, agreements, insurance where relevant and platform access. A group document may help explain the structure but should not silently stand in for a different legal entity’s evidence.

Verify regulatory information through the appropriate official register and retain the date and scope of the check. For overseas firms, understand what local registration authorises and what activity is performed in or into the UK; foreign registration is not a substitute for that assessment. Keep account holders, directors, owners and authorised users distinct so evidence for one person is not automatically attributed to another.

1. Identify the exact entity, asset and service.
2. Check permissions, limitations and relevant official records.
3. Assess relationship, product, custody and conflict risks.
4. Record the approval basis and trigger-based review arrangements.

Test the investment decision, not just the document bundle

A proportionate investment review considers the nature of the asset, issuer and structure, the risks relevant to the firm’s role, custody, valuation, liquidity and any limitations. Record who decided, which information was relied on and why. Escalate unresolved inconsistencies rather than treating a signed checklist as conclusive.

The FCA’s historic SIPP guidance and review findings are useful sector-specific examples of due-diligence expectations. They must not be copied as a universal checklist for every regulated business. The FCA consulted on further SIPP changes in CP26/20; proposals are not presented here as final rules. Confirm current requirements and commencement dates before relying on a later policy change.

Keep oversight connected to real activity

Use management information to identify concentrations, unusual introductions, declined assets, related-party links and exceptions. Review whether the intermediary’s actual activity matches the agreement and approved access. Ownership changes, regulatory action, new products or a screening alert may trigger a review before a scheduled review date.

Where a concern is found, distinguish the current relationship decision, review of affected client holdings and corrective work on the process. A current screening report does not prove a historic approval was supported; a historic gap does not automatically mean the current relationship is unacceptable. MEMA can review the evidence and operational controls, while investment advice, legal opinions and any statutory skilled-person appointment require their own appropriate scope and competence.