BR Guide FINAL 20 Feb

40 DUE DILIGENCE 41 Professional Indemnity Cover If advisers are extending their advice to include BR products, they will need to ensure that they have relevant and sufficient PI cover and this will mean that they do need to notify their current PI providers. Since these types of alternative investment are generally considered more risky than standard retail investments by the insurers, it could result in higher premiums or more difficulty in finding cover. 4.3 Support Tools Available Documentation, research, briefings and seminars, often CPD accredited, are regularly supplied by product providers who are keen to ensure that advisers are aware of the general concepts of the BR field. Advisers must obviously make their own objective product comparisons, but in terms of education and relationship building opportunities, provider support can be very useful. Independent materials are also available to provide education and to make researching the whole-of-market and analysing due diligence less daunting. These include MICAP, Tax Efficient Review and Tax Shelter Report which each offer independent research and reviews, with MICAP also providing an online platform for product comparisons and an audit trail of investment research. Intelligent Partnership’s free, CPD accredited Industry Reports, showcase events and E-learning content are other useful resources. 4.2 Hedging Some managers may use derivatives to hedge portfolios against market downturns, as is common with many mainstream funds. Of course, hedging is not foolproof and carries its own risks, such as counterparty credit risk or a mistake in implementing the strategy. Costs can also be significant, but are unlikely to be visible to end users. Case Studies Managers investing in assets with single digit project level returns with no gearing are less risky than those with double digit returns or using gearing. HENNY DOVLAND TIME INVESTMENTS