The use of CRPs as a way of introducing a consistent process within firms is rising but flexibility remains key, according to our latest research for M&G Wealth’s Centralised Retirement Proposition report.

Over 200 advisers were surveyed for the report, with in-depth interviews with eight selected firms and the findings highlighted how useful firms, particularly larger ones, find adopting a CRP for delivering consistent outcomes for clients.

Advisers who work alone don’t have the issue of consistency of approach but it’s a different story when they are part of a larger firm. This could explain why only two in five (39%) sole traders have a CRP in place, compared to three in five (59%) in firms with multiple advisers.

Adoption of CRPs

Increased flexibility

While consistency is important, the report highlights that firms with CRPs in place are not letting the tail wag the dog – advisers are still being given the option to go outside the framework where needed.

Advisers told us one common reason to work outside the CRP is to meet specific ESG investing requirements. Flexibility is important in respecting the knowledge and professionalism of advisers and the strong relationship they have with clients so CRPs are used more as a set of guidelines than a mandatory set of rules.

From what we learned in compiling the report, I think there are two key factors driving the rise in the adoption of CRPs at this time:

1. The pandemic stalled adoption of new processes as firms focussed on shifting working practices and technology adoption to support remote working.
2. We know that larger firms are more likely to adopt a CRP and we have seen a steady shift in the make-up of financial advice businesses as large firms buy smaller ones.

In my opinion, the trend for CRPs is likely to continue to keep rising in the coming years.

Centralised Retirement Propositions: a report on the evolution of retirement advice, the economic impact of global issues and the role for CRPs from M&G Wealth is available to download free here.