Wealth manager Stanhope Capital will continue to offer non-mainstream pooled investments (NMPIs) to suitable clients, taking on the necessary compliance and analysis procedures. 

The firm hopes to differentiate itself from competitors that have stopped offering NMPIs due to increased regulatory scrutiny.

“In response to the AIFM directive many managers have decided that it is simpler to exclude NMPIs for all clients rather than establish the procedures to ensure that they are only bought for those clients where it is suitable,” said Jonathan Bell, chief investment officer at Stanhope.

New FCA rules came into place which severely restricted the types of client that NMPIs could be distributed to came into force on January 1 2014 . When these rules were joined by those of the AIFM directive in July, the regulatory landscape became further complicated.

“As a firm with a relatively small number of clients we have decided to undertake the necessary analysis and regulatory compliance to decide for each client whether each NMPI is suitable.”

“This is time consuming but something we think is beneficial to our clients. This means that we will exclude many retail clients from investing in NMPI’s whilst we may invest for others that fit the regulatory requirements.”

NMPIs include unregulated collective investment schemes, qualified investment schemes, certain SPVs which have similar attributes and traded life policy investments.

The NMPI rules implemented on January 1 were designed to protect investors who may not be able to understand the risks from products deemed unsuitable for them.

The restriction does not apply to the promotion of NMPIs to sophisticated or high net worth retail investors.