A Tenet Group Publication
Issue 9 Spring 2020
SPECIAL FEATURES Refer a firm and receive £300 Is your SM&CR implementation on track?
OTHER FEATURES New training for all your protection needs Explore the marketing toolkit to help drive business in 2020
A focus on the
regulatory landscape for 2020
The Latest Provider Support Offering insight into market conditions and adviser opportunities
A Tenet Group Publication
Issue 9 Spring 2020
SPECIAL FEATURES Refer a firm and receive £300 Is your SM&CR implementation on track?
OTHER FEATURES New training for all your protection needs Explore the marketing toolkit to help drive business in 2020
A focus on the
regulatory landscape for 2020
The Latest Provider Support Offering insight into market conditions and adviser opportunities
WELCOME – 3
CONTENTS… what’s in this issue
4 A focus on the regulatory landscape for 2020 Brexit is set to dominate UK market performance in 2020, so Ben Wright, Business Development Director, updates on the current thinking on this and provides a detailed roundup of all the other areas of focus coming down the track right now. 6 Is your SM&CR implementation on track? A look at what you should have already implemented and what’s still to come. 7 Refer a Firm scheme We’ve revamped our Recommend a Firm scheme, where you can receive £300 for each referral into TenetSelect. 12 New training for all your protection needs We want to make it simpler and easier for you to write or refer protection business, by giving you all the tools and support that you need, so a new suite of protection training modules have been developed as part of this increased focus. 10 Plan your calendar with our programme of events for 2020
Here is your Spring issue of selected Our regular industry update makes a comeback in this issue, with Ben Wright, Business Development Director, providing a full round up on all that is happening on the regulatory front. Brexit is set to dominate UK market performance again in 2020. However, a decisive victory for the Conservatives has fuelled optimism that the Government can finally ‘get Brexit done’ and end the uncertainty that has deterred investors. The update also covers DB Transfers, ethical investing, vulnerability and MiFID II – ongoing obligations. For the full update please see pages 4&5. Also in this edition As mentioned in the last issue, protection is set to feature heavily in 2020 as an area where more can be done to help you generate sales. The support in this area from Tenet is coming to life with new training available as part of this increased focus. See page 12. You may already be aware of the TenetSelect refer a firm scheme. We have now revamped the scheme so that you can earn a fee at proposal and sign up stage. You can earn £300 per referral so it’s worth having a look on page 7 for how to recommend a firm today. Technical Services and Research also contribute to this issue with an interesting article on the FCA consultation on platforms which aims to improve competition in this area. See page 8. Supplement enclosed with this issue With this edition we are including our supplement – ‘Protection Insight’. This protection focused publication provides an opportunity for providers and Tenet to help you focus on the protection market, understand customers’ protection needs and offer suitable solutions. Finally… In addition to our regular events article, we also promote the marketing toolkit, to ensure you are fully aware of all the development opportunities we can offer to you and your business. A testimonial from a happy customer highlights the benefit of this service. Take a look at page 14. I hope you find Selected informative and useful and as always let me know if you want me to include anything else in future issues. You can email me: firstname.lastname@example.org
14 Explore the marketing toolkit to help drive business in 2020
PROVIDER SUPPORT 15 - 32 Latest News and Products
Best wishes Katie Nutter Marketing Consultant
WINNER Best Network
Editor Katie Nutter
Published quarterly by Tenet Group Limited 5 Lister Hill, Horsforth, Leeds, LS18 5AZ
selected Magazine is for internal purposes only and is not intended as an advertisement. As a result this should not be issued in any form to clients. Not all the products in this feature are the responsibility of the Tenet Group Limited. Terms and Conditions. Although every effort has been made to ensure the accuracy of the information contained in this publication, The Tenet Group cannot accept responsibility for any errors it may contain. The Tenet Group cannot be held responsible for the loss or damage of any material, solicited or unsolicited. No reproduction of any part of this publication, in any form or by any means, without prior written consent from The Tenet Group. The views expressed in this publication do not necessarily reflect those of the advertisers or the publishers.
Tel 0113 239 0011 Fax 0113 239 5322
selected - a Tenet Group publication
4 – INDUSTRY UPDATE
A FOCUS ON THE REGULATORY LANDSCAPE FOR 2020
DB Transfers - preparing for the proposed contingent charging ban At the time of writing, we are still awaiting the publication of the FCA’s policy statement and final handbook text in this area, due at some point in this first quarter of 2020. If introduced, the ban on contingent charging for DB pension transfer advice means that advisers will be required to have the same method for calculating the fee, regardless of whether or not a transfer is recommended or arranged. If introduced as proposed, the new rules could then take effect very quickly, although there will be a transitional period where a contingent fee can be received. This is only where an ‘engagement letter’ agreeing to the charge was issued to the client before the rules came into force and the fee is incurred no more than three months after the rules applied. We would recommend therefore that firms who agree to provide advice on DB pension transfers on a contingent charging basis should ensure that they get their relevant fee agreements signed at the earliest opportunity. It’s also very important for firms to keep a record of enquiries they receive from both existing or prospective clients who are considering a DB pension transfer but are deterred from doing so at the triage stage. It’s sufficient to keep an anonymised record of the individual (e.g. title and surname, month and year of birth), the date of the enquiry and which triage resource/ service was provided/ recommended. This information may be required as evidence in the future to the FCA
With the increasing global spread of the Coronavirus, clients are thinking about the impact on their investments. At the time of going to print, our Technical Services and Research Team has produced a bulletin to support you in talking to clients, which can be found in the TS&R communications library within the extranet. Essentially our overall message is that clients with sufficient capacity, who are prepared to invest for the longer term, should not be concerned about short term fluctuations in investment values. Brexit is set to dominate UK market performance again in 2020. However, a decisive victory for the Conservatives has fuelled optimism that the Government can finally ‘get Brexit done’ and end the uncertainty that has deterred investors. Before the Coronavirus outbreak, some commentators were even predicting that the UK may be on track to experience the strongest economic growth in Europe this year. Our trade body PIMFA has outlined the importance for advisers of having a plan if they have overseas clients, so as not to leave them stranded. Our Technical Services and Research team will be monitoring developments in relation to the implications of Brexit on financial services, and further guidance will be issued once the impact of any negotiated trade deal is known. In the interim, our ‘Brexit Uncertainty’ guidance, issued in January 2019, remains a good reference point. Looking beyond Brexit, what are some of the key regulatory themes of 2020?
or PI insurers, that a significant proportion of enquiries in this area do not progress. On the PI front, some firms are finding that their PI policy at renewal excludes cover for DB transfer advice or has an excess of more than £5,000. When this happens, firms need to ensure they have in place at least the increased level of capital resources required by the FCA’s rules. Firms with a PI exclusion (or high excess level) also need to consider recent comments by the FCA about PI cover when deciding whether they wish to continue to offer DB transfer advice even where they conclude that they have appropriate levels of capital resources. In practice, there could be less than week’s notice than a week’s notice to make changes to disclosure documents and suitability report templates and introduce a process for checking the client’s understanding of the advice. Increased focus on ethical investing More and more funds are adopting ESG criteria, which stands for environmental, social and corporate governance. These are the three central factors in measuring the sustainability and ethical impact of a company’s investments. The FCA wants to improve transparency and disclosure in this area however and final rules are due before June this year, with the overarching aim of protecting consumers from so-called “greenwashing”. This is where funds and firms market products and investments to appear more sustainable and ethical than they really are.
INDUSTRY UPDATE – 5
Ben Wright Business Development Director
Proposals here include common classifications and labelling, but there will also be an increased onus on advisers following good practice in assessing ethical preferences. Ultimately however, the suitability of a product will trump any green wishes, which raises challenges for the industry to identify enough suitable investments to meet increased demand, without harming performance. Protecting vulnerable consumers is a key priority for the FCA and it’s important to note that there are many different drivers of vulnerability. Its Financial Lives Survey showed that 50% of UK adults display one or more characteristics of being potentially vulnerable. It’s true that some older people are vulnerable, but many are not. Equally, lots of younger people are vulnerable but sometimes only temporarily. The FCA definition of a vulnerable customer is as follows: “Someone who, due to their personal circumstances, is especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care” In the FCA’s Guidance for firms on the fair treatment of vulnerable customers GC19/03, the following were all noted as potential drivers of vulnerability: Vulnerability – it’s more than just a number
• Physical/mental/cognitive impairment – whether age-related or otherwise • Poor mental health • Severe or long-term illness • Life events such as job loss, bereavement, relationship breakdown • Low income and/or over-indebtedness • Caring responsibilities • Low levels of knowledge/confidence when dealing with finances – e.g.due to being very young or being older • Lack of English language skills The key is for the adviser to recognise when a person is potentially vulnerable and use empathy and their people skills to (a) identify whether the person actually is vulnerable and if so, take appropriate action to avoid the risk of the client making a bad decision due to a lack of understanding or not engaging with the issues. Appropriate action will vary, depending on circumstances, but could include encouraging them to include another capable adult in the process or sometimes, it may just mean allowing a bit more time. Whatever you decide is appropriate, make sure you keep a record of your rationale and the action taken. For more information, Just have produced a very useful and thought provoking online training tool in partnership with SOLLA, which gives structured CPD.
MiFID II – Ongoing Obligations
Since this came into effect 3rd January 2018, where agreed ongoing services include a suitability assessment, it must now be carried out at least annually, even if the original contract said it was to be provided less frequently. Where the agreed ongoing services do not include a suitability assessment, then MiFID II does not introduce a requirement to provide one. In terms of ex-post cost disclosure, where there is an ongoing relationship, then at least annually, you must report to the client the aggregate cost (in percentage and monetary terms) of the following: • Your firm’s services • The funds/securities • The platform • Transaction costs Most firms provide a breakdown (adviser firm, platform, underlying funds). An illustration must also be provided, showing the effect of all costs in the past year and the projected effect of future costs.
6 – SM&CR UPDATE
IS YOUR SM&CR IMPLEMENTATION ON TRACK? The Senior Managers and Certification Regime (SMCR) was introduced to increase individual accountability and responsibility throughout the sector. It replaced the existing “Approved Persons” regime and SMCR employees needed to be trained and abide by the new conduct rules from 9th December 2019, but firms have a further 12 months to train their other employees on the conduct rules (until 9th December 2020).
What should firms have completed by 9th December 2019? As a re-cap, by 9th December 2019, your firm should have completed the following: • Identified the senior managers in the firm. Usually: - SMF 3 (Exec Director), Poss SMF1 (Chief Exec) - SMF16 (Compliance Oversight) – Required - SMF17 (Money Laundering reporting) – Required • Allocated each of the applicable prescribed responsibilities to the relevant senior manager in a statement of responsibility and identified certification roles. e.g: advisers, support staff bringing about transactions online and managers of certification staff, if not a senior manager. • Provided Conduct Rules training to senior managers and certification staff • Have processes to: - give/request Regulatory References (SYSC 22) - comply with criminal record check (caution required re non-SMs and existing staff) - report to the FCA disciplinary action relating to Conduct Rule breaches - Within seven days for senior managers -Annually in the 31st Aug RMAR (REP008) - nil return required
What do firms need to do by 9th December 2020 deadline? By the 9th December 2020 deadline, Core firms need to then complete the following actions: • Provide conduct rules training to remaining staff (excluding ‘ancillary’ staff) • Provide initial certificates to certification staff • Have processes to comply with the annual fitness and propriety and certification requirements (eg. existing appraisal process?) Further SM&CR support available Get on track with your SM&CR implementation with our themed audit. If you need guidance, please visit the dedicated SM&CR area of the extranet or you can book an SM&CR audit with your Regulatory Consultant. Additional themed audit’s are available for you to purchase from our extensive list of additional services. Our SM&CR audit can provide you with peace of mind that your firm has implemented all the required actions of SM&CR to date, and ensure you’re ready to put the next steps in place before December 2020. To book your SM&CR audit contact your Account Manager or Regulatory Consultant.
8 – SPECIAL FOCUS
David Lloyd Technical Services and Research Team Leader
IN THE KNOW The FCA’s Platform Consultation
SPECIAL FOCUS – 9
The FCA has been concerned for a long time that competition in the investment platform market has been ‘limited by the barriers facing consumers when they try to switch platforms’. As a result, the FCA published its latest policy statement in December 2019 as part of their wider Investment Platforms Market Study (IPMS) package, containing the final rules aimed at improving competition between platforms. What is the issue? Transferring assets between platforms has long been identified as an area in need of improvement. With a multitude of platforms offering a range of charging structures, clients may be best served by moving their holdings to a better value service. However, clients are often recommended to liquidate their holdings to enable them to switch platforms, leading to unnecessary tax charges as well as the potential lost growth whilst the funds are out of the market. The complexity of in-specie transfers is often cited as a reason for this liquidation, especially where the client is invested in units that are specific to a particular investment platform. A unit class conversion can be performed during an in-specie transfer but the FCA found that some firms do not routinely provide the option of a conversion, preferring to require that the consumer sells the units and repurchases them via the new platform. As a result, the FCA will be introducing a package of rules from 31 July 2020 requiring platforms to: • offer consumers the choice to transfer units in investment funds common to both platforms via an in-specie transfer, • request a conversion of unit classes, where necessary, to enable an in-specie transfer, • where possible, ensure consumers moving onto a new platform are given an option to convert to discounted units. The FCA expect that their overall package of remedies will result in a prevalence of in- specie transfers for most client assets so it is therefore important to assess how this will impact your advice going forward. Giving consumers the option of an in-specie transfer The FCA initially proposed a requirement that platforms must offer all retail clients the option of an in-specie transfer of units for funds available on both the ceding and receiving platforms. However, there are existing FCA rules requiring fund managers to perform unit class re-registrations within a reasonable time on request from the client as well as the general obligations for firms to act professionally and with due skill, care and
Therefore, where there is an option requiring a decision from the client, the FCA have stated that they would expect the adviser to provide information to ensure that the appropriate unit class is selected. Additionally, they also expect the adviser to provide justification where a more expensive unit class is recommended. The FCA acknowledged that this represents a further administrative burden for everyone in the industry but, in keeping with the broad principles of Treating Customers Fairly, they considered that this is outweighed by the benefits for consumers. Conclusion As part of the ongoing reviews of the industry, it should come as no surprise that the requirement for platforms to support conversions has now been mandated by the FCA. In order to help clients navigate the myriad of discounted share classes now available, as well as ensuring healthy competition between platform providers, an efficient conversion process is sorely needed. When providing advice, consideration should always be given to in-specie transfers to access existing investment solutions at a lower ongoing cost to the client. These rule changes merely help to put a framework in place to assist advisers in this area. Whilst these actions from the FCA will not remove the complexity of multiple share classes not being available across various platforms, it does start pushing the industry towards solutions to streamline the process of in-specie transfers and should be welcomed. The Technical Services & Research team are always on hand to answer any questions you have about anything technical, so feel free to give us a call on 0113 239 0011, then press 2, then 2 again, or email email@example.com.
diligence. As such, the FCA did not consider further rules to be necessary at this time. The FCA did take the opportunity to remind all parties of the importance of in-specie transfers in the advice process and it is therefore important that this is considered as part of any platform switching recommendation. Unit Class Conversions The FCA feel that in-specie transfers, where possible, are normally the best option for the client. They did however note in the original consultation paper that some platforms currently choose not to offer an in-specie transfer where there is a mismatch of unit class between the ceding and receiving platforms. This often results in clients being required to disinvest their funds, potentially The FCA is adamant that the requirement to undertake a unit class conversion is not a valid reason to prevent an in-specie transfer where it has been requested. As such, platforms will now be required to offer the option of a unit class conversion, where necessary, and so avoid the need for disinvestment. Whilst the FCA has not stipulated a common method for implementing these requirements, they have hinted that they expect all participants in the transfer, including fund managers and their agents, to use ‘appropriate technology’ to undertake the process. What this technology consists of is yet to be seen and will form part of the FCA’s ongoing monitoring exercise of the industry. Converting to a discounted unit class on the receiving platform The final element of the FCA’s policy statement clarifies that, as part of the funds transfer process, receiving platforms should offer consumers the opportunity to convert units into a discounted unit class where possible. It was originally suggested that the default option would be for the platform to select the most advantageous unit class available to them but the FCA believed that this may not be appropriate in all circumstances. suffering a tax charge, rather than facilitating a unit class conversion.
10 – PROTECTION SPECIAL
NEW TRAINING for all your protection needs
Debbie Staveley Head of Advice Standards
PROTECTION SPECIAL – 11
To support advisers in building an additional income stream for their business, as well as managing the risks of not identifying and recommending to clients on their protection needs, we have a new suite of protection training modules. The courses are available for both trainee and experienced advisers. Most clients have multiple protection needs including IHT liabilities and the courses are geared towards identifying those needs and making the suitable recommendation.
Developing Protection Conversations – 1½ day course - £250+VAT
A one and a half day course aimed at trainee mortgage and protection advisers which focuses on building thorough product knowledge and provides the opportunity to practice and apply each stage of the advice process, to build competence and confidence.
Attendees will do this by understanding what client information and protection needs to identify at each stage, have the opportunity to practice the conversation, and complete protection advice scenarios demonstrating the understanding and application of suitable advice.
Experienced Protection – 1 day course - £150+VAT A one day protection course intended to support experienced advisers and build upon their existing protection knowledge and skills.
The course is intended for advisers to review their approach of getting to know their client. This will be undertaken by exploring case study scenarios, to identify the holistic information to fully protect the client’s needs and circumstances.
We will look at the different types of protection policies advisers may consider recommending, together with clear rationales as to why they are recommending them.
In summary, we have four new courses on protection available now. These will be held in Leeds, although we can accommodate on-site training where firms can host a session within their offices and there are six or more advisers attending. These can be from a single firm or a number of local, smaller firms joining together. Advisers will identify the different types of business ownership and review the client/business needs and views established in each stage of the sales process, in order to provide suitable advice in different areas, such as: • Business loans • Use of appropriate business trusts • Key person protection • Awareness of relevant life policies • Shareholder and partnership protection General Insurance – ½ day course - £100+VAT A half day course aimed at advisers who want the licence to write general insurance cases. Attendees will identify the approaches that people deploy when assessing situations, forming preferences and making decisions. The course also covers what client information needs to be established and evidenced to provide a tailored buildings and contents recommendation and apply Tenet standards through completion of client advice scenarios. Business Protection – ½ day course - £100+VAT A half day course that will give advisers the licence to write business protection cases. This is an interactive session that builds on prior knowledge of protection products and looks at the role of the adviser in the business protection advice process. This includes a thorough walkthrough and practice of the Tenet advised process for business protection.
Provision of the courses will be subject to demand, so please register your interest. Simply email us at firstname.lastname@example.org.
12 – EVENTS FOCUS
PLAN YOUR CALENDAR WITH OUR PROGRAMME OF EVENTS FOR 2020
2) BUSINESS FOCUS EVENTS (INVEST) These events will provide you with key updates on the market and the industry as a whole from a range of provider and fund manager partners. They give you the opportunity to network with your colleagues from local firms, discuss key relevant issues with Tenet and our provider and fund manager partners, and understand the challenges that other advisers are facing. This offers a lot more opportunity for interaction with other advisers. We find the sessions generate a lot of discussion, debate and the sharing of ideas. The additional benefit to these events is the social aspect of dinner in the evening, which is included complimentary on behalf of Tenet. Once the business element of the day has concluded, there is the opportunity to join us for a private dinner and overnight accommodation, followed by a Tenet Director hosted breakfast meeting the following morning. There are a limited number of spaces available, so they will be allocated on a ‘first come first served’ basis. Target Audience: Investment & Pension advisers Timings: 12.15pm for 12.45pm start – 5.00pm finish (plus option to stay for evening/overnight) CPD: 3hrs structured To book your place on a Business Focus Event visit: https://events.tenetgroup.co.uk/businessfocusevents2020 Date Location Venue 19/03/2020 North West Rookery Hall, Nantwich 30/04/2020 North Principal Hotel, York 11/06/2020 Scotland Norton House, Edinburgh
The programme for 2020 has been designed to incorporate your feedback from 2019 and the main events are now split into three strands; Invest, Protect and Lend. This enables you to focus your learning and development in specific business areas. Attending our events will provide you with an excellent insight into current markets, new legislation, new products and services. It is a chance to not only satisfy your CPD requirements, but also an opportunity to network with your colleagues, product providers and Tenet staff. All events are free of charge, so, don’t miss out - plan your calendar today. These events focus on investments and pensions. They will offer a variety of important information from a wide range of provider partners, Tenet’s Senior Management and Tenet Adviser Training. Target Audience: Investment & Pension advisers Approximate Timings: 9.00am arrival for 9.30am start – 4.05pm finish CPD: 4hrs 30minutes structured and 45minutes unstructured To book your place on Invest Round One visit: https://events.tenetgroup.co.uk/Investone2020 Date Location Venue 17/03/2020 Exeter Sandy Park Conference Centre 18/03/2020 Southampton Hilton at the Ageas Bowl (Stadium) 24/03/2020 Maidstone Hilton Maidstone 25/03/2020 London Amba Hotel 31/03/2020 Cumbernauld Doubletree by Hilton Glasgow Westerwood Hotel & Golf Resort 01/04/2020 Durham Ramside Hall Hotel & Golf Club 02/04/2020 Leeds Crowne Plaza Leeds 21/04/2020 Glamorgan The Vale 22/04/2020 Nottingham Doubletree by Hilton Nottingham Gateway 23/04/2020 Sheffield Tankersley Manor 28/04/2020 Belfast Stormont Hotel 1) INVEST – ROUND ONE Now running…but not too late to book a place
EVENTS FOCUS – 13
CPD WEBINARS Get your 30 minutes of CPD for each webinar you view! Starting in February, Tenet will be hosting a series of 10 CPD webinars which are available to view from the comfort of your home or office, at a time to suit you. So if you need to top up your CPD, take a look at the webinars that are available. All you need is a device to view it on and your headphones! WEBINARS AVAILABLE TO WATCH ON-DEMAND NO 1: Bank of Ireland- ‘Serving the complex customer’ Presented by Lauren Wiles, National Account Manager on 28th February 2020 What the webinar covers… The typical mortgage customer is changing. Lenders are seeing more and more cases of complex income, such as contractors, professionals and self-employed workers that may not work a standard 9-5 role. This webinar will take a look at the 2020 landscape and how lenders, especially Bank of Ireland UK, can help with this changing market. http://webinars.tenetgroup.co.uk/webinar-1-2020 WEBINARS COMING SOON... We recommend registering for all the webinars, then opt out as and when, if you are not available or the content is not relevant. Date Provider
3) COMING IN JUNE 2020 – SPECIALIST INVESTMENT WORKSHOPS These events will focus on specialist investments and the value they can add to your business. Tenet will utilise the expertise of providers and fund managers, to create a valuable event; giving key industry insights, technical guidance and sales support. The purpose of these events is to provide a higher level of education, through the use of case studies and planning scenarios to provide you with a greater understanding of each product and a proposition’s place in the market. Target Audience: Investment & Pension advisers Approximate Timings: 9.00am arrival 9.30am start – 3.00pm finish CPD: Approx. 3hrs structured
To book your place on a Specialist Workshops visit: https://events.tenetgroup.co.uk/workshop2020 Date Location Venue 02/06/2020 Cumbernauld The Westerwood 03/06/2020 Leeds Crowne Plaza 09/06/2020 Bristol Village Bristol 10/06/2020 London Amba Hotel
4) SPECIALIST INVESTMENT SEMINARS 2020
We are pleased to announce that we have added six additional investment events to this year’s Tenet Adviser Development Programme. These Specialist Investment Seminars will take place in July, visiting six locations across the UK. The events have an arrival time of 9.00am, with the first session commencing at 9.30am and concluding at 3.00pm. To book your place on a Specialist investment Seminar visit: http://events.tenetgroup.co.uk/seminar2020 Date Location Venue 07/07/2020 Nottingham Doubletree by Hilton Nottingham Gateway 08/07/2020 Leeds Oulton Hall 09/07/2020 Belfast Stormont Hotel 14/07/2020 Maidstone Hilton Maidstone 15/07/2020 London Amba Hotel 16/07/2020 Glamorgan The Vale
27/03/2020 Just 24/04/2020 LV= 29/05/2020 Precise Mortgages 26/06/2020 Zurich 31/07/2020 The Exeter
28/08/2020 TBC 25/09/2020 TBC 30/10/2020 TBC 27/11/2020 TBC
To register for any of these webinars visit: https://events.tenetgroup.co.uk/TenetCPDWebinars2020
14 – MARKETING SUPPORT
Explore the marketing toolkit to help drive business in 2020
If you’re looking to grow your business by recruiting new clients, or stay in regular contact with your existing clients, then a wide range of support is available. More and more advisers have recognised the benefit of using the marketing toolkit as the range of items is extensive and helps across a number of business areas. It includes leaflets, posters, brochures, press adverts, websites and letter templates to name just a few. Most of the support is available free of charge (you just pay for print) and a key benefit is that we streamline compliance processes by pre-approving most of the items for you. We can also add your logo and contact details for you if you wish. This means you can take the marketing support away and use it straight away. Support available • Brochure and folder templates • Posters, leaflets and press adverts across a wide range of themes/ product areas • ISA support items for the countdown to the tax year end and start of the new tax year • Introducer support • Letter templates • Protection, Mortgage and Equity Release Guides • Consumer leaflets for you to use with your clients to explain the support and backing you receive from Tenet.
My local postman very kindly did an initial drop for me of 500 in my local area. The response yielded over 20 direct enquires by email and telephone. Out of the enquiries I managed to write 5 pieces of business with those new customers recommending me to friends and family. I spent around £100 in getting them printed from Vista Print on thick glossy card. I earned at least £3,500 from my investment. Its 100% worth trying the marketing tool kit. For me as a small firm, it has proved to be the lifeblood for my business” Want to know more? If you want to take a closer look at Tenet’s Marketing Service, Websites or the Client Communication Package, simply visit the Extranet, click on ‘Grow Your Business’ in the top menu bar and you’ll see a link to the Marketing Toolkit. If you have any questions, give the Marketing team a call on 0113 239 0011. We also can help with client marketing provided by selected third parties 1) Websites We work with Web Pro IT to bring you a compliant website from as little as £30+VAT a month. Take a look at their services – simply visit: Investment firms - http://www.adviserprotenet.co.uk/ Mortgage & protection firms - http://www.mortgageprotenet.co.uk/ introduced a new package of support, as we recognise that keeping in touch with your clients is critical to maintain a relationship with them and to meet new advice needs. The package includes: • Monthly economic review bulletin • Monthly property market review bulletin • Quarterly client newsletters – ‘Money’, ‘Wealth’ and ‘Home Finance’ • Tax rate guide • Product and topic guides e.g. pensions • Budget and autumn update • Integrated email facility (small extra charge) • Free data audit to ensure your client data is accurate All items will be branded with your logo so that it looks like yours and will be pre-approved by our compliance team. PDF files are included so you can email them to your clients and/or add to your website and you also have the option of ordering printed copies at an additional charge. The cost for this communications package is only £650+VAT p.a. for an annual package, or you can pay a £150 set up fee and £65+VAT a month, on a rolling basis. This is a Tenet exclusive discounted offer. Visit: www.tenetmarketingstore.co.uk Call: 01279 657555 Email: email@example.com 2) A client communication package In addition to our own comprehensive toolkit, we have also
Advertising - It really does work! Recent feedback from a Tenet member really highlights that using the toolkit can add value and drive business for you. Jason Beacham of JB Mortgage Advice, a TenetLime member, recently requested a flyer relating to mortgage rates. “After spending hundreds on Google AD campaigns to drive traffic to my website I decided to try the marketing tool kit. I got the marketing department to personalise one of the flyers (TT107 – Worried about Mortgage Rates) and had 1000 printed.
PROVIDER SUPPORT – 15
Why impact and profitable growth can go hand in hand
Fund manager John William Olsen explains how investors can use the M&G Positive Impact Fund to help solve major social and environmental problems whilst aiming to outperform the global equity market.
Do you seek a dialogue with companies to influence their behaviour in terms of sustainability? We believe that through engagement with the portfolio companies, impact investors can bring a variety of changes, not only promoting responsible behaviour and long-term thinking, but also pushing them towards greater transparency or stronger sustainability goals. Even companies with a strong positive impact can improve. For example, a wind turbine manufacturer that has a clear environmental goal may have a relatively large CO2 footprint, or may need to improve workers’ rights or address safety concerns. Is there a compromise on performance when it comes to impact investing? On the contrary, we believe that companies that achieve a positive social impact as well as a return on equity have a strong tailwind. Especially companies whose products or services meet acute social or ecological needs are likely to show strong growth characteristics. Our fund therefore aims to outperform the broad global equity market over a five-year period. The value and income from the fund’s assets will go down as well as up. This will cause the value of your investment to fall as well as rise. There is no guarantee that the fund will achieve its objective and you may get back less than you originally invested. The fund holds a small number of investments, and therefore a fall in the value of a single investment may have a greater impact than if it held a larger number of investments. The views expressed in this document should not be taken as a recommendation, advice or forecast. The fund invests mainly in company shares and is therefore likely to experience larger price fluctuations than funds that invest in bonds and/or cash. The MSCI ACWI index is a target which the fund seeks to outperform. The index has been chosen as the fund’s benchmark as it best reflects the scope of the fund’s investment policy. The benchmark is used solely to measure the fund’s performance and does not constrain the fund’s portfolio construction. The fund is actively managed. The fund manager has complete freedom in choosing which investments to buy, hold and sell in the fund. The fund’s holdings may deviate significantly from the benchmark’s constituents.
John William Olsen Fund manager
How does the M&G Positive Impact Fund offer access to Impact Investing as an equity fund? The fund invests globally in equities of companies that have a positive impact on society that are involved in some of the world’s major social or environmental problems. The impact must be fully aligned with the company’s strategy and accounts for the majority of its business activities. We focus the fund on six areas of impact, three environmental and three social. Are the two categories environment and social impact equally weighted in the fund? We don’t have a hard division rule. So far, however, the categories have each accounted for around half of the portfolio, with a slight overhang in the social segment. This is mainly due to the fact that our “Better Health” impact area accounts for about one third of the total portfolio. Our focus is not the large pharmaceutical groups, but on niche companies with innovative approaches. Do you have an example? ALK-Abelló is a specialist in allergy immunotherapy. The treatment not only addresses the symptoms, but also the triggers. Over 500 million people suffer from allergies such as hay fever, which is closely linked to allergic asthma. However, there are only 4.5 million people, less than one percent, in treatment. ALK’s work has the potential to improve the lives of a significant proportion of the world’s population.
Ratings should not be taken as a recommendation. For more information, please visit www.mandg.co.uk/adviser/funds/positive-impact-fund/ For financial advisers only. Not for onward distribution. No other persons should rely on any information contained within. This financial promotion is issued by M&G Securities Limited which is authorised and regulated by the Financial Conduct Authority in the UK and provides ISAs and other investment products. The company’s registered office is 10 Fenchurch Avenue, London EC3M 5AG. Registered in England and Wales. Registered Number 90776.
You address the United Nations Sustainable Development Goals. How important are these for your strategy? The SDGs are a solid and accepted framework for identifying key areas of impact, and it helps measure how the positive impacts have been achieved. We use the SDG framework for the fund. We assign all our investments to an SDG and define specific key performance indicators to measure the impact achieved.
16 – PROVIDER SUPPORT
Supporting clients with surplus cash in their company Do your clients have surplus cash in their company, or, do you work with accountants who may have these clients? Having a healthy bank balance is nirvana for companies but could that nirvana turn into a nightmare for them? There are many reasons why companies want to keep surplus cash on account: • They want a war chest to give them peace of mind in case the company hits trouble • They may want to buy more premises in the future and/or • They may be planning to acquire or launch another business (and have been saying this for many, many years!) These are the most common reasons I hear for companies keeping high levels of cash on their balance sheet. However, this can cause potential issues down the line, such as: • If they keep far too much cash in the company that is not being utilised (at all) in the day-to-day running of the business, then they could be in danger of potentially losing their trading status and be deemed as an investment company. If this happens then they could end up losing their Entrepreneur’s Relief (ER) when they sell the business which would double their capital gains tax bill! • Cash in a company (again here I mean lazy cash which isn’t being used) could be treated as an excepted asset by HMRC on death and as such will not benefit from Business Relief (BR). This means if the business
owner died then Inheritance Tax (IHT) would be payable on this cash/ excepted asset even if the rest of the company did qualify. • Due to such miserable interest rates, the cash sat on deposit won’t even be keeping up with inflation, never mind growing, and so companies are losing the buying power on this money as time goes by. What can be done? There are many options available to these companies to potentially reduce/avoid the potential pitfalls mentioned above. This is assuming they haven’t found another company to invest in yet, or other ways to spend the money in the business. The four main options are: 1. Move that surplus cash out of the company via a pension (if applicable and desired). 2. Take extra dividends, suffer the tax, and invest elsewhere in their own (business owner’s) name. 3. Take an extra dividend, suffer the tax but invest it into an Enterprise Investment Scheme or a Venture Capital Trust and get 30% of the tax back again. This is often referred to as a 4–5 year exit strategy for getting money out of a business tax efficiently. 4. Keep the money within the realms of the business but have the money trading in another qualifying business such as a lending business.
PROVIDER SUPPORT – 17
Let’s explore this last point, as many company directors really don’t want to take money from the business for reasons we have already stated. But, unfortunately, they may never find those premises or another company, or they may hit troubled times. And if they die or come to sell the business, the challenges already mentioned will have to be faced. Blackfinch’s Thrive Corporate Management Service has been set up specifically for the purpose of allowing companies the opportunity to use their excess cash, as a trade, within a lending business. It’s well established and fully accredited by MJ Hudson Allenbridge. In order to qualify as a trade, the loans must be short term in nature (less than three years) with the expectation of them being recycled over time. By utilising this cash in another trade, assuming that they will be a trading and BR-qualifying company at the time of sale or death, then it could potentially help with: • Making their money work harder for them, as the target return (net of Blackfinch’s fees) is a very handsome and competitive 4–7%p.a. Of course, this is not guaranteed but is an expected target return. Blackfinch charges an annual management fee of 0.5% +VAT and will only take this after the agreed target return has been achieved. • Accessibility: this is one of the biggest advantages in case those premises do come up for sale or that fabulous business opportunity arises or they do indeed hit troubled times. • Receiving 100% IHT relief through BR as it is now being used in a trade rather than sat as idle cash.
• Not endangering their own trading status as, again, these loans are now trading alongside their main business to try and maximise the likelihood of HMRC granting ER at 10% when they sell. If you know clients/companies in this situation, then please do get in contact. This is also well worth sharing with your professional connections, especially accountants, as they would likely be pleased to have this as a talking point with their clients. T: 01452 717 070 W: BLACKFINCH.COM E: ENQUIRIES@BLACKFINCH.COM
IMPORTANT INFORMATION: CAPITAL AT RISK. THIS ARTICLE IS ISSUED BY BLACKFINCH INVESTMENTS LIMITED (BLACKFINCH), WHICH IS AUTHORISED AND REGULATED BY THE FINANCIAL CONDUCT AUTHORITY (FCA NUMBER 153860). REGISTERED IN ENGLAND AND WALES COMPANY NUMBER 02705948. THIS ARTICLE IS FOR INTERMEDIARY INFORMATION ONLY AND DOES NOT FORM ANY OFFER OR INVITATION TO INVEST. ALL INFORMATION CORRECT AT SEPTEMBER 2019.
Dominique Butters Executive Business Development Manager
Graham Duffy Care Specialist
18 – PROVIDER SUPPORT
Care funding advice is growing and can potentially be a profitable income stream for advisers. However, there are specific risks involved with this type of advice. At Just, we use our expertise and range of solutions to help advisers de-risk care funding advice. Alternatively, you can outsource all care advice to HUB Referral Solutions, provided by HUB Financial Solutions – part of Just Group. It’s a no obligation and no cross-sell service that offers your clients high quality advice and they’ll only pay a fee if they choose to buy a product. Are you exposing your business to unnecessary risk? How to tackle social care funding remains a conundrum. Around 53,000 1 ‘self- funders’ enter care homes each year but approximately only 3,300 2 appear to seek advice on the issue of how to fund their care. This presents a significant opportunity to your firm. Making sure that clients are able to receive their chosen level of care for the rest of their life is likely to be of paramount importance. Advisers need to be aware of the significant risks of recommending certain ‘investment’ solutions to fund care fees. The Risks of Funding Care Fees with Investments
The risk of relying on investments The Money Advice Service (MAS) warns about mis-selling investment bonds in relation to funding care. It states, ‘Investment bonds are not considered the best option to pay for your long-term care. However, in some circumstances they can be helpful. Furthermore, the charity Independent Age has produced a brochure on the different ways to pay for care. On using investments they advise: “Investment portfolios aren’t usually recommended to fund the cost of care, as older investors may not have the same flexibility to wait for a recovery if investments fall. However, you could consider investing any surplus you have after making sure you have enough to cover your likely care costs. Make sure you get financial advice before doing this.” Independent Age ‘Paying for your care’ No ‘investments’ are guaranteed and, even so-called superstars of the investment world get things wrong. Take the case of a 93 year old man who had money invested in a Neil Woodford fund and was prevented from accessing it to pay for his wife’s care home fees. The longevity risk When it comes to care funding, longevity is a key consideration and the priority should be ensuring that fees can be paid for as long as they’re needed. No one knows how long a client will need care for, so how can you be sure on the length of time an investment needs to last? Living longer than expected can wipe out even sizable estates. Care fees often top £40,000 p.a. so the impact of living longer than expected can be severe. When investments are the recommended source of care fees, advisers must ensure that they will last the whole of the client’s life. The client and adviser are both exposed to the risk that the fund won’t last long enough. The risk of not understanding duties In many cases advice is not sought by the person requiring care but by someone acting under a power of attorney, often a family member. They’ll have signed a document confirming that they understand all their duties, including the need to act in the best interests of the donor (for example, their mum or dad) and not their own. Attorney duties must also be thoroughly understood by those being paid for acts for, or in relation to, a person who lacks capacity - including advisers! It’s essential to consider all options, risks and potential outcomes when devising a care funding strategy. De-risking your advice process We’ve used our experience and expertise in this area to develop solutions that can cover a client’s care fees, in whole or in part, for as long as they’re needed.
1 House of Commons Official Report Parliamentary Debates (Hansard) 2011 2 Medicals Direct Group quotes during 2016
For more information Call: 01737 233065 Lines are open Monday to Friday, 8.30am to 5.30pm Email: firstname.lastname@example.org Or visit our website for further information: justadviser.com Calls may be monitored and recorded, and call charges may apply. Please contact us if you would like this document in an alternative format.
PROVIDER SUPPORT – 19
Andrew Tully Technical Director
The importance of offering tailored retirement advice
Not so long ago the biggest risk facing clients was losing their hard-earned savings in the run up to retirement because of some careless, or unlucky, investment decisions. But now there’s a new threat at large - people are at increased risk of running out of money in retirement. And with the rise in popularity of flexi-access drawdown, the problem is becoming more acute. The FCA’s expectations of retirement advice This is quite a departure from where we were less than five years ago, and it has given rise to a plethora of challenges for advisers and their retirement advice process. In its Product Intervention and Product Governance Sourcebook (PROD) issued in January 2018, the FCA clearly laid down its expectations. In short, you must be abreast of the full range of product options, and provide a detailed, tailored recommendation report for every client with regular reviews thereafter. Why developing a CRP could be the answer We’re increasingly hearing calls for advisers to develop a Centralised Retirement Proposition (CRP) to sit alongside their Centralised Investment Proposition (CIP). In short, a CRP can offer a framework that helps you manage the various interrelated risks of giving retirement advice, while helping you address the issues your clients face as they enter retirement. These include: By modelling the amount of income a client can reasonably expect to take to around age 100, you can manage their expectations and flag any gaps or surpluses that exist. While it’s impossible to predict the future, you can also factor in likely future events, such as paying for a wedding or university fees, and allow for any unexpected expenses. Help them understand their capacity for loss By modelling different scenarios whereby clients lose a percentage of their fund through poor investment performance, you can help them better understand the amount of risk they NEED to take, rather than the amount of risk they WANT to take. It’s this understanding of your client’s capacity for loss that should underpin the investment strategy. Managing expectations on how much income your client can expect
Assess if they are, or could become, a vulnerable client
Vulnerability comes in many different forms, and spares no one. It could relate to your client’s health, certain life events (such as divorce), how resilient their finances are to unexpected losses, or even their level of financial knowledge. By assessing your clients against each of the FCA’s drivers of vulnerability – both at outset and at their regular reviews - you can ensure your advice is tailored accordingly. Ensure your recommendations are cost appropriate All costs should be clearly documented and included within any income modelling. You must ensure your client fully understands the costs involved and the impact they will have on their future income. Offer regular income reviews Every individual in retirement has evolving needs. These needs can change gradually over time, or they could change in an instant. Offering regular reviews could be beneficial for them, and you. Working together Never has it been so important for advisers and product manufacturers to work together in partnership. We can help you construct your CRP, as well as provide as much product and marketing support as you need – not just around our products, but for the range of products on the market. It’s in all our interests that advisers are well-equipped to help their clients achieve a sustainable retirement income, with as little risk as possible for all concerned. Contact us If you’d like to get in touch with us, you can call us on 0800 912 9945. To find out more about retirement solutions from Canada Life visit canadalife.co.uk/adviser/retirement Canada Life Limited, registered in England no. 973271. Registered office: Canada Life Place, Potters Bar, Hertfordshire EN6 5BA. Telephone: 0345 6060708 Fax: 01707 646088 www.canadalife.co.uk. Member of the Association of British Insurers. Canada Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36
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