Selected Issue 1

A Tenet Group Publication

Issue 1 Spring 2018

SPECIAL FEATURES General Data Protection Regulation (GDPR) – What do I need to know? A range of services to add value to your firm

OTHER FEATURES Up Close and Personal with Simon Broadley, Adviser Propositions Director. Tenet Paraplanning – a potential extension to your business! Smart-Beta: An active approach to passive investing?

TENET COMMUNITY Calling all advisers – do you have an interesting story to share?

Our continuing journey through the regulatory landscape…

The Latest Provider Support Offering insight into market conditions and adviser opportunities

Welcome - 3

CONTENTS… what’s in this issue

Editor’s Foreword

4 Our continuing journey through the regulatory landscape…

Simon Broadley, Adviser Propositions Director, takes us on a walk through the latest regulatory news specific to directly authorised firms. approach to passive investing? The Active vs Passive debate is a long standing one within the investment industry. Both approaches have attributes that make them desirable in different areas and market conditions. Masterclass One – starting May 2018, Cycle Two Professional Development Meetings – starting May 2018 and CPDWebinars. Book your places today! 10 Up Close and Personal with… Simon Broadley, Adviser Propositions Director. 12 General Data Protection Regulation (GDPR) – What do I need to know? The GDPR will introduce new concepts and rights for the data subjects, some of which will have a significant impact on how you handle and use personal data. 14 The Tenet Platform The Future is Bright 16 A range of services to add value to your firm Are you aware of all the value- added services available to you? 18 Tenet Paraplanning – a potential extension to your business! 6 Smart-Beta: An active 8 Have you planned your calendar of events for 2018? Coming soon - Non-Investment Roadshows – Round One – starting April 2018,

Hello and a warm welcome to the first issue of Selected magazine Dedicated to directly authorised firms and advisers Our regular readers of Connected will be familiar with the format of this new magazine but will notice a change, as Simon Broadley, Adviser Propositions Director takes over the mantle for the industry update fromHelen Ball. In this edition he takes us on a walk through the latest regulatory news specific to directly authorised firms. This first issue of Selected is a ‘lively’ magazine, as we have news and articles from a number of Tenet business areas. I have highlighted a few below but as you read your way through the magazine, I am sure you will find a number of areas of interest. Also in this issue General Data Protection Regulation (GDPR) is looming and like me you may have already started to receive communications from companies holding your data referring to this new regulation. But as a business what do you need to know? GDPR will introduce several new concepts and data subject rights, so our article on page 12 provides a detailed overview of what you need to know and do. Under the spotlight in this issue is our new Adviser Propositions Director, Simon Broadley. Simon has also taken up the role of Managing Director of TenetLime. Having joined Tenet in early January, we speak to Simon in his first few months about his plans going forwards and also ask a few personal questions, so you can get to know him a bit better. Paraplanning at Tenet has grown rapidly over the last few years in response to demand from our members. As more and more advisers start to use the service, in this issue of Selected , we answer some of the frequently asked questions we get from new users…but don’t just take our word for it – read what Alan Johnston of City Gate Aberdeen Ltd has to say about the service. Finally, could we provide more to help you and your business? In this issue we highlight the range of services we provide for directly authorised firms and advisers, so to help you make an informed choice take a look at our special feature on page 20. This magazine is for you, so please let me know your thoughts and don’t forget the community section where we can highlight your news and activities to share with likeminded colleagues. I really hope you find Selected an interesting and useful read, and if you want me to include anything else in future issues, don’t hesitate to get in touch – email me at: sara.healey@tenetgroup.co.uk. Best wishes Sara J Healey Marketing Consultant

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19 BREAKING NEWS! - New Training & Development Support

The Tenet Training Team has created new Protection Training material to support opportunities within the Protection market.

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PROVIDER SUPPORT 20 – 36 Latest News and Products

Contacts

Editor Sara Healey

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

Our continuing journey through the regulatory landscape

Welcome to our new magazine for TenetSelect clients, which aims to provide you with more tailored content for directly authorised firms.

In my new role as Adviser Propositions Director, I’ve enjoyed spending the past months getting to know more about the business and the support and services we offer. Tenet has a very positive reputation in the market, which provides us with a firm foundation to build on, but there is however, always room for improvement. Over the coming months, I want to start off by fundamentally reviewing our member propositions, asking how we can enhance them and what needs we are not meeting. To read more about the things I’ll be focusing on initially, please see the ‘Up Close and Personal’ profile on page 10 and I’m also looking forward to getting out on the road at our forthcoming events and meeting as many of you as possible in person. Insurance Distribution Directive (IDD) At the time of writing, the European Commission has proposed to delay the Insurance Distribution Directive (IDD) to 1 October 2018. This is currently under consideration by the European Parliament and European Council. Consequently the UK Government has stated that they will delay the legislation bringing the IDD into force, pending a decision at EU level.

Simon Broadley Adviser Propositions Director

This does not change the new requirements however (just the effective date) or any other changes we have previously

Industry Update - 5

Senior Managers & Certification Regime (SM&CR) Similarly, the timetable for implementing the Senior Managers & Certification Regime (SM&CR) also looks to be delayed for directly authorised firms, with the implementation date now looking like it will be mid to late 2019, but this is to be confirmed by HM Treasury, who have the final say. We will support you to use this extension of time to be gaining an understanding of the level of regime that will apply to your firm and the specific requirements you will need to meet and plan ahead for this. Information prompts in the annuity market New rules came into force on 1st March which will change the format of annuity quotations. The main impact will be on providers, as the overriding purpose of the FCA changes was to protect consumers dealing directly with providers, and the current provider of their pension accumulation product in particular. You will be able to rely on the providers giving the information prompts therefore, but should ensure you are in a position to discuss these with clients. The prompt will give specific information and direct consumers to the Money Advice Service annuity comparator tool, as well as encouraging consumers to consider if they may be entitled to an enhanced annuity due to their state of health or if they are entitled to a guaranteed, enhanced or protected benefit. General Data Protection Regulation Forthcoming General Data Protection Regulation is a huge subject, which we’ve aimed to break down into bitesize guidance over the past months. While some of the basic principles of the existing regime will be retained, the GDPR will introduce several new concepts and data subject rights, including the “right to be forgotten”, data portability and accountability. Some of these new concepts could have a significant impact on firms, and may require a change to both the handling and use of personal data. Please see our article on page 12 for an overview of what you need to know and do. It is your responsibility to ensure compliance under GDPR however and you should already be giving thought to how GDPR will affect your particular business model. It will be important to ensure all staff receive appropriate training and we suggest that you retain records of this. We recommend the Information Commissioner’s own website for more information and practical guidance and we issued a useful checklist at the start of March, in the same way that we did for MiFID2 and IDD, which summarises all the actions and links to the relevant Tenet communications. In summary, there’s a lot going on – as MiFID2 is bedding down into everyday practice, GDPR is looming, but remember that we’re here to help. Plus our schedule of professional events are also designed to cover key regulatory issues, with insight from our provider partners on how they can support you.

communicated in terms of the impact of the IDD. If you have already adjusted your process, the focus of your CPD activities and updated your initial disclosure documentation regarding your insurance services, it is not necessary to unwind this as you have simply prepared for the change in advance. If you are yet to make the relevant changes, you can either wait for the implementation date to be confirmed or continue to make the adjustments in advance. We will confirm the date once known.

6 - Special Feature

SMART-BETA: An active approach to passive investing?

Kate Quarmby Trainee Technical Services and Research Consultant

Active or Passive? Many investors are confused as to where this investment type sits, as previously there were two main categories; active or passive, which is pretty black and white. Smart-Beta is still technically classed as a passive strategy, because it is restricted to the index and it doesn’t have a fund manager who can make changes to the investment style based on topical factors or opinions on how the market will move. Instead it uses a computer programme to select stocks based on the strategies chosen to try and exploit market inefficiencies. The ‘active’ component means it does have the potential to offer superior risk-adjusted returns relative to the traditional market-cap weighted index trackers due to the many different factors or strategies that are used within the fund. Types of Smart-Beta There are numerous strategies used in Smart-Beta ETFs which offer a ‘twist’ on the conventional market-cap weighted indices. This could be focusing on volatility, dividends, size or style to name a few (we will look at these in detail below), rather than weighting blindly on size like the characteristic index fund. These strategies can broadly fit into one of two categories, return- orientated and risk-orientated. • Return-orientated: enhance returns compared to a benchmark • Risk-orientated: aim to provide a smoother return through market cycles Due to the many different approaches some Smart-Beta ETFs can be quite complex to understand, in particular some of the multi- factor ETFs, using several different strategies within the fund. However, there are less complicated options, with many ETFs using only one factor and investing in companies methodically based on that aspect only. Low volatility Low volatility is the biggest growing risk orientated strategy. Although return orientated funds are dominating the market of Smart-Beta’s, the uptake in low volatility ETFs has been substantial. These funds pick the lowest volatility stocks and give those the highest weighting, with the intention of offering smoother returns at a lower risk. These minimum volatility funds will tend to lag behind cap-weighted trackers in periods of market upswings but provide a degree of protection against market downturns. Holding these types of ETFs will not generate mind- blowing performance but should offer a smoother ride and an above average risk-adjusted return.

The Active vs Passive debate is a long standing one within the investment industry. Both approaches have attributes that make them desirable in different areas and market conditions. Passive funds are cheap and cheerful simply tracking an index; however, they lack the ability of an actively managed fund which aims to beat the return of the market. This is where Smart-Beta Exchange Traded Funds (ETFs) comes in, blurring the line between the two strategies.

What are Smart-Beta ETFs? Smart-Beta, Strategic Beta or Factor Investing, whatever its name, is proving popular at the moment, providing a ‘best of both worlds’ alternative to the typical active or passive approach. The aim of Smart-Beta is to achieve alpha, the active return on an investment relative to a benchmark, and increase diversification from cap- weighted index funds at only a marginally higher price than the standard index tracker. This could be achieved whilst retaining a significantly lower cost than actively managed funds. Smart-Beta is in essence a development of the traditional financial beta, which measures the volatility of an investment against the market as a whole. A stock with a beta of 1 has experienced the same level of volatility as the index, with a beta of above or below 1 demonstrating a higher or lower volatility respectively. The increased popularity in Smart-Beta strategies is driven by speculation of whether active managers can meet their primary objective of outperformance and tracker funds offering no control over where the funds are invested.

Special Feature - 7

Equal Weighted This is one of the more simplistic approaches, the ETF would apply the same weighting to every stock in the index e.g. if it was a FTSE 100 Equal Weighted Smart-Beta ETF, every stock held would represent 1% of the fund, providing more exposure to the smaller cap securities and less to the largest companies in the FTSE. Fundamentals A downfall of standard trackers is that they replicate the market return based on the size of the companies within the chosen index, meaning they are buying more shares in the most expensive companies and selling out of the cheapest. Some fundamentally weighted ETFs are based on sales, cash flow and most commonly dividends. The dividend focussed ETFs are portfolios constructed by weighting the stocks based on the highest yielding companies from the chosen index. Style Active managers have been investing based on style for a long time. Style-investing focussed ETFs essentially try to replicate what an active fund manager does, but instead of a person picking out the stocks, a computer programme systematically picks stocks based on the factors targeted. The most popular style based ETFs used are growth, momentum and value. None of these are new strategies and have been adopted by active managers for many years. Taking value as an example, the ETF would try to replicate what active managers do by running a programme to systematically select stocks with the lowest prices, giving them the highest weighting, and selling out of the overpriced securities. Multi Factor Investing Then there are multi-factor ETFs, which as the name suggests, will weight the stocks based on several of the strategies described above. These are used as a way to further diversify away from using single factor Smart-Beta funds but can end up being far too complicated resulting in a lower take up and many even being closed. There can be many different combinations of how Multi-factor ETFs are constructed. The majority tend to have a principal factor, such as using low volatility as a starting point and then use other factors – value/growth/momentum to further diversify the ETF.

Conclusion Smart-Beta strategies straddle the middle ground between the transparent and low-cost structure of passive indexing and the potential for excess return that is the goal of active investing. However, they should not be viewed as a ‘silver bullet’ and care should be taken to ensure you fully understand the risks involved and whether they are appropriate based on your client’s circumstances. Smart-Beta is an interesting area currently with passive managers entering this space based on their previous experience, and some active managers seeking opportunity in a growing area. TS&R monitor this market as part of the ETF Panel Research. However, we have limited panel coverage for Smart-Beta ETFs as the majority are in their infancy and have yet to prove their approach has played out. Watch this space! The Technical Services & Research team are always on hand to answer any questions you have about Smart-Beta, or anything else technical, so feel free to give us a call on 0113 2395317 or email tsandr@tenetgroup.co.uk .

8 - Events Focus

Have you planned your calendar of events for 2018? Attending our events will provide you with an excellent insight into current markets, new legislation, new products and services. It is a chance to network with your colleagues, product providers and Tenet staff, plus you get 3-4 hours of CPD awarded and recorded for you (when you have purchased the ‘My Professional Development’ service from Tenet). All events are free of charge, so, don’t miss out - plan your calendar today.

COMING SOON

NON-INVESTMENT ROADSHOW – ROUND ONE Starting April 2018 These events will be aimed at our Non-Investment advisers. The events will cover topics such as Mortgage, General Insurance and Protection. They will combine stand up formal presentations and interactive round tables. We recommend advisers attend both rounds of Roadshows as the content will be different at each. Target Audience: Mortgage and Protection advisers Approx Timings: 9.00am arrival 9.30am start - 3.30pm finish CPD: Approx. 3hrs 30 minutes unstructured To book your place on a Non-Investment Roadshow One visit: https://events.tenetgroup.co.uk/roadshowone2018 17/04/2018 Durham 18/04/2018 Leeds 19/04/2018 Manchester (Merseyside) Haydock Park Racecourse 24/04/2018 Cumbernauld The Westerwood 26/04/2018 Belfast Stormont Hotel 01/05/2018 Birmingham Village Solihull 02/05/2018 Bristol Doubletree Bristol North 03/05/2018 Southampton Hilton at the Ageas Bowl 10/05/2018 London Millennium Hotel London Knightsbridge* Ramside Hall* Village Leeds South* Date Location Venue

MASTERCLASS ONE Starting May 2018 This year we will continue our exceedingly popular Masterclass events. 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, planning scenarios to provide you with a greater understanding of each product and a proposition’s place in the market. Target Audience: Investment, Pension and Protection advisers Approx Timings: 9.00am arrival 9.30am start – 3.30pm finish CPD: Approx. 3hrs 30 minutes structured

To book your place on a Masterclass One visit: https://events.tenetgroup.co.uk/masterclassone2018

Date

Location

Venue

01/05/2018 Leeds

Village Leeds South*

02/05/2018 Manchester (Merseyside) 03/05/2018 Glamorgan

Haydock Park Racecourse

The Vale Hotel 15/05/2018 Cumbernauld The Westerwood 17/05/2018 Belfast Stormont Hotel 22/05/2018 Southampton Hilton at the Ageas Bowl 23/05/2018 London Millennium Hotel London Knightsbridge* 24/05/2018 Birmingham Village Solihull

*New venue

Events Focus - 9

CPD WEBINARS - Get your 30 minutes of CPD for each webinar you view! Throughout 2018, Tenet will be hosting a series of 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

‘Small Portfolio Landlords Are Confident About The Future – So You Can Be Too!

Presented by David MacKenzie, Corporate Account Manager on 23rd February 2018

Bank of Ireland will present the findings of their latest independent survey of small portfolio landlords, providing an indication of how landlords feel about the market. There is much to talk through including landlord optimism, tenant demand, their understanding of government changes and how their portfolios are performing. There is also detail of their recent activity, and what small landlords are intending to do in the near future. To finish, Bank of Ireland will talk through what they are doing to help this area of the market. http://webinars.tenetgroup.co.uk/webinar-1-2018

CYCLE TWO PROFESSIONAL DEVELOPMENT MEETINGS Starting May 2018

These events are designed with the main aim to meet advisers’ development needs and provide valuable insight into key industry issues. The PDMs offer a variety of important information from both our provider partners and Tenet’s senior management. Target Audience: Investment, Pension and Protection advisers Timings: 8.45am arrival 9.15am start - 3.15pm finish CPD: Approx. 3hrs 45 minutes structured

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.

To book your place on Cycle Two PDMs, visit: https://events.tenetgroup.co.uk/cycletwopdms2018 Date Location Venue 22/05/18 Manchester (Merseyside)

No 2 : The Exeter Content to be confirmed 27/04/2018 http://webinars.tenetgroup.co.uk/webinar-2-2018 No 3: Shawbrook Content to be confirmed 25/05/2018 http://webinars.tenetgroup.co.uk/webinar-3-2018 No 4: L&G Content to be confirmed 29/06/2018 http://webinars.tenetgroup.co.uk/webinar-4-2018 No 5: Together Content to be confirmed 28/09/2018 http://webinars.tenetgroup.co.uk/webinar-5-2018 No 6: TBC Content to be confirmed 26/10/2018 http://webinars.tenetgroup.co.uk/webinar-6-2018 No 7: TBC Content to be confirmed 30/11/2018 http://webinars.tenetgroup.co.uk/webinar-7-2018

Haydock Park Racecourse

23/05/18 24/05/18 05/06/18 06/06/18 07/06/18

Gloucester Glamorgan

Stonehouse Court*

The Vale Hotel

Cumbernauld The Westerwood

Durham

Ramside Hall*

Leeds

Village Leeds South*

12/06/18

Exeter

Sandy Park Conference Centre

14/06/18 20/06/18 21/06/18 26/06/18 27/06/18 28/06/18 03/07/18 10/07/18 11/07/18

Birmingham Village Solihull

Southampton Hilton at the Ageas Bowl Bishops Stortford Down Hall Country House Hotel

Sheffield

Tankersley Manor

Nottingham Nottingham Belfry

TBC

Reading Belfast

Hilton Reading Stormont Hotel Hilton Maidstone

Maidstone

London

Millennium Hotel London Knightsbridge*

TBC

If you have any queries, please call the events team on 0113 239 5334 or email events@tenetgroup.co.uk You can book our events online – simply visit: https://events.tenetgroup.co.uk/ADP2018

If you have any queries, please call the events team on 0113 239 5334 or email events@tenetgroup.co.uk

10 - Up close and personal with…

Up close and personal with… Simon Broadley Under the spotlight in this issue is our new Adviser Propositions Director, Simon Broadley. He additionally took up the role of Managing Director of TenetLime. Having joined Tenet in early January, we speak to Simon in his first few months about his plans going forwards and also ask a few personal questions, so you can get to know him a bit better.

I also want to establish more robust insight and feedback in terms of how we compare to our competitors, to identify if there are things that we’re not doing, or not doing as well as our peers. I certainly don’t want or feel we need to change the essence of our business, so it’s evolution that I’m talking about, not revolution. 3. What are your hobbies and interests outside the office? With two young sons (aged 5 and 1), my free time for hobbies isn’t what it used to be! However, between the Lego building, swimming lessons and endless children’s parties, I’m a keen sports fan and have been a Bradford City season ticket holder for 25 years. My real passion however is cooking and wine, where I have to admit to being a bit of a wine geek, to the point of making notes about what I drink. I am very partial to an Italian red, thanks for asking! 4. What kind of music gets your toes tapping?  I’ve got quite an eclectic taste in music, ranging from Motown and Ska to 90s Britpop.

1. Can you give us a brief history of your career to date?

I’ve been in the financial services industry for over 20 years now, most recently as Head of Insurance and Investments at Yorkshire Building Society Group. I also did a stint as the group’s Head of Product Development and I’ve additionally been seconded into roles to lead sizeable remediation programmes, so I’ve first-hand experience of what things look like when they go wrong – and how to avoid them happening in the first place! 2. What are you looking forward to in your new job at Tenet? I’ve joined the group at a real time of stability and opportunity and having the luxury of deciding how and where you want a business to grow is both refreshing and liberating. Tenet has a very positive reputation in the market, which provides us with a firm foundation to build on. There is always room for improvement however, and I want to start off by fundamentally reviewing our member propositions, asking how we can enhance them and what needs are we not meeting?

Up close and personal with… - 11

5. What book are you currently reading? Hugh Johnson’s pocket wine book is always to hand, plus I’m reading ‘Traction’ by Gino Wickman. I’ll be hoping to apply some of his business principles going forwards, to help align our priorities right across the group in 2018 and ensure that we are all pulling in the same direction. 6. What’s your favourite film of all time? That’s a tough one. I would have said previously something like Scarface or Casino – but more recently the TV is dominated by my two sons, Jack and Oliver, so Despicable Me has to be up there!

7. If you could trade places with anyone for the day who would it be and why? Donald Trump’s executive assistant, as I’d like to see first- hand whether the reports and rumours are all true! 8. What’s the biggest lesson you’ve learnt in life? To be here now and appreciate the moment. 9. And finally, tell us an interesting fact about yourself... I once competed in the Latvian Open Golf Championships! Before you get the picture that I’m some kind of pro, I’m definitely not, but a friend’s brother was a pro at a course in Riga and somehow got me in. It was quite intimidating once I arrived and realised that the championships was the real deal – needless to say, I didn’t do too well against the competition, but think I played as well as I ever have done.

I am very partial to an Italian red... thanks for asking!

12 - Special Feature

GENERAL DATA PROTECTION REGULATION (GDPR) What do I need to know?

The GDPR will take effect in the UK on 25 th May 2018, replacing the current Data Protection Act. It’s important that you comply with the GDPR, especially with increased fines in the offing, so please don’t assume this doesn’t apply to you or your business – you as the firm are the data controller and need to ensure that you are compliant.

What is the new regulation? Whilst the basic principles of the existing Data Protection Act regime will be retained, the GDPR will introduce new concepts and rights for the data subjects, some of which will have a significant impact on how you handle and use personal data. The biggest change is the increased fines for data breaches. Currently, the Information Commissioners Office (ICO) fines have been limited to £500k, but GDPR increases this to the higher of 4% of the annual turnover or € 20,000,000. In the GDPR world, data controllers will need to be prepared for the ICO taking stricter enforcement action independently of the FCA to utilise the increased fines, creating an additional financial risk in conjunction with the existing legal and reputational risk. What is the current position? How you collect, store, use and hold the personal data of your clients and employees is currently governed under the Data Protection Act 1998 (DPA). Just as Tenet is required, you also are required to be registered data controllers and hold an ICO data protection licence. You are responsible for personal data (client, employee and supplier personal information) and are required to comply with the eight data protection principles under the DPA. Tenet will process Select clients ‘and its customers’ personal information for the purposes of providing services under the contract it enters into with the Select client firms. In terms of your responsibilities as data controllers under GDPR, the key areas are summarised opposite:

• Data Processing - Data controllers must have a legal ground for processing personal data. Legal grounds are: - Explicit consent - the data subject has given you explicit consent. - Performance of a contract – for example to provide financial services under the client agreement. - Meeting legal obligations- for example, to meet regulatory requirements e.g. from the FCA. - In the legitimate interests of the data controller – for example, to promote and manage the business, such as defending advice claims. • Third Party Data Processors - You must have a written agreement between you as the data controller and the third party data processor to be able to process personal data e.g. if you share personal data with your third party IT supplier / third party paraplanner, you need a data processing agreement in place. Tenet will undertake this with the product providers on its panels and its partnered suppliers. • Data Breaches - The GDPR makes it mandatory to report data breaches to the Information Commissioners Office (ICO) within 72 hours, unless the breach is unlikely to cause damage to the individual. You should review your internal data incident reporting procedures or introduce some simple steps so you can detect, report and investigate a data incident and include these procedures in a policy, including staff training, a reporting process and a data incident log.

Special Feature - 13

• Data Protection Officers – Some organisations must have a Data Protection Officer (DPO); this is someone responsible for data protection compliance within your firm. We think our clients will not fall into the category but you still need to appoint a ‘Privacy Officer’ who has sufficient skills to meet your obligations under GDPR. This can be an existing member of staff that already has some knowledge of data protection, or can gain the knowledge through training. • Privacy Policy and Notices - You, as data controllers are required to take ‘appropriate measures’ to provide information about how you process your clients’ personal data. The template client agreement we provide currently includes a basic privacy notice that tells your clients who you are, what you are doing with the data and who you share it with - that includes sharing it with Tenet and also captures your clients’ consent for marketing activities. You (as do Tenet) may also have a privacy policy on your website including more detailed information about how you handle clients’ personal data, making this information easily available. Going forwards, this will be replaced by a standalone privacy notice that will signpost your own privacy policy, via a link to your website. You will need to obtain advice on what this privacy notice should contain although we will be able to give you some basic guidelines. You need to start thinking about revising your existing privacy policy or introducing a privacy policy to be GDPR compliant.

• Data Subjects Rights– Data subjects have the right: - To be informed about how their data is processed (through a privacy notice/ privacy policy). - To have their data rectified if inaccurate or incomplete. - To restrict the processing of their personal data. - To object to their personal data being processed. • Data Subject Requests – Data subjects can request: - A copy of their personal information (under a DSAR) provided free of charge and in an intelligible form. - To have their personal data transferred electronically (referred to as ‘portability’). - To have their personal data deleted, (‘erasure’) unless there is a reason to retain it, such as to defend an advice claim. • Accountability, Transparency and Data Minimisation- It is your responsibility to clearly demonstrate that your organisation complies with the principles of GDPR by implementing systems and processes, for example by implementing data protection policies, undertaking staff training, internal audits, IT security, appoint a Privacy Officer, document lawful grounds for processing and introduce principles of data minimisation (e.g. ensure you collect the minimum amount of data for each specific purpose) and privacy controls in your business. • Training – Staff awareness and training is critical to protecting personal data, so you must ensure all staff within your organisation have had data protection training. We recently circulated our own GDPR checklist, which provides a useful summary of the actions firms need to complete, but if you have questions on any elements of this, please contact the Compliance Helpdesk in the first instance. We also recommend the Information Commissioners’ own website for more information and practical guidance. Finally, on the subject of data protection, it’s important to be aware that the preferred method for sending documents to Tenet’s Advice Support Team going forwards is for them to be uploaded onto Tenet Advantage (where this system is relevant to you) and a notification sent to the relevant email address that the file is ready for assessment - this will ensure you meet your data protection responsibilities and the clients’ data is secure. Alternatively, you can send by a file share facility and notify the relevant email address.

16 - Special Feature

A range of services to add VALUE TO YOUR FIRM

MIFID...IDD…SMCR...GDPR…a lot of letters which could add up to a headache for the principals and compliance managers of directly authorised firms - as well as reducing the time left to service clients. TenetSelect is available to help reduce some of that burden, by providing a wide choice of support services so that you can select the perfect ones for your business. Our services cover all the key areas, including quality compliance support, research and technical services.

But are you aware of all the value-added services available to you? TenetSelect is a business that is exclusively focused on helping directly authorised firms meet their compliance requirements and grow their business. So maybe now is the time to take another look at what we can do to support you. On the next page is a list of the many services we provide via TenetSelect which are designed to either keep your firm compliant or add value to your day to day operations by saving you time or money. If you’d like more details of any of the services, please get in touch with your TenetSelect Account Manager. We are here to help.

WHAT REGULATORY ISSUES ARE KEEPING YOU AWAKE AT NIGHT? We are experts at providing directly authorised firms with a helping hand and reassurance. So, if you have any concerns about being compliant in any of the regulatory areas shown below, please get in touch.

Markets in Financial Instruments II (MiFID II) Effective from 03 Jan 2018

General Data Regulation (GDPR) Due 25 May 2018

Insurance Distribution Directive (IDD) Due late 2018

Senior Managers & Certification Regime (SM&CR) Due mid-late 2019

WE UNDERSTAND THAT A ONE-SIZE FITS ALL APPROACH WON’T FIT THE NEEDS OF MOST FIRMS

WE PROVIDE A CHOICE OF SUPPORT SERVICES SO YOU CAN SELECT THE PERFECT FIT FOR YOUR BUSINESS

Special Feature - 17

TAKE A LOOK AT ALL THE SERVICES AVAILABLE…

Specialist investment support • Review of EIS/BPR/Tax Planning Schemes and the client profile • Feedback on general suitability of the client and the legitimacy of the scheme Pension switching validation tool • Minimises risk by indicating if outperformance is achievable on pension switches Paraplanning • Full paraplanning service including data gathering research, analysis and client report Tenet’s cashflow analyser tool • Lump sum withdrawal and full assessment cash flow analysis options • Helps define and review a client’s Living in Retirement strategy • Customer facing output Advanced Diploma (AF) exam days • Outsource the handling of client complaints RMAR submission software and report completion • Software to help you do it or outsource it to us New Adviser Recruitment • Our recruitment service will find the right adviser for your business Exclusive software discounts • Range of discounts to save you money e.g. software CPD events • Invite to our events where you have everything you need for your CPD Marketing support • Utilise our range of compliant marketing support Protection panels & mortgage club • Access to leading terms via our panels Account management • Access to a dedicated account manager to help you make the most of our service • 1 day revision programme Complaint handling service

File checking service • Full range of product areas covered, including pension transfers Themed audit • Systems & controls, Training & Competence, disclosure & ongoing servicing, Centralised Investment Proposition Fully outsourced T&C implementation • One-to-one visits, file reviews, observations/role plays Compliance helpdesk for ongoing queries • Access to our regulatory experts as and when you need support Financial promotions and stationery approval • Assessment of your marketing and stationery to help ensure it meets the FCA’s requirements On-site attendance for FCA visit • A regulatory expert on hand to reduce potential risk Comprehensive compliance guidance manual • Manual which you can adopt for your firm Compliance, systems & controls template documentation • Wide range of documentation available via the Extranet Full Suite of regulatory registers • Designed to capture a variety of management information and highlight potential risks Regulatory guidance bulletins • Ongoing updates and guidance to help you remain compliant Research & technical support • The Tenet panel, technical guidance, including access to a helpdesk Investment solutions • Tenet’s active Model Portfolios powered by Morningstar • Tenet’s risk targeted, managed portfolio solution (Tenet PRIME) • Risk profiling tool • A Centralised Investment Proposition (CIP) template Morningstar • Tenet’s risk targeted, managed portfolio solution (Tenet PRIME) • Risk profiling tool • A Centralised Investment Proposition (CIP) template

WANT TO KNOW MORE? To find out how your firm could benefit from the many services available or for details of packages and costs, please call 0800 085 0825 or contact your Account Manager.

18 - Special Feature

Tenet Paraplanning - a potential extension to your business!

Paraplanning at Tenet has grown rapidly over the last few years in response to demand from our members. In 2017 we helped over 117 firms with over 1,100 cases. As more and more advisers start to use our services, in this issue of Selected, we answer some of the frequently asked questions we get from new users…

What can Paraplanning do for me? We can support you with everything from comprehensive administrative tasks and research to full report writing, or a more bespoke and tailored service designed to complement your business. What sort of cases do you do? Pretty much everything! We work on a wide range of cases, from straight forward protection cases, pension and ISA funding and platform reviews, to the more complex work like DB Transfer Reviews, QROPs, Estate Planning, VCT/EIS Cases and Equity Release to name but a few. We also offer a Centralised Investment Proposition (CIP) design service, working to your firm’s requirements to provide a proposition that will make the advice process easier for your business. Please give us a call to talk about your specific case. How much does it cost? We offer competitive fixed prices for the majority of case types. For anything else, we operate bespoke pricing at an hourly rate. We will always provide you with a personalised quote at the start of the process based on your exact requirements so you know the total amount you will have to pay. What do I get? Obviously, this depends on what work we are carrying out for you, but for normal paraplanning you get a fully compliant (Pre-Sale Approved) file containing research, illustrations, cash flows and Suitability Report. We can also send you two professionally bound copies of the finalised report, complete with your company logo for you to present to your client. As one of the key benefits of paraplanning is to save you time, you can be assured that once we have all the initial documents we require for a case there will be minimal work required from you. We have developed a Case Submission form to ensure this process is as streamlined as possible and to enable us to commence work on your case without delay. To save you the hassle of having to collate all the information yourself, full data gathering is available at no additional charge. In these instances, we have a Letter of Authority for your client to sign to allow us to do this for you. • TVAS Reports – for Defined Benefit Transfer Reviews Sometimes you won’t need us to do a full Defined Benefit suitability review, so we can produce a TVAS report only for your case using Select A Pension; a fully independent service. As part of the TVAS, we can gather the required data at no additional cost. How do I get started? Give us a call and we will talk you through the process. Our most popular services are: • Full Research &ReportWriting

Training Support - 19

The benefit to you By using Tenet Paraplanning, not only does this save you time, but allows you to see more clients and expand your business, providing a cost efficient alternative to employing staff. Our service is designed to meet your needs and our paraplanners will discuss each aspect of the case with you giving you fresh solutions for your clients’ objectives. Paraplanning provides you with access to specialists and gives you peace of mind, allowing you the time to build and add value to your business. Paraplanning at Tenet offers a flexible solution to help you meet the demands of your business.

How long does it take? On a positive note, due to the expansion of the team, our timescales are reducing further. We operate service levels so that you can manage expectations with your client. Our report writing SLAs are now down from 20 to 15 working days, with additional time for checking.  If you have an urgent case that you need completing more quickly, we offer a fast track service (for additional cost).  When do I pay you? There is nothing to pay until you are completely happy with the report and usually we will contact you to arrange for payment of the case 30 days after the completed work has been sent out to you.

Alan Johnston FPFS Cert SMP, City Gate Aberdeen Ltd

Don’t just take our word for it… One of our longest standing clients, Alan Johnston at City Gate Aberdeen has used our service from the start. “I have been using Tenet Paraplanning for all my pension and investment business since 2014. The main benefit to me is that I can see more new clients myself knowing I have the expertise of the Paraplanning service behind me to write the reports. I am kept regularly updated to ensure we get the right solution for the client and the reports are tailored to my business style. “As I am so busy, the Paraplanning service is imperative to adding the most value to my business. I am very pleased with the service and see it as an extension to my own business.” Winner of TenetConnect Adviser of the Year 2017. Winner of TenetConnect Firm of the Year 2015, 2016 & 2017.

To find out more you can call us on 0113 239 5326 or email paraplanning@tenetgroup.co.uk . We are always happy to talk through your case with you and let you know how we can help!

BREAKING NEWS! New Training & Development Support

The Tenet Training Team has created new Protection Training material to support opportunities within the protection market. This will be available from March 2018. It will cover the sales process and help new and existing advisers develop their knowledge and skills in the Protection area. Primarily designed to be delivered as a face-to-face learning, the course will focus on Life Assurance, Income Protection and Critical Illness.

Created as a suite of modules - you can select all modules or individual ones as appropriate. Full trainer notes will be available to enable you to deliver at your own events or with your own staff. Future development will see the modules available on a webinar basis. Please note, this will be a chargeable service.

If you are interested and want to know more, please drop an e-mail to the training team at trainingteam@tenetgroup.co.uk

Suite of modules available

Product Knowledge

Identifying Needs

Prospecting

Presenting Recommendations

Objection Handling

Research

Provider Support - 21

Are advisers ready to prove annuity advice?

Advisers’ processes must change when new rules come into force from March March will see the introduction of the FCA’s annuity comparison requirements, following its policy statement PS17/12 last year.

This issue around consent is one area where an adviser will need to firm up their process. To enable a comparison to be done, an adviser must obtain confirmation from the client they are happy with their personal data being used to provide a comparison. Portals and providers will ask for this before a quote is done to ensure they are using the correct template. Many advisers will use a portal as a first step to compare annuity income available. If viewed on screen there is no change to the process. But advisers will notice a difference if details are printed as, at that stage, one of the three templates will be included. Best rate? It is also worth being aware there may be inconsistencies across the industry. Different providers may use different portals to source the best rate and subtle differences between portals could mean what was seen as the best rate on one portal may not be on another. Problems may also arise once a decision has been made to purchase an annuity. There is likely to be a delay of a few weeks before the funds are received by the chosen annuity provider. As the amount received will inevitably be different to what was originally quoted, the provider will prepare a final illustration showing the actual income the customer will get. This illustration also needs to include a comparator and, as the annuity market is constantly changing, it may show this provider no longer offers the best rate. Documenting the evidence It is crucial that advisory firms document what happens in this situation. They could invoke cancellation rights, re-broke the case and pass it to the new best provider. But by the time that happens the same issue could arise again, and adviser and client could be caught in a never-ending loop. Clients may also be unhappy with further delays as they will need the income. An alternative would be to have some form of de minimis limit, going ahead with the original quote if the difference is minimal, and re-broking if it is a larger amount. An annuity comparator sounds like a simple concept to help people get the best deal. And at heart it should be. But the practicalities are, perhaps inevitably, much more complex. It is important advisers have a suitable process and keep clients informed.

Andrew Tully Pensions Technical Director, Retirement Advantage

Few people will argue with the aim of helping people get the best deal at retirement. However, there are a number of significant flaws around the design and implementation, so it is important advisers take time to work out their processes as a result of these changes. New illustration templates From 1 March, any guaranteed annuity illustration will include one of three new prescribed templates. This addition will either show the annuity income quoted is the best in the market, that the client could get a higher annual income elsewhere or that they have not consented to the use of their data for a comparison to be made.

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Provider Support

Main Header Taking profits from a Limited company? Intro text

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Body Header Bold Body Copy Body Copy

Only take profits from your business that you need…

Whilst many limited company owners and personal services companies will be concerned about reduction of the dividend nil rate of taxation from £5,000 to £2,000 next year, it’s important that they consider all options for extracting profits for their business. A salary of £8,164 and taking the rest of what you need to spend on your day-to-day living as dividends may continue to be the most efficient way to meet day-to-day costs. But thereafter, why would you extract more than is needed? If we look at the rates that dividends are taxed in comparison to salary and pension contributions, then you can see that pensions are the clear winner. The following table assumes that the zero rate of taxation for dividends, along with the personal allowance has been used up

for paying the business owners day-to-day spending. This shows the percentage of business profits that will ’arrive’ in the business owner’s personal bank account if withdrawn via dividends. This is after corporation tax and personal income tax liability against pensions being used ( 25% tax- free cash taken, with the remainder taxed in the relevant banding). As can be seen, the most effective way to extract profits is a pension. Granted you can’t currently access this until age 55, but if the business owner doesn’t need access to their money until this point, should pensions not be an important part of the profit extraction methodology?

Income Tax (assuming 25% tax free cash)

Per £1,000 of business profit in your pocket

Percentage rate of taxation on the £1,000

Employer National Insurance

Employee National Insurance

Corporation Tax

Dividend Tax

Salary

0.00% 13.80% 12.00% 20.00% 0.00% £597.54

40.25%

Basic Rate

Dividend

19.00% 0.00% 0.00% 0.00% 7.50% £749.25

25.08%

Pensions Contribution

0.00% 0.00% 0.00% 15.00% 0.00% £850.00

15.00%

Salary

0.00% 13.80% 2.00% 40.00% 0.00% £509.67

49.03%

Higher Rate

Dividend

19.00% 0.00% 0.00% 0.00% 32.50% £546.75

45.33%

Pensions Contribution

0.00% 0.00% 0.00% 30.00% 0.00% £700.00

30.00%

Salary

0.00% 13.80% 2.00% 45.00% 0.00% £465.73

53.43%

Additional Rate

Dividend

19.00% 0.00% 0.00% 0.00% 38.10% £501.39

49.86%

Pensions Contribution

0.00% 0.00% 0.00% 33.75% 0.00% £662.50

33.75%

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