T11658 LIMELIGHT 54 Autumn 2018_ebook

LIMELIGHT A Tenet Group Publication for Appointed Representatives of TenetLime

Issue 54 n

Autumn 2018

Five things you need to know about the IDD - Insurance Distribution Directive IN THE DRIVING SEAT Diabetes Life Cover helps your clients take control adviser.royallondon.com/diabetes

ALSO IN THIS EDITION Market Watch - helping you place your trickier cases Events - Make sure you book your place at the Annual Adviser Forum

PLUS: Limelight gets ‘Up Close and Personal’ with our Head of Marketing and Communications

Protection can be complex and expensive for people living with diabetes.That’s why we’ve created a product and an application process that’s tailored to them. Diabetes Life Cover is specifically designed for your clients with type 1 and type 2 diabetes, helping them get the cover they need quickly. And it works flexibly with their health, so premiums could be reduced if their condition improves. Find out more at adviser.royallondon.com/diabetes

THIS IS FOR FINANCIAL ADVISER USE ONLY AND SHOULDN’T BE RELIED UPON BY ANY OTHER PERSON.

LIMELIGHT A Tenet Group Publication for Appointed Representatives of TenetLime

Issue 54 n

Autumn 2018

Five things you need to know about the IDD - Insurance Distribution Directive

ALSO IN THIS EDITION Market Watch - helping you place your trickier cases Events - Make sure you book your place at the Annual Adviser Forum

PLUS: Limelight gets ‘Up Close and Personal’ with our Head of Marketing and Communications

Introducing Post Office Family Link ™ No deposit. No problem. I troducing ost Office Retirement Link ™ A residential mortgage for retired customers with pension income.

Post Office Family Link™ is designed for your first time buyers who haven’t saved a deposit but have good affordability. They simply take out a 90% LTV mortgage against the property they’re buying. Then with their assistor (parent or close relative) they take out a mortgage for the remaining 10%, secured against their assistor’s mortgage free home. Help your first time buyers get their first home sooner with Post Office Family Link™. With Post Office Retirement Link™ you can help your retired customers secure a mortgage using t ir guaranteed pension income. And as this is not equity release, you can offer this solution without the need for a lifetime qualification. There ar two options available: • Our capital and interest option allows your customers to still own their ho e at the end of the mortgage term, so they’ll be able to pass on 100% of their home when the time comes. • With our interest only option they’ll be able to access a lump sum secured against their mortgage free home and repay the loan when they sell their home. So whether your customers would like to help out family members or make some home improvements, Post Office Retirement Link TM allows them to live retirement their way. Now that’s something to smile about.

Talk to your Corporate Account Manager or visit po4i.com to find out more. Together, we make it happen. today or v sit po4i.com to find out more.

Post Office Money® Mortgages are provided by Bank of Ireland (UK) plc. Post Office Limited is an appointed representative of Bank of Ireland (UK) plc which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Bank of Ireland UK is a trading name of Bank of Ireland (UK) plc which is registered in England &Wales (No. 7022885). Bow Bells House, 1 Bread Street, London, EC4M 9BE. Post Office Limited is registered in England and Wales. Registered Number: 2154540. Registered Office: Finsbury Dials, 20 Finsbury Street, London, EC2Y 9AQ. Post Office Money® and the Post Office Money® logo are registered trademarks of Post Office Limited. F0359 MA091 12475180710A F0359 MA092 12476180716

Editor’s Foreword Sara Healey Marketing Consultant

Contents

TenetLime Support 4-5 Industry Update Simon Broadley gives us an Industry Overview 6-7 Five things you need to know about the Insurance Distribution Directive (IDD) If you play a part in

4

Hello and welcome to Limelight: In this issue of Limelight we are pleased to introduce a new feature called ‘Know your lender’. ‘Know your lender’ is an opportunity for participating lenders to highlight their propositions, unique selling points, criteria, rates and special offers; all to help you best service your clients. In this first focused section, five lenders highlight their expertise within the mortgage market and how they can support Tenet advisers throughout the customer journey – see pages 18 – 23 . We also have our regular industry overview from Simon Broadley, Managing Director of TenetLime. Simon’s update covers key industry initiatives touching on the Insurance Distribution Directive (IDD), Mortgage Market Study and Retirement Interest-Only Mortgages and leads nicely into our headline article giving you all the information you need to know about the IDD. Take a look at pages 5, 6-7 . We have also produced a webinar on the IDD which you can view. See the events section for more on this. Our popular marketing toolkit can help you grow your business this autumn. We have a wide range of posters, leaflets, adverts and social media posts – designed to let you pick and choose what you want ‘off the shelf’ already compliance approved and ready to bespoke with your name and logo. Why not visit the extranet to view the range, but in the first instance have a read of page 12 . Market Watch concentrates on the Retirement Interest-Only Mortgages with Sam and Gavin having researched the market for you and keen to assist you with identifying products that meet your older clients’ needs, in addition to placing trickier mortgage cases. See the full article on page 13 . Finally, we talk to Jonathan Hydes, Head of Marketing and Communications to find out more about what makes Jonathan tick, both in the world of work and home, with our Up close and personal feature. So enjoy reading this issue and please do let us know if you think we can improve the magazine in any way. Best wishes Sara J Healey Marketing Consultant

putting insurance in the hands of a consumer, the IDD is of relevance to you

10

Up close and personal

with Jonathan Hydes, Head of Marketing and Communications

6

13

Market Watch

Provider Support 15 Halifax

A matter of interest

26

AIG Let’s change the conversation on critical illness Scottish Widows Revolution or Evolution Royal London Is it time for fairer access to protection?

26

30

32

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Editor: Sara Healey

LIMELIGHT is a Tenet Group publication 5 Lister Hill, Horsforth, Leeds LS18 5AZ. Tel 0113 239 0011 Fax 0113 239 5322

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.

WELCOME - 3

Industry OVERVIEW

Simon Broadley Managing Director, TenetLime Ltd

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In a summer that will no doubt stay in our memories for years to come for football almost coming home and having some actual summer weather, we also seem to have enjoyed a bit of a respite from the usual pace of regulatory change. A few months down the line from GDPR implementation, a large reduction in related calls to our compliance helpdesk would seem to suggest a growing level of confidence with the requirements. The ICO has stated they’re looking for ‘dedication rather than perfection’ so as long as you evidence the progress you have made and formalise a plan for completing what remains to be done then you are in a good position. I couldn’t go without mentioning our recent win at the Money Marketing Awards 2018, where we have now taken the title of ‘Best Network’ for two years running and three times in the last four years, which is a fantastic achievement and a clear indication that we continue to move the business in a positive direction, as well as a ringing endorsement of the quality our membership. A new string to our bow these past months have been our ‘Complete Mortgage Events’ across the country, visiting Leeds, London and Birmingham. These were organised to assist you with staying up to date with current regulation, best practice and the latest products and services from our provider partners and have proved very popular, so thank you to everyone who supported them - they are on the plan to be repeated again next year.

So, what’s been happening within the industry and what’s on the horizon? Insurance Distribution Directive The Insurance Distribution Directive (IDD) - essentially MiFID2 for insurance! – is coming into play on 1st October 2018. It aims to create a level playing field across all participants selling insurance products to ensure consistent standards, increased transparency and consumer protection and to promote competition within the market. Applying to all businesses involved in the insurance supply chain, it will impact sales of pure protection, general insurance, investment bonds and other insurance based investment products (IPIDs), including online distribution, such as via a website or product comparison sites. Essentially it will have minimal impact on firms’ day-to-day operations but the broad scope makes small changes in a number of areas. Based on your feedback on our GDPR support, we’ve provided upfront a plain English guide and checklist, an FAQ document and hosted a webinar that you can now watch on demand. Anyone distributing insurance products will have to log at least 15 hours’ of continuing professional development (CPD) per year post-October and for our advisers, the change here is that now 15 hours have to be identifiably insurance-related and that this requirement extends to all staff involved in the sale of insurance, including arrangers, paraplanners and claims handlers. The good news is that focus:progress had an update in Spring and now has an IDD section to log related CPD, so it’s a great solution in the post-IDD world. Further to our CPD survey, we’ll also be arranging for the provision of additional licenses for those staff who need to log CPD from 1st October. See page 6 for more details about what is changing, plus all our support is in the IDD section of the compliance area on the extranet.

Mortgage Market Study The Mortgage Market Study has been a key topic at the last three AMI board meetings I have attended, causing some quite heated debate! As a board, we are approaching this in two ways – firstly, a lot of the FCA’s analysis focuses on pricing and we continue to have reservations and concerns over the methodology and underlying data that was used to establish, for example, the fact that 30% of consumers could have found a cheaper mortgage deal with the same key features. Secondly, we are looking to actively participate in a series of FCA-led workshops and meetings on remedies that will work in practice e.g. earlier sight of product qualification criteria and the broker comparison tool. There is a lot of strong feeling within the industry regarding the report’s findings and these are discussions that are going to continue for some time - rest assured however that we will continue to challenge where we believe any proposed changes are disproportionate to the concerns raised by the study. A number of providers are starting to come to market with these products since I last wrote. Hodge and our latest partner, Vernon for Intermediaries, have launched retirement interest-only (RIO) mortgages and they offer clients an alternative to a lifetime mortgage, or a long-term option for interest-only borrowers facing shortfalls. RIO mortgages sit alongside interest-only and equity release products therefore and become another tool for you to work with. Equity release still offers a solution for many later-life borrowers, but a lot of income-earning older borrowers want access to borrowing on normal terms and not to have their age go against them. RIO mortgages can also help interest-only borrowers who need extra time to repay their mortgage balance, or who want to use the sale of their home – on either death or a move into long-term care – to repay their balance. With 1.67m interest-only mortgages outstanding in the UK, this is a potentially huge market! ‘Retirement Interest-Only Mortgages’

As ever, we are here to support you through all elements of regulatory change and to lobby for the best outcomes for advisers into the future.

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Five things you need to know about the Insurance Distribution Directive (IDD)

1. What is the IDD? The IDD replaces the Insurance Mediation Directive (IMD) and comes into effect from 1st October 2018. It aims to: > Create a level playing field across all participants selling insurance products and ensure consistent prudential standards for intermediaries > Raise conduct standards, increasing transparency and fairness, enhancing consumer protection and promoting competition. 2. Who does it affect? The IDD applies to all businesses involved in the insurance supply chain. This includes intermediary firms, product manufacturers and online distribution, such as via a website or other media like price and product comparison sites. In short, if you play a part in putting insurance in the hands of a consumer, the IDD is of relevance to you. 3. What does it mean for my business? In the UK, the standards of insurance distribution tend to exceed those on the continent. In regulatory language the UK is “super equivalent”. What this means is that UK insurance businesses, both manufacturers and intermediaries, have less to do to achieve compliance with the new higher standards than some of our European colleagues. As a result, the impact in the UK is not as significant but there are small changes in a number of areas that firms will need to address. For example, a new rule is being introduced requiring that all products offered must be consistent with the customer’s demands and needs. This should of course be happening already but the new rules mean that prior to the conclusion of a life policy, the adviser needs

to specify, on the basis of the information obtained from the client, the demands and needs of that client. In effect you need to ensure that the demands and needs statement or financial report is personalised to the client’s specific needs. A generic statement of demands and needs without some matching of an individual customer’s needs to the product offered is not sufficient. The FCA, however, do not expect non-advised sales to go beyond the customer’s high-level demands and needs. So whilst the new provision is fairly similar to current requirements, the IDD firms up the regulator’s approach to the process. Firms which provide a personal recommendation i.e. advise, are required to provide a personal explanation as to why the proposed product would best meet the client’s needs and this should also lead to any unmet needs being highlighted. Again, we would expect firms to be doing this already as part of good practice. Don’t worry however, as we’ll signpost all relevant changes for you and because its implementation was delayed from February this year, you may have actioned some of these already. 4. How does it affect my CPD requirement? The IDD brings in a requirement for 15 hours of continuing professional development for anyone distributing insurance products – which means that whether you advise, arrange, paraplan or help manage claims or complaints in connection with insurance, you need to complete 15 hours of CPD a year. This does not have to be structured although that counts too, but it does have to be relevant to the role being performed and to support competence in that role. Advisers are already used to fulfilling a 35 hour CPD minimum requirement, so you just need to ensure that 15 hours of the 35 is insurance focussed. However, this may well mean that additional people in your firm may now be required to log CPD who have not been required to before. We will be

facilitating this via current focus:progress CPD system and the recent survey we undertook will help us establish how many additional licenses firms require. The implementation date of 1st of October is obviously not going to align with many people’s CPD year, so the answer is to simply pro-rata the requirement for the remainder of the current CPD year from 1st October. If your CPD year starts 1st January therefore, you will have 3 months left of the CPD year when the requirement comes in, so you’d need to fit in three and ¾ hours of insurance-based CPD before the end of the year (and you may have already completed some relevant hours earlier in the year that you can log). 5. What’s happening with disclosure and remuneration? These are really linked together, on the basis that where you operate a remuneration model that includes an incentive arrangement which rewards, at least in part, volumes of sales of insurance products, then the existence of this arrangement needs to be disclosed to the client. We communicated the updated initial disclosure templates with appropriate wording last year, with a view to the original implementation date of February 2018 - if you haven’t already done so, you will need to make minor updates to your initial disclosure documents in terms of your non-investment insurance services and submit a copy to the Compliance Helpdesk before 1st October 2018. From a remuneration perspective, you must disclose the nature and the basis (fee, commission or combination etc.) of remuneration received under an insurance contract and this is applicable to all customers, not just commercial. All firms must disclose fees payable by a customer in cash terms or if it’s not possible for an amount to be given, you must give a basis for the fee calculation.

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“If you play a part in putting insurance in the hands of a consumer, the IDD is of relevance to you”

All of our IDD-related support is stored within a dedicated area of the Compliance Support section of the extranet, so please keep an eye on this in the run up to October. So far, we’ve hosted a dedicated webinar, which you can watch on demand, plus sent out a comprehensive IDD guide and checklist, which we hope you have found useful.

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TENET EVENTS Non-Investment Roadshows With autumn fast approaching we are gearing up and planning for the second round of our popular Non-Investment Roadshows. These events cover topics such as Mortgage, Protection and General Insurance and combine formal presentations from Lenders, interactive round tables and plenty of tips to help you provide the best service for your clients. Starting in Durham on the 16th October, our Roadshows are free and open to all advisers, staff, paraplanners and directors/principals - so book yourself a space now.

DATE

LOCATION

VENUE

Durham

16/10/2018 17/10/2018 18/10/2018 30/10/2018 01/11/2018 06/11/2018 07/11/2018 13/11/2018 14/11/2018

Ramside Hall

Leeds

Village Leeds South

Manchester (Merseyside)

Haydock Park Racecourse

Belfast

Stormont Hotel The Westerwood

Cumbernauld

Exeter London

Sandy Park Conference Centre

Millennium Hotel London Knightsbridge

Glamorgan Birmingham

The Vale Hotel Village Solihull

To book your place onto Roadshow Round Two just follow the link: http://events.tenetgroup.co.uk/roadshowtwo2018

Complete Mortgage Events and one of the lucky winners… This year we introduced a new event entitled ‘The Complete Mortgage Event’, which took place in June 2018, visiting three locations in England. These events were organised to assist advisers in maximising the potential in their business by writing a compliant and fully protected mortgage to safeguard clients throughout the lifetime of their mortgage. We also took a look at several areas to help advisers provide the complete mortgage proposition to clients including current regulation, best practice, ‘know your lender’ and protecting against eventualities. You will find more on ‘know your lender’ in this issue. These events were developed in response to feedback from advisers and we are pleased to announce that they were a complete success, with very positive feedback from attending advisers. There was also a prize up for grabs at each event. Here are some of the comments we received:

“Great event, very knowledgeable and useful. Would be interested to attend another. Good 20 minute snapshot presentations with slides. Very useful to quickly know their USPs. Lovely Tenet Staff, always friendly & polite.”

“Excellent meeting with good content and venue.”

“Great event. Good spread of alternative lenders with space and time to talk against the hussle of the umpteen many expos around. Great idea of Tenet desk - keep it going.”

“Very good meeting. Informative, precise. Best part was towards the end with compliance questions

We also add our congratulations to Mark Newman from Platinum Property Finance based in Worcester, who was the prize draw winner at the Birmingham Complete Mortgage Event. Mark is pictured here with his gift card and some fizz that he also won during the day.

- good advice to stay compliant on cases.”

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Adviser Forum 2018 We’re delighted to invite all advisers and support staff to our Adviser Forum, which will be held at the Queens Hotel, Leeds, on Thursday 6th December.

Webinars – Watch live or on-demand Plus you get 30 minutes of CPD for each one you view! Registration will be open from 9.00am, with breakout sessions (optional) commencing at 9.45am. Our ever-popular Business Trade Fair will also be open from 9.00am with networking opportunities for you to take advantage of during the morning and over lunch. The main event starts at 12.30pm, with a business update from Tenet’s Chief Executive, Martin Greenwood, followed by main stage sessions and keynote speakers with the business element concluding at 5.30pm. Our formal gala dinner will start at 7.30pm. To book your place at the event just follow the link: https://events.tenetgroup.co.uk/adviserforum2018 At our Annual Adviser Forum we will take a closer look at what’s on the horizon and, with support from our provider, fund manager and lender partners, we’ll provide invaluable insight, sales tips and that all-important CPD. We will also have an evening to remember, where you can enjoy an evening of food, drink and entertainment. The event is open to all Tenet advisers, paraplanners and support staff and is completely free of charge to attend including the gala dinner. (The gala dinner is optional to attend).

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 what is available. All you need is a device to view it on and your headphones! Available to watch on-demand Tenet Webinar – View our Insurance Distribution Directive (IDD) webinar The Insurance Distribution Directive (IDD) - essentially MiFID2 for insurance! – is coming into effect on 1st October 2018. It aims to create a level playing field across all participants selling insurance products to ensure consistent standards, increased transparency and consumer protection and to promote competition within the market. In brief, we believe that the IDD will have minimal impact on firms’ day-to-day operations, but the broad scope makes small changes in a number of areas. To outline these changes, we have hosted an IDD webinar, presented by our Group Risk and Regulatory Director, Caroline Bradley. Webinar details: Use this link to view - webinars.tenetgroup.co.uk/idd BOOK YOUR PLACE TODAY

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

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UP CLOSE & Personal

Under the spotlight in this issue is our Head of Marketing and Communications, Jonathan Hydes…

Can you give us a brief history of your career to date? I’ve been in financial services all my working life, with 19 years being at Bradford & Bingley (which used to be the UK’s largest IFA), and I’ve been at Tenet for over 8 years. The majority of that time has been in marketing roles.

What do you enjoy most about your role at Tenet? Being able to make a positive difference. With marketing there is always an end product, whether it’s producing a new brochure or website, or seeing a campaign bear fruits. One of the things I’ve loved the most is providing a marketing service to members. We have a unique offering where advisers can access a wide range of marketing materials such as brochures, leaflets and sales aids without any cost. It always makes me smile when we receive positive feedback after an adviser has used the service, or when I present the service to an adviser and see their reaction. One new principal said ‘it’s brilliant – it’s like being a kid in a sweetshop’ when he saw the wide range of support available. There is an article about the marketing toolkit in this magazine, so please have a read and get in touch if you want to make the most of the service available to you. What are your hobbies and interests outside the office? Nothing makes me happier than spending time with my kids and seeing them smile. Simple things like playing with Lego, board games or Mario Kart on the Wii – it’s the quality time that makes the difference, not spending money. I have two children; a 15 year old boy and 9 year old girl. Right now we are counting down the days to our summer holiday in Turkey so there is a real sense of excitement in the house. We went to Turkey for the first time 9 years ago, and we’ve been back 9 times since, 8 times to the same hotel. We love the 5 star all-inclusive experience – happy kids and parents. We’re going to Lara Beach this year, but the hotel we’ve been to the most is Sentido Perissia in Side. Look it up on Facebook if you want an idea for your next holiday. What music do you listen to in the car? Depends if my daughter is in the car! If she is then it’s usually Ariana Grande, Little Mix or some of the latest music from the charts. If I’m alone then I’ve usually got it on shuffle, with the likes of the Killers and Dire Straits appearing the most at the moment. That said, I listen to Radio 2 a lot on my hour’s drive to and from work, although the recent addition of Jo Whiley to drive time has resulted in more time with the Apple music shuffle or Talksport. Drive Time has been ruined!

JONATHAN HYDES … Head of Marketing and Communications,

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What’s the biggest lesson you’ve learnt in life? Life is precious so enjoy it each day. I have had a difficult few years, losing loved ones and also being in some scrapes myself, including being at the Manchester Arena bomb attack where my daughter and I were very close to the scene of the attack – a few more seconds and we would have been there. It’s all too easy to get caught up in day to day worries (something I do frequently), but we all need to try and enjoy life as much as possible. Also, there is a quote that resonates with me: ‘Making one person smile can change the world. Maybe not the whole world, but their world’. Going back to mental health, if we all made more effort to show people that we love them and make them smile, the world would be a much happier place and we could genuinely save lives. Who can you make smile right now by paying them a compliment or telling them you love them? Go on, do it – you may just make their day. And finally, tell us an interesting fact about yourself… I make great Yorkshire puddings and toad in the hole, and I also get a lot of requests for my lasagne. I wouldn’t say I’m a particularly good cook, but I have some signature dishes. I’m happy to share my Yorkshire pudding recipe – drop me an email when you’re requesting materials from our marketing service. All part of the service!

What is the last book you read? ‘Reasons To Stay Alive’ by Matt Haig. The current focus on mental health is much needed, and this book, which is about the author’s experiences of living with depression almost to the point of killing himself and then living to tell the tale to help others, could give sufferers strength and perhaps even save lives. If you suffer with depression or anxiety, or you have a loved one that does, I recommend you read it. I particularly resonated with the chapter where he just lists celebrities who also suffer. What’s your favourite film of all time? I’ve always loved James Bond films, and I think Casino Royale is probably my favourite. I grew up in the Roger Moore era so he was my favourite, but I think Daniel Craig is the best ever bond and I’ll be gutted when he stops after the next movie. Contentious statement I know when you bring Sean Connery into the equation, but Daniel Craig brought a real rawness to the role. Another favourite film at the moment is The Greatest Showman. I went with my daughter to see it at the cinema three times, and I think we’ve now seen it as many times at home. I’m not a fan of musicals, but this movie is brilliant and it’s really uplifting. That said, as I’ve re-read this answer I’ve just booked to go to see the Mamma Mia sequel - maybe I am a fan of musicals after all! If you could trade places with anyone for the day who would it be and why? Donald Trump. I think that would be an incredibly insightful day seeing what goes on behind the scenes of the world’s most powerful (and crazy!) man, and I would put the power to more use than he does by making a positive difference to a lot of lives across the world. I’d also love to know what he does with his hair – I study it every time I see him on the TV and I just can’t work it out!

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Boost your business this autumn by visiting our Marketing Toolkit area of the extranet… Pick from our range of support leaflets, brochures, posters and adverts covering a wide range of themes, which are ready to use straight away… Grow your Business with help from Tenet…

A key benefit is that we streamline compliance processes by pre-approving most of the marketing support that’s available to make it quick and easy for you to use. We’ll also add your logo and contact details for you. Most of the support is available without charge (you just cover the cost of printing the materials or the cost of placing an advert as relevant), but we do also have a website and newsletter service which is provided by external suppliers which do carry a cost, albeit at a discounted rate.

Don’t forget to take advantage of our range of social media posts and adverts… The content has been designed for Facebook, Twitter and LinkedIn, and is designed to work alongside advert images which have been produced as jpeg images. In many cases it is necessary to include the relevant advert image to make the post compliant (as it carries any necessary risk warnings) but there are also some posts which can be posted with or without an advert. These posts are all designed to be added on your own social media page as a free way of promoting your business,

alongside other posts of a non-promotional nature.

How to utilise the marketing support You can see all the existing support by visiting the Extranet, clicking on ‘grow your business’ on the top menu bar and then going into the Marketing Toolkit. Alternatively, simply put ‘marketing toolkit’ into the extranet search box.

If you need any help, call 0113 2390011 and ask to speak to the Marketing Team or email marketing@tenetgroup.co.uk

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MARKET WATCH with TENETLIME’s Research & Technical Specialists

Samantha Gray

Gavin Watson

After a turbulent 12 to 18 months with changes coming from all directions, the regulator seems to be taking it easy for a while! So for this quarter’s Market Watch we are going to focus on the kind of enquiries we have been receiving on the helpdesk and how we have helped Tenet members place those trickier mortgage cases. A common theme seems to be the older borrowers coming to the end of their interest only terms and the fear of them becoming mortgage prisoners, or worse, be forced to sell their home. Hodge & Shawbrook have come up with an innovative solution for these customers by way of their 55+ products. These are interest only mortgages written to age 95 and 85 respectively. They are designed for older borrowers who need more breathing space than they may be offered on the high street. The beauty of these products is that they are not equity release, so you do not need any further qualifications and the customer still retains full control of their property. The natural successor to these are the Retirement Interest Only Mortgages which are slowly coming into the market. As Tenet advisers, you have access to Vernon Building Society and Hodge who offer these products, with more planned for the market later in the year. They are very similar to the 55+ although they have no defined end date and I’m sure these will evolve further over the coming months. We are also seeing many more calls from advisers whose clients have had credit issues in the past. It’s always worth checking what their overall score is on their credit files, as if their score is sufficient they may actually be able to use a high street lender. We usually recommend in the first instance to try one of the high

street lenders who only does a soft search at DIP. If this doesn’t work it’s always worth looking at the mortgage research tables at some of the smaller building societies before progressing the more specialist lender route. Limited company buy to lets and portfolio landlords are also still common questions. Not helped by the fact the lenders often define portfolio landlords differently. On the up side, as these changes have been in place for a while, the lenders do seem to be understanding the underwriting better and generally streamlining their processes more. We do endeavour to keep the research tables as up to date as possible and you can find all the relevant information in the Buy to Let section. Finally the joint borrower sole proprietor proposition is attracting more interest than ever. This is where there can be multiple applicants on the mortgage application, but only one on the deeds. This helps avoid the excess stamp duty levy if one of the borrowers already owns a property. This is popular with parents looking to help a child onto the housing ladder or even the other way round with a child supporting their

parents. Further information on lenders who will consider this can be found in the Specialist/ Other area of the research section of the extranet.

As always we are happy to take any feedback or suggestions for new areas within the mortgage research tables. We do try our best to keep them up to date but if you spot any errors please let us know.

Give us a call on 0113 2395111 or email mortgage@tenetgroup.co.uk. You can look at the mortgage research tables at https://www.tenetgroup.co.uk/extranet/563.html

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In this Limelight issue we welcome to the stage the top five RI’s and AR’s in each category ranked via the figures from April to June this year. We would like to say a huge well done to each and every firm and adviser who made it in to the top five, raise a glass to yourselves and we hope to see some of you taking home that ‘Adviser of the Year 2018’ award when the time comes...

Registered Individuals

1 st 2 nd 3 rd 4 th 5 th 1 st 2 nd 3 rd 4 th 5 th 1 st 2 nd 3 rd 4 th 5 th 1 st 2 nd 3 rd 4 th 5 th 1 st 2 nd 3 rd 4 th 5 th 1 st 2 nd 3 rd 4 th 5 th

Christopher Peter Naismith Alan Edward Johnston

C N Mortgages City Gate Aberdeen Ltd Options Mortgage Centre Just Mortgages Watson & Company (Bristol) Ltd Intelligence Mortgage Solutions Ltd Intelligence Mortgage Solutions Ltd Larkbridge Mortgages Ltd McNicholl Financial Services Ltd C N Mortgages

Top Mortgage Adviser (by number of cases)

Richard Tingey Nigel Heckman Mark Daniel Watson Chantal Christmas Alexander Adams Andrew Stephen Lock

Top Protection Adviser (by gross receipts)

James Alexander McNicholl Christopher Peter Naismith Daniel Burgess Lukas Danso Heinrich-Amenu Bilal Awan Jeremy Greene Benjamin Blades Duncan Lawrence Hodgson Lorraine Morrison Christopher Peter Naismith Malcolm Smith Kylie Dawn Arnold

Protect Line Ltd Protect Line Ltd Enduralife Ltd Protect Line Ltd Protect Line Ltd

Top Protection Arranger (by gross receipts)

Purely Financial Planning Ltd Moneywise Mortgages Ltd C N Mortgages Moneywise Mortgages Ltd Fidenti Mortgages & Protection Ltd

Top GI adviser (by gross receipts)

Appointed Representative

Enduralife Ltd Protect Line Ltd Options Mortgage Centre KT Partnership Ltd Larkbridge Mortgages Ltd

Top Large AR (5 and above) by average gross receipts per adviser

C N Mortgages Hampden Financial Services Ltd PS Morris Financial Purely Financial Planning Ltd McNicholl Financial Services Ltd

Top Small AR (4 and below) by average gross receipts per adviser

14 - TENETLIME SUPPORT

A matter of interest You understand the importance of interest rates, but how do you explain them to your clients?

As intermediaries you operate in a world of mortgage interest rates. They are familiar to you and their relationship to the Bank of England Base Rate (BBR) is one you understand. To people who don’t work in the industry, let alone those who have never taken out a mortgage before, rates of interest can be complicated and far from the most exciting aspect of buying a first home. Part of the value you can add as a mortgage adviser is to help your first time buyer clients to, firstly, understand mortgage rates and secondly, to have a broad understanding of the relationship between the BBR and mortgage pay rates. The effect of speculation Just a hint of an interest rate rise can drive consumer behaviour, influence lender pricing and move financial markets. You may have experienced this – for example, more of your clients may look to fix their rate when a base rate rise is expected, or alternatively a boost in remortgage activity during periods of regular rate movement. There hasn’t been much of that in recent years, with November seeing the first rate rise in a decade. It’s no coincidence that as a result of that move; remortgaging has since been very popular, with the latest figures showing double digit year on year rises. This is partly because the fear of rising rates is often stronger than the fear of missing out on a cheaper variable deal - in what behavioural economists call ‘loss aversion’. This psychology of economics can shape the market but what really matters to your clients is their own finances and what suits them best. However, many will still ask you

Here’s a few ways you can keep things simple for your clients:

What they should consider Remind your clients that regardless of wider interest rates they should look at their own financial circumstances to help determine the best type of rate for them. If they have no wiggle room in their budget and they can lock into an affordable rate it could be a wise move – but of course you can help them reach a decision. It’s also worth explaining the risks of choosing a fixed rate, including what happens in the long term and their circumstances change. Borrowers may not have considered the costs of Early Repayment Charges and rely on you to give them the pros and costs of each type of rate, both now and if their circumstances change. What will happen next? Your clients will probably ask you what is going to happen next with interest rates, and you can’t give them a definitive answer. If you do not have professional experience, you should not rely on the information contained in this communication. If you are a professional and you reproduce any part of the information contained in this communication, to be used with or to advise retail clients, you must ensure it conforms to the Financial Conduct Authority’s advising and selling rules. Halifax is a division of Bank of Scotland plc. Registered in Scotland No. SC327000. Registered Office: The Mound, Edinburgh EH1 1YZ. Bank of Scotland plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 169628. Information correct at May 2018. For the use of mortgage intermediaries and other professionals only

Put the Bank Base Rate in context You could give them a short overview of the BBR, including the fact that the Monetary Policy Committee’s main aim is to keep inflation close to the government’s 2% target - it’s currently 2.5%. Positive economic statistics - including wage growth figures published in April, suggest a rise could be on the cards soon. The Bank of England has repeatedly said as much in recent months, noting in February that rates may have to rise earlier and by more than they thought at their last review in November but emphasising that any rises would be gradual and limited. Never known high rates Remember many of your first time buyer clients have come of age during a period of unprecedented low rates and may be totally unaware of just how high rates can go. If they are not aware already, you could tell them about the 14% rates seen in the late eighties, or explain that since the Bank’s inception three centuries ago, short-term interest rates have averaged around 4.5%. It’s useful if they can understand that the deep cuts to rates during the global financial crisis were intended to stimulate the economy but they won’t necessarily stay this low. What affects mortgage rates? You could also give a broad explanation of how the BBR affects lenders’ Standard Variable Rates, as well as trackers, and how fixed rates are impacted by swap rates. This can feel like complicated stuff for some first time buyers, so if they don’t want complex information then it’s important not to overload them. As you already know, the BBR is just one of the factors that affect mortgage rates, albeit an important one. This is why, even if there’s a quarter point rise in interest rates, it doesn’t necessarily mean an equivalent rise in mortgage rates – apart from on base rate trackers of course. According to UK Finance (formerly the CML) mortgage pricing is affected by an individual lender’s cost of borrowing funds from savers, banks and wholesale market investors, the level of riskiness of their lending, the cost of holding the required level of capital and their lending targets.

which is the ‘best mortgage’ right now. Giving your clients a broad understanding of how mortgage rates work, can help them feel empowered about choosing the best deal for their needs.

PROVIDER SUPPORT - 15

44% of these people plan to retire earlier

Pension freedom ‘demob fever’ as 1 in 5 over 50s change retirement plans

29% plan to work

part-time in retirement

Increased awareness The increased awareness around pension flexibility has certainly made people sit up and rethink their retirement, with a significant number changing their plans as a result. Official data shows most pensions are now accessed before state pension age, which demonstrates what a game changer the pension freedoms have been. The regulator has recognised the need to alert people to the fact that your 55th birthday should not necessarily be a starting signal to begin accessing your pension. Whatever decisions people make on the back of flexibility around their pension choices, a critical first step will be to consult a professional financial adviser. An adviser will be best equipped to ensure that pension freedom ‘demob fever’ won’t cause problems further into retirement. In its recent Retirement Outcomes Review final report 3 , The FCA has proposed to mandate that pension companies include clear, prominent and specific risk warnings in ‘wake-up’ packs that accessing the pension may not be in the best interests of the customer at this stage.

New research 1 by Retirement Advantage has found that 1 in 5 (20%) over 50s have changed their retirement plans because of the pension freedoms, driven by the ability to access all of their pension savings from the age of 55. The behaviour could be described as ‘demob fever’ as official stats 2 show most (72%) consumers who access their pots did so before the age of 65.

28% plan to retire later

To read the report visit www.retirementadvantage.com/ adviser/support/reports

Changing plans Of the 1 in 5 who have changed their plans, 44% are planning to bring forward their retirement and retire early (21% said by between 1 and 3 years and a further 23% are planning to retire at least 4 years earlier). However, 28% of respondents said they are now planning to retire later (13% by between 1 and 3 years later, while 16% said by at least 4 years). Nearly a third (29%) of people changing their plans are looking to work part-time in retirement. The data shows a marked difference between men and women who have changed their plans. While 41% of women over 50 anticipate working part-time in retirement, only 20% of men plan to do so. Meanwhile men expect to retire one year earlier on average, while women do not envisage retiring earlier on average.

Andrew Tully Pensions Technical Director Retirement Advantage

1. Source: The data in this release is from Retirement Advantage’s annual Retirement Sentiment Index and is based on Censuswide polling conducted online between 06/03/2018 and 09/03/2018, surveying 1,003 UK adults aged 50 and over who are not retired and have a defined contribution or individual pension in place and are involved in financial decisions. 2. Source: FCA data shows that most pensions are accessed before age 65, either through being fully withdrawn or entering drawdown. Between April 2015 and September 2017, over 1.5 million DC pensions have been accessed, with most (72%) doing so before age 65. Over half (55%) were fully withdrawn and were mostly small pension pots (88% below £30,000). Nearly all those who fully withdrew had other sources of retirement income. FCA Retirement Outcomes Review Final Report (June 2018) page 4 https://www.fca.org.uk/publication/market-studies/ms16-1-3.pdf 3. Source: FCA Retirement Outcomes Review: proposed changes to our rules and guidance CP18/17, page 46 chapter 4.38 https://www.fca.org.uk/publication/consultation/cp18-17.pdf#page=4

PROVIDER SUPPORT - 17

Page 19 Shawbrook Bank Page 20 Together Page 21 The West Brom for intermediaries Page 22 Post Office Money

Page 23 Precise Mortgages

18 - KNOW YOUR LENDER

Know your lender

Life is complicated. Mortgages don’t have to be.

Since we founded Shawbrook Bank in 2011, we’ve been building our business by supporting yours. Our business is lending, and most of our lending is done through intermediaries. That’s particularly true in the mortgage market, where the majority of our products are available only through brokers like you. That’s why we go out of our way to support you with innovative products, together with a flexible, responsive, ‘can-do’ attitude. We specialise in making the complex simple, and in helping customers who wouldn’t necessarily get help from the high street. So, we’ve developed an innovative range of second charge mortgage products that allow you, as a broker, to support a wider range of borrowers.

Prime Second Charge Mortgage Range We want you to feel comfortable recommending a Shawbrook second charge mortgage. This is why our product range offers a host of benefits specifically with your customers in mind.

n Rates from 3.40% + base rate n No lender fees on some products n No early repayment charges

n Free and unlimited overpayments If you have any questions or want to discuss a deal, our friendly team are just a phone call away.

Get in touch - Mortgage Desk, call: 0330 123 4527 • Email rm.sales@shawbrook.co.uk

THIS ADVERTORIAL IS FOR INTERMEDIARY USE ONLY AND MUST NOT BE SHOWN TO POTENTIAL CLIENTS

KNOW YOUR LENDER - 19

Operating nationwide, Together has been providing finance to customers under-served by the mainstream lenders for over 40 years. They’re focused on helping those customers whose circumstances fall outside the lending criteria of other lenders, and especially when there are multiple complicating factors in play. With the boom in self-employment and the average first-time buyer closer to retirement age than ever, an increasing number of cases are being unfairly categorised as ‘complicated’. So when further factors are introduced – like less-than-perfect credit, an unusual purchase (e.g. Right to Buy), or a property constructed of non-standard materials – these clients may find themselves in need of an alternative provider. This is where Together specialises, with a 2 year fixed residential mortgage product starting at just 3.59%. Other product options

available include variable, 5 year and 2 year fixed, and both interest-only and capital repayment. They offer free standard valuations and no lender legal fees. Every case is underwritten by a person, so the decision to lend isn’t made based on credit scores or computer algorithms alone – but with common sense woven in too. By getting to know the person behind the application, they’ll look for a way to lend when others won’t. Their wide range of products include first- and second-charge residential mortgages. A dedicated telephone-based team is available to answer practical questions about the suitability of clients, while Business Development Managers spend their days on the road, visiting brokers to help them make the most of Together’s products. Their bespoke online portal, My Broker Venue, is an easy way to get a decision in principle, and can be used to upload and store supporting documents throughout the process.

www.togethermoney.com • www.mybrokervenue.com • Call: 0333 455 2775

20 - KNOW YOUR LENDER

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