Selected issue 8 - winter 2019

A Tenet Group Publication

Issue 8 Winter 2019

SPECIAL FEATURES Top tips for responding to the

OTHER FEATURES Industry Update - A view from Royal London

TENET COMMUNITY The toughest challenge –

FCA on DB transfers Meet the Regulatory Consultants climbing Kilimanjaro! Neil Flint, Principal of Alexandra’s Financial Management Ltd shares his recent challenge. Looking to expand your business in the New Year? - we can help The R tiremen Account Complete flexibility for you and your clients

Canada Life has greatly improved the investment options within our flagship pension solution, The Retirement Account, to give your clients the pension freedom they deserve. Built with extensive input from financial advisers, The Retirement Account allows clients to consolidate their pensions, make regular contributions, and seamlessly move into pension drawdown or access guaranteed income when the time is right.

We have listened to what advisers have been telling us, and this update to The Retirement Account is a statement of our ambition to become the market leading provider in the pension and retirement planning market. On top of our existing unique capability, allowing customers to blend drawdown with a guaranteed income, we have greatly expanded the fund range and added much improved digital capability. We recognise this market is constantly evolving and to stay ahead we have a dedicated team working to continually enhance the product, seeking continuous feedback from the adviser community. Sean Christian, MD and Executive Director at Canada Life

You’re in control with The Retirement Account

For more information call 0800 912 9945 or visit canadalife.co.uk/adviser

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

Telephone calls may be recorded for training and quality monitoring purposes. MGM Advantage Life Limited, trading as Canada Life, is a subsidiary of The Canada Life Group (U.K.) Limited. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England and Wales. Registered no. 08395855. Registered office: 6th Floor, 110 Cannon Street, London EC4N 6EU.

Get to grips with your clients’ changing retirement journeys

The Retirement Account enables complete flexibility for you and your client. Built with extensive input from financial advisers, it offers: • Optional guaranteed income that you’re free to adjust for your client with the benefits of flexi-access drawdown • A broad choice of investments, flexible enough to deal with changing objectives • Three distinct fund ranges, each with specific purposes • A competitive and simple charging structure, with no charges for switching • A focus on strong governance

You can also phase tax free cash withdrawals automatically, alongside any amount of taxable income your clients need, for complete flexibility to adapt as they go through life.

You’re in control with The Retirement Account

For more information call 0800 912 9945 or visit canadalife.co.uk/adviser

Telephone calls may be recorded for training and quality monitoring purposes. MGM Advantage Life Limited, trading as Canada Life, is a subsidiary of The Canada Life Group (U.K.) Limited. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England and Wales. Registered no. 08395855. Registered office: 6th Floor, 110 Cannon Street, London EC4N 6EU.

A Tenet Group Publication

Issue 8 Winter 2019

SPECIAL FEATURES Top tips for responding to the

OTHER FEATURES Industry Update - A view from Royal London

TENET COMMUNITY The toughest challenge –

FCA on DB transfers Meet the Regulatory Consultants climbing Kilimanjaro! Neil Flint, Principal of Alexandra’s Financial Management Ltd shares his recent challenge. Looking to expand your business in the New Year? - we can help

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

WELCOME – 3

Editor’s Foreword

CONTENTS… what’s in this issue

4 Top tips for responding to the FCA on DB Transfers Patrick O’Leary, Policy Manager, offers tips and guidance on how to respond to the recent letters from the FCA.

Here is your Autumn issue of selected This issue opens with an article from Patrick O’Leary, Policy Manager, on DB transfers and how to deal with the recent letters the FCA are sending out, providing top tips on how to respond to the FCA on DB transfers. You can read his article on page 4 and 5. Also in this edition Meet the Regulatory Consultants – our frontline support for directly authorised firms. They are only a phone call away and are a dedicated resource to deliver proactive compliance consultancy services. Read more about the services they offer and meet the team on pages 6&7. Protection is set to feature heavily in 2020 as an area where more can be done to help you generate sales and for protection to become a cornerstone to every advice interaction across Tenet. This issue sees the start of this focus. See page 10. If you are looking to expand your business in 2020 we can help. At Tenet, we have a dedicated recruitment consultant providing a very competitively priced professional service for TenetSelect clients. We can take the hassle and cost of recruiting professional advisers and support staff. You can read more on this on page 12. A first in selected, this edition includes an industry update from Royal London and we also have our regular events update setting the scene for 2020 with a range of new events coming to a location near you. A must for your CPD requirements. Supplement enclosed with this issue With this edition we are including ‘Fund Spotlight’. This publication provides a dedicated medium for fund managers to showcase their products and services to ensure you are up to date with all the latest news and information in the fund management sector. I hope you find selected informative and useful and as always let me know if you want me to include anything else in future issues. You can email me: katie.nutter@tenetgroup.co.uk With best wishes for a merry Christmas and peaceful, productive and happy New Year.

6

6 Meet the Team Meet our Regulatory Consultants

8 2020 is just around the corner… Make a date in your diary for upcoming events and kick start your CPD

10

10 Change the conversation C reating a focus on protection

12 Industry Update

A view from Royal London

14 Are you looking to

expand your business in the New Year? Let us help you take the hassle and cost out of recruiting.

18

PROVIDER SUPPORT 15 - 40 Latest News and Products

25

Best wishes Katie Nutter Marketing Consultant

WINNER

WINNER BestNetwork

BESTNETWORK

Contacts

Editor Katie Nutter

Published quarterly by Tenet Group Limited 5 Lister Hill, Horsforth, Leeds, LS18 5AZ

selected Magazine is for internal purposes only and is not intended as an advertisement. As a result this should not be issued in any form to clients. Not all the products in this feature are the responsibility of the Tenet Group Limited. Terms and Conditions. Although every effort has been made to ensure the accuracy of the information contained in this publication, The Tenet Group cannot accept responsibility for any errors it may contain. The Tenet Group cannot be held responsible for the loss or damage of any material, solicited or unsolicited. No reproduction of any part of this publication, in any form or by any means, without prior written consent from The Tenet Group. The views expressed in this publication do not necessarily reflect those of the advertisers or the publishers.

Tel 0113 239 0011 Fax 0113 239 5322

selected - a Tenet Group publication­

4 – SPECIAL FEATURE

TOP TIPS for responding to the FCA on DB transfers

A number of directly authorised firms (1,600, reportedly) are receiving the current round of FCA letters, setting out the FCA’s feedback and requirements following their review of the data those firms supplied last year. In this article, we provide our tips on how to deal with those FCA letters.

Patrick O’Leary Tenet Policy Manager

The format for the letters is heavily templated/standardised but don’t be misled by that - within the templated format the FCA highlights specific issues it has identified with the data supplied by the firm. The letters set out which aspects of the firm’s data that the FCA believes gives cause for concern under one or more of the following headings:

● Unauthorised introducers ● Transfers per pension transfer specialist ● Expensive solutions

● Volume of transfers ● Conversion rate ● Insistent client(s) ● Income from DB business

In the examples we’ve seen, the most common issues identified were: ● Conversion rate - where the FCA believes that the proportion of those cases recommended to transfer is high given its position that it is unlikely to be suitable in most cases ● Expensive solutions - where transfers were made to arrangements whose charges are higher than stakeholder pension charges ● Volume of transfers - e.g. where the FCA is concerned that doing a low volume of transfers might make it difficult to keep technical knowledge up to date. If you receive one of these letters, it is vital to read it carefully and recognise that it is asking you (typically) to reply within five business days, acknowledging receipt and enclosing/attaching a copy of your PI policy details and then within one month: ● Carry out itemised actions; and ● Write again to the FCA, providing a high level summary of the outcome to the FCA

SPECIAL FEATURE – 5

OUR TIPS WHEN DEALING WITH THE LETTERS WOULD BE:

Make sure your responses are on time and show clearly that you are taking the matter seriously.

It might be that your review does not identify any deficiencies. If that’s the case, put that in your record

1

7

Read each action point carefully - you are asked to carry out some specific actions.

2

When sending your second letter to the FCA, take great care to show that you have gone through each action point

8

In particular, note where you have been asked to review items such as your suitability assessment processes or the competence of your PTS during the period covered by the data supplied to the FCA (2015 to 2018).

3

Keep the FCA summary high level (they suggest no more than one page of A4 per ‘heading’ (Conversion Rate etc)

9

10

Consider whether the data you supplied might have given an overly negative impression. For example, many firms did not have records of a significant number of enquiries that did not proceed to advice because the consumer was deterred by triage. Firms are getting better at recording triage cases now - not least so that they can reassure the FCA and PI insurers - but it may be that you can reassure the FCA that you under-reported enquiries deterred by triage and only a small proportion of enquiries proceeded to advice. You might also be satisfied that a transfer is more likely to be appropriate for consumers who were not deterred by your triage processes.

Use the FCA’s action-point numbering

Make it clear that you have carried out the required review(s) and what the high level outcomes were, highlighting any errors or issues with the data or your client base etc that you feel might have given an inaccurately negative impression.

4

11

State whether your review identified any deficiencies

12

If you do identify any deficiencies, you’ll need to explain how you intend to deal with them but - crucially - consult with your PI insurer and take professional advice first.

Carry out the required review(s) and keep a record of it/them - this must be separate from the high level summary you then send to the FCA.

13

5

Make sure that your record of your past processes etc is guided by the FCA’s action points in the letter and that it refers to the FCA handbook provisions at COBS 19.1 and COBS 9; and also the updates, guidance etc available here: https://www.fca. org.uk/firms/defined-benefit-pension-transfers

6

increase in the firm’s capital resources requirements, which must be in place at all times. In addition, bear in mind that the FCA could suggest that the appropriate level of capital resources for your firm, as required by the Threshold Conditions in the FCA Handbook (COND 2.4), is greater than the minimum level specified in the Prudential Standards part of the handbook (IPRU-INV 13).

The letters raise the possibility of removing/limiting DB transfer permissions. This requires careful thought - read the relevant guidance in the FCA letter before deciding and take advice. PI premiums might well not reduce on ceasing to advise on pension transfers where the PI insurer continues cover for past advice. If your PI cover excludes DB transfer advice that was provided in the past (or is currently being carried out), that triggers a significant

LOOKING FOR FURTHER HELP AND SUPPORT? If you have received a letter from the FCA and would like some advice, please get in touch with your Account Manager.

6 – SPECIAL FEATURE

Meet our Regulatory Consultants

Our Regulatory Consultants’ primary responsibilities are to provide compliance consultancy services to directly authorised firms. This includes identifying existing risks, relevant emerging risks and regulatory change and potential trends. Our added value is delivering a proactive, coherent service, enabling firms and individuals to understand the resulting requirements and their individual responsibilities. This allows them to embed relevant compliance, systems and controls, policies and to ensure compliance and conduct standards are embedded, and risks are mitigated. Their main role is to conduct audits of solo regulated firms, typically independent financial advisers (IFAs), mortgage and protection and protection only firms recommending bespoke solutions tailored to the specific business type(s) of the firm. A selection of services that they offer are: •  Compliance audits - working with you as part of your team, providing support and clarity to ensure that you have appropriate systems and controls in place to run your business both effectively and compliantly. Additional support is also available to help you implement changes following industry and regulatory updates, such as recent legislative changes i.e. MIFIDII, IDD, GDPR and the SM&CR regime. • Training competence & certification regime - Training and competence support will be delivered in house by your Regulatory Consultant who will work with you to design a support solution tailored to meet your needs. We can oversee the supervisory process allowing you more time to focus on your clients’ needs. Your firm will benefit from outsourcing the necessary KPI reviews, file reviews, CPD assessments, training needs analysis as well as skills and knowledge assessment.

SPECIAL FEATURE – 7

Let’s introduce you to the members of the team…

Ron Skinner Team Manager & Regulatory Consultant

Doug Bernard Regulatory Consultant

Joined Tenet: Area covered:

May 2011

Joined Tenet: Area covered:

January 2009

Midlands Previous experience: Ron is a highly experienced compliance professional with 40 years within financial services. His past experience involves being Training & Competence Manager for both a major insurer and building society, working in compliance oversight for a large network and has provided compliance services within his own business. Subsequently, he has been involved in thematic reviews and audit visits with various past regulators. “I recognise that each firm’s needs are different, and this is appreciated when bespoke and tailored recommendations are made as a result for each business.”

South East Previous experience: Doug has a breadth of compliance experience operating within solo regulated firms as a result of 35 years in financial services, commencing his career with the Prudential. He subsequently moved to Abbey National/ Santander as a pensions and investment adviser and then regional compliance manager. In January 2009 he joined Tenet as a Regional Compliance Consultant and has created and maintained effective relationships with Tenet clients delivering their services. “I like to work with firms to build relationships which enables candid discussions to take place. In turn, this allows clear feedback to be provided and where relevant, dissipated to all levels of staff.”

Colin Evans Regulatory Consultant

Sarah Keyse Regulatory Consultant

Joined Tenet: Area covered:

January 2017

Joined Tenet: Area covered:

June 2006

North Previous experience: Colin has over 30 years’ experience of the Financial Services market. Having previously been a Broker Development Consultant before moving into providing personal advice direct to clients as an IFA for over 20 years within multi- adviser practices. Colin also has experience of organising and supervising a large paraplanning team. “I believe compliance should and can work successfully within any firm to help it grow and succeed, rather than it be a barrier to be overcome.”

South Previous experience: Sarah started her career in financial services in 1983 as a mortgage underwriter. She spent time with a mortgage brokerage firm, a life company and a network before joining the Tenet Group. Sarah has chosen to specialise in the support of directly authorised firms and has relished the opportunity to research and understand all the changes constantly taking place in the regulatory arena. “I understand completely that every firm and its needs are different and subsequently I can tailor my support to suit you.”

Get in touch with your local Regulatory Consultant

For more information on what services we offer or for compliance support and advice, contact your local Regulatory Consultant using the contact details opposite.

Ron Skinner (Midlands)

07979 340 927

Colin Evans 07884 459 150 Doug Bernard (South East) 07900 820 089 Sarah Keyse (South) 07855 256 584 (North)

8 – EVENTS FOCUS

1) INVEST – ROUND ONE These events will focus on investments and pensions. They are designed to meet advisers’ development needs and provide a valuable insight into the current markets. They will offer a variety of important information from a wide range of provider partners, Tenet’s Senior Management and Tenet Adviser Training. Target Audience: Investment & Pension advisers Approximate Timings: 9.00am arrival 9.30am start – 3.00pm finish CPD: Approx. 3hrs 30 minutes structured and 30 minutes unstructured The programme for 2020 has been designed to incorporate your feedback from 2019. The main events are now split into three strands; Invest, Protect and Lend. This enables you to focus your learning and development in specific business areas. Tenet will provide you with a full year of knowledge, support and development. We encourage you to attend as many events as possible, not only to satisfy your CPD requirements, but to keep your 2020 IS JUST AROUND THE CORNER… Make a date in your diary for upcoming events and kick start your CPD requirements

2) PROTECT – ROUND ONE These events will focus on the protection market. With Tenet and the industry’s focus in this area, they are designed to meet advisers’ development needs and provide a valuable insight into this market. All of the sessions at these events will offer IDD CPD, and are open to advisers, paraplanners and admin staff. Our Provider partners will also look at other ways you can obtain further IDD CPD. Target Audience: Protection advisers across all brands Timings: 9.00am arrival 9.30am start – 3.00pm finish CPD: Approx. 3 hours IDD CPD To book your place on Protect Round One visit: https://events.tenetgroup.co.uk/Protectone2020 Date Location Venue 04/02/2020 Manchester Tankersley Manor 06/02/2020 Birmingham Village Solihull 11/02/2020 Exeter Sandy Park Conference Centre 12/02/2020 Southampton Hilton at the Ageas Bowl (Stadium) 25/02/2020 Maidstone Hilton Maidstone 26/02/2020 London Amba Hotel 03/03/2020 Cumbernauld Doubletree by Hilton Glasgow Westerwood Hotel & Golf Resort 04/03/2020 Durham Ramside Hall Hotel & Golf Club 05/03/2020 Leeds Crowne Plaza Leeds 10/03/2020 Belfast Stormont Hotel 17/03/2020 Bristol Village Bristol 18/03/2020 Glamorgan The Vale 19/03/2020 Nottingham Doubletree by Hilton Nottingham Gateway Haydock Racecourse 05/02/2020 Sheffield awareness, comprehension and understanding of industry changes and developments at the highest level. It is also a chance to network with your colleagues, product providers and Tenet staff, plus you get 3-4 hours of CPD awarded at each event. All events are free of charge and your support staff can attend too, so don’t miss out – book your place(s) today and secure your CPD requirements!

To book your place on Invest Round One visit: https://events.tenetgroup.co.uk/Investone2020 Date Location Venue 10/03/2020 Manchester

Haydock Racecourse

11/03/2020 Gloucester Stonehouse Court 12/03/2020 Birmingham Village Solihull 17/03/2020 Exeter Sandy Park Conference Centre 18/03/2020 Southampton Hilton at the Ageas Bowl (Stadium) 24/03/2020 Maidstone Hilton Maidstone 25/03/2020 London Amba Hotel 31/03/2020 Cumbernauld Doubletree by Hilton Glasgow Westerwood Hotel & Golf Resort 01/04/2020 Durham Ramside Hall Hotel & Golf Club 02/04/2020 Leeds Crowne Plaza Leeds 21/04/2020 Glamorgan The Vale 22/04/2020 Nottingham Doubletree by Hilton Nottingham Gateway 23/04/2020 Sheffield Tankersley Manor 28/04/2020 Belfast Stormont Hotel

EVENTS FOCUS – 9

3) LEND – ROUND ONE These events will focus on mortgages and lending. They are designed to meet advisers’ development needs and provide a valuable insight into the growing lending market. The events will include a combination of round tables along with exhibition stands, where you will meet a wide variety of niche and high-street lenders, packagers and other providers who can help you develop further business opportunities. Target Audience: Mortgage advisers

Date Venue 21/04/2020 Birmingham Village Solihull 22/04/2020 Bristol Village Bristol 23/04/2020 London Amba Hotel 29/04/2020 Belfast Stormont Hotel 05/05/2020 Exeter Sandy Park Conference Centre 06/05/2020 Southampton Hilton at the Ageas Bowl (Stadium) 12/05/2020 Durham Ramside Hall Hotel & Golf Club 13/05/2020 Leeds Crowne Plaza Leeds 14/05/2020 Manchester Haydock Racecourse Location

Timings: 9.00am arrival 9.30am start – 3.00pm finish CPD: Approx. 3hrs 30 minutes structured and 30 minutes unstructured

To book your place on Lend – Round One visit: https://events.tenetgroup.co.uk/Lendone2020

FINALLY, DON’T FORGET OUR CPD WEBINARS WITH 30 MINUTES OF CPD FOR EACH WEBINAR YOU VIEW! Throughout 2019, Tenet have hosted a series of CPD webinars which are available to view at a time to suit you. So if you need to top up your CPD, take a look at the webinars that are still available. All you need is a device to view it on and your headphones! For all the available webinars and to watch on-demand, visit the links detailed below, or you can access them all at: https://events.tenetgroup.co.uk/ADP2019 Date Webinar Link to view 01/03/2019 Virgin Money http://webinars.tenetgroup.co.uk/ webinar-1-2019 29/03/2019 Nat West Intermediary Solutions http://webinars.tenetgroup.co.uk/ webinar-2-2019 31/05/2019 Post Office for Intermediaries http://webinars.tenetgroup.co.uk/ webinar-3-2019 28/06/2019 Shawbrook Bank http://webinars.tenetgroup.co.uk/ webinar-4-2019 27/09/2019 Together Money http://webinars.tenetgroup.co.uk/ webinar-5-2019 25/10/2019 The Exeter http://webinars.tenetgroup.co.uk/ webinar-6-2019 29/11/2019 Precise Money http://webinars.tenetgroup.co.uk/ webinar-7-2019

WEBINARS FOR 2020 Starting in February, Tenet will host 10 webinars on the morning of the last Friday of every month with a single Provider, Fund Manager or Lender which you can view from the comfort of your home or office. You will have the opportunity to view the webinar and interact with the speakers, asking any questions you may have. To help plan your diary for the year ahead, we would recommend booking these at the start of the year. Date Webinar 28/02/2020 Webinar One 27/03/2020 Webinar Two 24/04/2020 Webinar Three 29/05/2020 Webinar Four 26/06/2020 Webinar Five 31/07/2020 Webinar Six 28/08/2020 Webinar Seven 25/09/2020 Webinar Eight 30/10/2020 Webinar Nine 27/11/2020 Webinar Ten To book for the 2020 Webinars visit: https://events.tenetgroup.co.uk/TenetCPDWebinars2020

10 – PROTECTION SPECIAL

80% of people in the UK

have no Income Protection, and almost half have no life insurance

PROTECTION SPECIAL – 11

Why is protection so crucial to have in place? If a client were to lose their job or become unwell, how would they manage their financial commitments and maintain a reasonable standard of living? Sounds a sensible question, but with so many clients not seeing the importance of arranging protection, they leave themselves vulnerable should the unexpected happen. One reason clients don’t purchase protection (alongside their mortgage or investment) is because they believe that they can buy protection online for less than proposed by their adviser. While sometimes cheaper, such cover is typically less comprehensive, and the client risks having a plan that doesn’t cover their needs should they need to claim. Overcoming client objections is key to help them realise the importance of protecting themselves and their families. Key in this is discussing protection at the outset of a financial conversation. This not only highlights the necessity of protection early on in the journey, but also gives the client more time to consider its worth. Leaving it as a last minute add on to the product, e.g. a mortgage or an investment, at the end of the process risks it being deprioritised amongst all the other considerations that need to be considered in making key decisions about their money. Although some clients think ‘It’ll never happen to me’, illnesses and accidents can happen to anybody. No matter how secure they think their lifestyle is. For instance, could your clients live off £94.25 a week, for up to 28 weeks from statutory sick pay? Highlighting this to clients and assessing if they would have sufficient savings in place to meet bill payments can help them realise why income protection should be considered. Therefore, your clients are able to continue with their regular financial commitments. How do you change the conversation?

When clients take more than one product such as income protection or life insurance the “life time value” increases. So, in the short term, although it may take more time up front, ultimately your business is more valuable and your clients are protected should the worst happen. To help you further, we have negotiated good commission rates as part of the protection and GI panels. And crucially with our panel, you are not restricted and we have non-loaded rates unlike some networks. This gives you every opportunity to source the most suitable product for your client. What are the next steps? Recently we reviewed our protection and home insurance offering and are close to signing off an enhanced approach that we will implement across the adviser network. Tenet want to assist advisers increase the number of protection conversations they have with their mortgage clients, as this will ultimately help all parties involved benefit for all the right reasons. We will be working with our top-protection providers as well, utilising their tools, training materials and knowledge in the market place to enhance our offering to our advisers.

We are looking to relaunch our offering via the following: • Tool kits and related marketing brochureware • Greater Technical Services & Research support • Improved extranet guidance and rate sheets • Training (induction and more) – education on the client benefits and efficient processes • Member feedback to help shape the proposition further • Dedicated protection events

What are the commercial benefits of protection?

Watch this space!

Not only does protection benefit the client, but you the adviser, can significantly gain from making protection sales to your clients. On average, our member firms make around £500 per typical protection sale.

12 – INDUSTRY UPDATE

INDUSTRY UPDATE – 13

HOT TOPICS - Royal London comments on the very latest industry developments…

FRC UK Stewardship Code 2020 The Financial Reporting Council (FRC) has re-booted its 2012 Code with what it sees as an important development in driving stewardship improvements across the UK investment industry. The new Code comes into effect on 1 January and remains voluntary but raises the bar in setting a standard much higher than the current UK regulatory requirements. ‘Stewardship’ is the responsible allocation, management and oversight of capital to create long term value for clients whilst leading to sustainable benefits for the economy, environment and society. The 2020 Code contains 12 ‘apply and explain’ Principles for asset owners and managers. Signatories will be expected to take ESG (environmental, social and governance) factors into account in their investment decision making as well as undertaking more rigorous reporting on their stewardship activity. It’s likely that this will establish a clear benchmark for stewardship and that can only be a good thing for the industry at a time when there is an increasing focus on responsible investing.

FCA Retirement Outcomes Review The Regulator published policy statement PS19/1 at the end of January 2019, looking at how they plan to tackle some of the issues they’ve identified in the retirement market. Phase 1 of this Retirement Outcomes Review was introduced on 1 November 2019, with further phases following in 2020. All pension providers must now send customers a new age-based pack at age 50, then every five years until they’ve accessed all their pension savings. These packs are designed to show your clients the value of their savings and any features their pension may have that could affect the decisions they make in the future. This presents an excellent opportunity to engage with clients who receive the new packs. Further phases of the review will follow in 2020. From an adviser perspective, you will be required to consider available pathway investment solutions when assessing suitability for clients investing their drawdown funds. There’ll certainly be a lot of noise about this over the coming months.

PROD Despite being implemented at the beginning of 2018, there remains a huge amount of confusion and discussion around the FCA’s product governance (PROD) rules and guidance. We know that manufacturers (providers and asset managers) have to define the target market for their products. We also know that distributors (advisers and platforms) also have to define their own target market for the products they distribute based on what they receive from the manufacturer and their own client information. PROD 3.3.12 takes this further and explains that these should be identified at an extremely granular level. This naturally leads to discussions around identifying segments for your clients and probably sub-segments as well. That could be segments based on financial life stages or by occupation. It could even be by investment experience or capacity for loss. The essential point here is that there is no hard rule within PROD about how you go about segmenting your client bank. It should be about your clients and their needs and that should help you deliver tailored advice, products and services across your client bank.

Ryan Medlock Senior Business Development Manager

14 – SPECIAL FOCUS

Are you looking to expand your business in the New Year? WE CAN HELP.

candidates to your specifications, recommending the ones which fit your needs. But, the thing that makes this service stand out from using a recruiter is our fees. We only charge a fee of 6% plus VAT of the basic salary per person recruited (subject to minimum charge of £1,350 plus VAT), payable upon appointment. This is a huge saving compared to regular standard recruitment agency costs (usually around 20%), as well as freeing up your time so that you can concentrate on giving advice to your clients. For self-employed positions, we charge slightly differently on a flat fee basis. For an investment adviser the cost is £2,400 +VAT and for non-investment £1,800 +VAT. Which is still a huge saving on a standard recruiters fees.

January can be a great time for taking new advisers and support staff into your business as people consider their New Year’s resolutions and start making positive changes to their development and careers. If you’re looking to expand your business, let us help you take the hassle and cost out of recruiting. We’ll advise you on the best way to get the people you need and organise a strategy to do that from writing role profiles, advertising and proactive headhunting to vetting candidates on your behalf. What does the service include? We’ll help you define and develop an attractive recruitment proposition to draw the right calibre of people to your business. We’ll also arrange for the role to be advertised and will screen the best

PROVIDER SUPPORT – 15

REDUCING RISK IN RETIREMENT

These are uncharted waters for the financial advice industry. Risks are high – in fact, almost three quarters of advisers say they are higher now than they were five years ago. Only 2% say risks are lower. One third (32%) of advisers have considered selling their business due to the risks.*

What are the key risks for clients? Just as clear are the risks for clients in retirement, risks heightened by factors including the decline of the final salary pension scheme. These risks change over time. When accumulating a pension pot the risks are mainly confined to under funding and/or poor investment choice but at retirement the risks increase significantly. So what are the key risks? • Selecting an unsuitable retirement product • The sustainability of the income being taken • Living beyond the average mortality age • Prolonged low or negative investment growth • Sequencing risk (making income withdrawals when markets are falling). One way to counter these risks is of course to annuitise. Annuitising doesn’t eliminate all risks Even annuitising the pension doesn’t necessarily get rid of all the risks, which include: • The risk of locking into a low rate and low income • The risk of locking into a product that can’t be changed even when personal circumstances may change significantly • The risk of overpaying for inflation proofing which could be achieved through investment growth • The risk of purchasing too early - higher

Is there a solution dealing with all these issues?

income can be achieved at older ages, particularly when health becomes a factor - Purchasing an annuity can be deferred and bought in tranches when deemed better value (rates improve and/or health deteriorates)

The Retirement Account from Canada Life is unique in offering a true blend of guaranteed income and drawdown within one personal pension wrapper. It offers a wide choice of investment solutions, with the ability to adapt as your clients’ investment needs and objectives change over time.

The risks in drawdown can be managed or mitigated to some extent.

How does The Retirement Account help with risk?

• Sequencing risk is potentially the most damaging in producing a bad outcome • Running out of funds prematurely can be managed by ensuring withdrawals are kept at a relatively low level, or are regularly monitored • Living beyond the average mortality age should be a cause of celebration but in financial terms this can be result in an unexpected depletion of funds - purchasing a deferred or fixed term annuity may help manage this scenario • Seeing a prolonged downturn across global stock markets is less likely than seeing one in individual markets such as the FTSE, so having a global portfolio can help mitigate this particular risk • It is possible to protect capital by using protected funds that lock in gains but when stock markets are volatile the fund manager charges can be prohibitive • Protected funds can smooth out gains and losses in the same way as with-profits funds and are popular as they take out the roller coaster type experience most investors dislike

The Retirement Account can help reduce risk is through its access to a range of risk-targeted managed funds. These are designed (as the name suggests) to ensure their long term suitability for the client’s risk profile. Unlike risk-profiled funds, risk-target managed funds are managed to strict asset allocation guidelines, set by independent industry recognised investment specialists. *Source: Survey conducted using Survey Monkey in June 2019 among 185 advisers. Telephone calls may be recorded for training and quality monitoring purposes. MGM Advantage Life Limited, trading as Canada Life, is a subsidiary of The Canada Life Group (U.K.) Limited. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England and Wales. Registered no. 08395855. Registered office: 6th Floor, 110 Cannon Street, London EC4N 6EU.

How to get in touch To find out more about The Retirement Account visit www.canadalife.co.uk/adviser/retirementaccount or call 0800 912 9945.

18 – PROVIDER SUPPORT

Steve Bryan Director of Distribution and Sales

Cover for real people from a specialist income protection provider

Creating an income protection policy that’s right for your clients and right on the money is our speciality. We won’t generalise about your clients and their differing needs and wouldn’t dream of designing protection products with a one size fits all attitude. That’s not our style. We are real people designing income protection solutions for real people. We live and breathe protection At The Exeter, our people are protection experts and our ambition is to make protection accessible and inclusive for as many people as possible. Different solutions for different people We take time to understand our customers and use our in-depth knowledge to design products which offer quality cover with flexible benefits. This makes it easy to create a policy to fit your clients’ needs and pockets and means we can protect a wide number of people including: • Manual workers and skilled tradespeople We provide occupation-neutral cover for manual workers and skilled tradespeople with a wide choice of limited claim periods (2 and 5 years) and waiting periods and no standard policy exclusions. • Executive cover We offer specialist cover for office-based professionals and clerical workers. This provides quality cover at a low cost with two premium options; age-costed or level guaranteed. • Self-employed people Our products include a variety of features that can offer reassurance to self-employed people including: cover from day one, continuous cover for up to 3 months between jobs and the option to ‘fix’ benefits to provide certainty for clients with fluctuating incomes. • People with health issues We offer a flexible approach to underwriting with one of the most flexible and fair approaches to people with a high BMI or Type 2 Diabetes.

For more information on our specialist income protection designed for real people, why not organise a webinar or meeting with The Exeter sales team on 0300 123 3207 or email us at sales@the-exeter.com

PROVIDER SUPPORT – 19

The growing shift towards personalisation is driving a tech evolution

Standard Life examines how innovation in technology is helping advisers and investment managers to expand their investment offering and bring more personalisation to more clients. It was the American academic Joseph Wood Krutch who said: ‘technology made large populations possible; large populations now make technology indispensable’. For a man born in 1893, it’s unlikely that he was talking specifically about the advent of platform technology or the impact of regulation such as RDR, MiFID, pension freedoms and most recently, PROD. However, the fact remains that more and more clients require financial planning and investment management for longer. Technology has to be the enabler that will help each client get the outcome they want and need.

Centralisation helps to deliver consistent outcomes for clients, minimise potential risks and improve operational efficiencies within adviser firms to ultimately deliver the increased scalability they need. However, recent regulation has shone a spotlight on client suitability and the accusation of ‘shoe horning’ has reared its head. To be clear, well run and well managed CIPs are excellent solutions for a large number of clients. Nevertheless, a client may have needs that don’t fit within an adviser’s chosen CIP. In other industries, such as retail and telecoms, many clients have come to expect a service tailored to their specific needs, so the opportunity must be there to offer clients a similar investment management service. The rise in personalised investing styles The growth in the popularity of personalised investing styles, such as goals-based investing and ESG-type investments has already had an effect on the dynamics around how clients engage with their portfolios. Some clients are looking beyond measuring the success of their investments in purely

monetary terms and seek investment approaches that take environmental, global sustainability and governance issues into consideration. Thematic investing offers huge potential for advisers who can build a narrative around investment propositions and provide these clients with an investing approach that helps them advance the causes or goals they care about. Moreover, some clients require personalised solutions for professional reasons - such as being unable to hold certain assets due to a conflict of interest. Clients may also have existing assets that they can’t or don’t want to sell. And most clients want to actively manage the amount of tax they pay. However, providing a tailored investment solution and outcome for each client that considers all these areas can be costly and time consuming. Technology is helping the industry change Just as prophesised by Joseph Wood Krutch, technology has to help us service larger populations. As the demand for advice and personalised outcomes increases, your time will become an even greater commodity. Advisers and investment managers will need to be able to depend on a platform partner that is scalable and supports the growth in their business today so they have the time to focus on what matters, but also a platform partner that is preparing for the demands of the future through developments in the technology. Could the next platform technology release be as exciting as the newest smartphone launch? Perhaps. Whatever the future looks like, the changes in technology will enable more clients to benefit from much needed advice.

CIPs offer an excellent solution for many clients

One of the big shifts since RDR has been the advent of centralised investment propositions (CIPs) and in recent years, platforms have developed technology to support managed portfolio solutions.

To find out more about Standard Life Wrap visit www.adviserzone.com

The value of investments can go down as well as up, and could be worth less than originally invested. The views expressed in this blog should not be regarded as financial advice.

22 – PROVIDER SUPPORT

Ben Constable- Maxwell Director of Corporate Finance

John William Olsen

Manager M&G Global Select Fund and M&G Pan European Select Fund

and Stewardship at M&G Investments

Investing for impact: profit with purpose

Measuring impact It is of course harder to measure environmental or societal returns than financial returns, but this is not to say

Aiming higher Investing for impact is nothing new. Many institutional investors, like pension funds, already target non-financial goals with some of the investments they make to meet their liabilities. It is becoming easier for individual investors to follow suit. Embracing companies’ relationship with society and the environment creates a new strategic lens through which investors can evaluate the prospects – and ultimately the success – of investments. By looking at the bigger picture, beyond traditional metrics of success, we believe investors can aim higher. The value of the fund’s assets will go down as well as up. This will cause the value of your investment to fall as well as rise and you may get back less than you originally invested. For more information, please visit mandg.co.uk/adviser/positive- impact-fund For financial advisers only. Not for onward distribution. No other persons should rely on any information contained within. This financial promotion is issued by M&G Securities Limited which is authorised and regulated by the Financial Conduct Authority in the UK and provides ISAs and other investment products. The company’s registered office is 10 Fenchurch Avenue, London EC3M 5AG. Registered in England and Wales. Registered Number 90776.

How can we aim to achieve a positive social and environmental impact with our long-term investments? There is a spectrum of approaches to responsible investing, from excluding companies that fail certain criteria, through full integration of environmental, social and governance (ESG) factors in the investment process, and up to strategies that target specific sustainability-oriented themes such as renewable energy. If non-financial goals are as important to you as financial returns, you can explicitly target investments that also deliver positive change for society or the environment. This is generally referred to as impact investing. Pragmatism, not idealism Like any approach to responsible investing, investing for impact should not be confused with charity. The objectives of impact investing are financial, as well as to deliver shared returns for society or the environment. In our view, there can be compelling investment opportunities where companies deliver a positive impact on society. Many stand to profit from tailwinds where their businesses align with sustainability trends, such as growing demand for responsibly sourced goods. We believe it can therefore be a pragmatic choice, not an idealistic one, to help address environmental and social challenges by investing in companies that can demonstrate impact. This could be through pioneering products or services, by driving sustainability improvements in their sector or even by providing other companies with the tools to deliver impact.

we can’t. As with any metric of performance, we need a robust framework for gauging impact.

The UN Sustainable Development Goals, which set targets for addressing the world’s most pressing sustainability issues, can help investors in this respect. They can only take us so far – impact investors have to apply rigour in their own approach and analysis – but the Goals articulate common principles for an economic model that recognises the value of a clean environment and of an equitable and healthy global society. The positive impact of an investment can, generally speaking, be assessed by analysing how a company performs against any of these 17 Goals. For instance, a healthcare company could contribute towards Goal 3 – “ensuring healthy lives and promoting wellbeing for all” – if its medicines alleviate or prevent illness. The company’s positive impact in this sense would be defined by its reach and the effectiveness of its treatments. Impact investing is to some extent defined by the ability to measure an investment’s environmental or societal impact, but lack of disclosure by companies can hamper these efforts. This is a developing area and one of the roles investors can play is to encourage investee companies towards greater transparency in disclosing their impacts on society, both positive and negative.

PROVIDER SUPPORT – 23

CARE FUNDING NHS Continuing Healthcare & NHS funded nursing care Crucial to advising clients on their options for funding care, is understanding who is responsible for meeting any required care costs. In the first instance, advisers should establish whether the individual requiring care should actually be paying for it themselves.

strict assessment process (referred to above) in place to ascertain if those needing care meet the ‘eligibility criteria’. According to Laing and Buisson the number of older and physically disabled residents in care homes funded by the NHS is about 9%. The majority of older people in care require social care, so NHS CHC should always play a part in adviser considerations - if only to discount it as a means of funding. There are many sources of information about NHS CHC that potential clients can be referred to but a good starting point is the NHS information: https://www.nhs.uk/conditions/ social-care-and-support-guide/money-work- and-benefits/nhs-continuing-healthcare/ Are there any other options if not qualifying for NHS CHC? For many elderly people funding their own care, there are issues with cognitive ability and many will have powers of attorney granted to members of the family or others who can deal with everything on their behalf. If there are issues with cognitive impairment are they related to a diagnosis of dementia? There are many types of dementia and Alzheimer’s is the one that most people are aware of. Many of those, even some with severe forms of dementia, do not qualify or meet the criteria for NHS CHC. So is there any other possibility of their care being funded by the state for those who do not qualify for fully funded NHS CHC? NHS funded nursing care It may be that care in a ‘nursing home’ is required but the eligibility criteria for NHS CHC has not been met. In this case there may be entitlement to the payment for NHS Funded nursing care – sometimes referred to as the Registered Nursing Contribution (RNCC). NHS-funded nursing care is care provided by a registered nurse, paid for by the NHS, for people who live in a care home. People should receive NHS-funded nursing care if: • they live in a care home registered to provide nursing care, and

• they don’t qualify for NHS CHC but have been assessed as needing care from a registered nurse. The NHS will make a payment directly to the care home to fund care from registered nurses who are usually employed by the care home. Further consideration Under the Mental Health Act 1983 if you are compulsorily detained under section 3 i.e. you are “sectioned” as it is sometimes known, then after care services under section 117 (S117) must be provided free of charge, with no means testing. S117 aftercare means that if a patient needs to move from hospital to a care home, their care home fees must be paid for. To be admitted under section 3, their illness must cause them to pose a risk to their own health or safety, or that of others. This is a very complicated area and perhaps best left to mental health professionals. However a charity called Rethink Mental Illness have a good fact sheet about section 117 aftercare and is something that potential clients could be directed to on this subject. See: https://www.rethink.org/advice-and- information/rights-restrictions/mental-health- laws/section-117-aftercare/ For more information Call: 01737 233065 Email: ltc@wearejust.co.uk Or visit: justadviser.com

It’s also important to consider the possibility of whether the NHS should be funding this care through NHS Continuing Healthcare (NHS CHC). This can make a huge difference to the financial position of the individual in question. It may mean the NHS could cover the full cost of their care, potentially some £1,000 per week - or even substantially more. So what is NHS CHC? NHS CHC is a package of continuing care provided outside hospital. It’s arranged and funded solely by the NHS, for people with ongoing healthcare needs. It can be provided in any setting - including your client’s own home. Those that meet the criteria and qualify, are likely to have a complex medical condition requiring a lot of care and support. They’ll also need highly specialised nursing support and possibly be near the end of life, with a rapidly deteriorating condition. NHS CHC does not depend on a specific health condition or diagnosis. The first step is to have care needs assessed by a health or social care professional using a screening tool called the Checklist Tool. If this screening suggests eligibility for NHS CHC, a full up-to-date assessment of your client’s needs will be arranged, using a tool called the Decision Support Tool. The full assessment will be carried out by a multidisciplinary team. The assessment will include contributions from all the health and social care professionals involved, to build an overall picture of need. The multidisciplinary team will make a recommendation to the Clinical Commissioning Group (CCG) about eligibility for NHS continuing healthcare. In theory, NHS CHC should cover the cost of care for those whose ‘primary need’ for care relates to their health. This can be very confusing. Consider a family whose mum or dad needs care. It’s easy for the family to assume that this need for care is due to their mum’s or dad’s deteriorating health, otherwise they would not need to be in a care home! However, for many people requiring care, NHS CHC will not be granted. This is because of the

Lines are open Monday to Friday, 8.30am to 5.30pm

Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44

www.tenetgroup.co.uk

Made with FlippingBook - professional solution for displaying marketing and sales documents online