Best Practice ForumsNovember/ December

2013

Agenda for today….• Paradigm Compliance Update• Fidelity Post Financial Crises World• Skandia Rebate & Legacy issues for Platform

Business• Threedneedle Active Investing

Coffee Break

• J P Morgan The Only Market Update you will ever need

• Smith & Williamson Investment Trusts• Blackrock Getting Active about Passive• Paradigm Practical exercises looking at File

Keeping

Lunch

Graeme StewartCompliance Partner

You Told Us…. (Thank you)

• You wanted more Compliance and more practical Compliance

• You Loved the format• You Loved the RIP topics and Market Updates

• More than 1 in 3 gave 5/5 for quality and 5/5 for value• 165 attended (164 said they would come back)

Your CPD

• Short sharp bursts of CPD for you to follow up

• All material and slides you see today are on our Website

Compliance Update

• We have Changed• Post RDR T & C and file review standards• Post RDR risk / fund / portfolio switches• Post RDR audit and audit of on-going services• Brief Look at;

• Consumer Credit • Thematic Review Outcomes• UCIS• BRAW

• The 6 Killer Answers

The New Look Target

The New Look Website

Post RDR File Review Standards

Chapter 3 A New Fact Finds (more soft fact prompts)New File Review Standards

Chapter 7New T & C Key Performance Indicators (MI for your Business)

T & C Changes we have made to help youPre - RDR T&C KPI Benchmarks

• Provider Spread• Product Spread• NTU/ NPW• Persistency

Post – RDR T&C KPI Benchmarks

• Annual review / ongoing service• Model portfolio fund switching• Service propositions• WRAP• Adviser charging by facilitation

Post RDR T & C changes

Annual review / ongoing service• No more than X% (e.g. 5) of clients have not

responded to a fund switching request

Service propositions• No more than X% (e.g. 20) of clients have taken

proposition 1,2,3, etc. or transactional

Post RDR T & C changes

WRAP• No client with less than £50,000 to invest has been

placed into a WRAP with prior approvalAdviser charging by facilitation• No more than X% (e.g. 10) of cases have been

remuneration via product facilitation

Post RDR risk / fund / portfolio switchesChapter 6Appendix 15 – Risk Plan

Chapter 3Appendix 18 – Fund switching guidanceAppendix 19 – Portfolio switching guidance

Post RDR audit and audit of on-going servicesEnd of Year Review• We will Help you audit your on-going advice

proposition delivery(Chapter 6 appendix 16)

• RDR Audit kit Target August 2013

CPD Sources

• FT adviser, www.ftadviser.com; • adviser hub www.adviser-hub.co.uk • New Model Adviser Academy http://www.nmba.info/• Skills serve (Gavin Pilford 01202 306059)• ETF , VCT, EIS, BPR Ingenious/ Octopus Tax Efficient Review

– www.taxefficientreview.com• Investment Trusts ~ JP Morgan / www.winsresearch.co.uk• UCIS/ SCARPS ~ Paradigm Academy – www.futurevc.co.uk

Other Updates

• UCISNew chapter 3D

• Thematic Review Anti Money Laundering and Anti Bribery and Corruption Systems and Controls

New Guidance

• Consumer Credit LicenceAR firms will need to apply for interim permission which will then be cancelled (for no charge) when authorised firm has permissions

The 6 Killer Answers

1. Do your (and all adviser in practice) CPD records show that you are able, willing and demonstrable competent to advise on the 8 RIP’s, National Savings and Cash ISA investments?

The 6 Killer Answers

2. Do your Client files show to a third party unbiased and unrestricted research and discount the relevant RIP’s

The 6 Killer Answers

3. Does you firm have evidence of the training provided to advisers in the using you post RDR Disclosure Documents?

The 6 Killer Answers

4. Can your firm evidence how you deliver the on-going service each client has been promised?

The 6 Killer Answers

5. Did you adapt your client agreement following the guidance in Target?

The 6 Killer Answers

6. Are you ready for BRAW? (if completed BRAW, have you now fully debriefed)

Compliance Update

Thank You

We are here to help you

Have a great day …. See you a bit later

Best Practice ForumsNovember/ December

2013

The Green Pathway – Reminder

Main Reasons why files fail FCA expectations;

• Insufficient KYC Information (Hard and Soft Facts)• Product Fully Explained• Risk Attitude Discussed and Matched • Replacement Business

The Green Pathway – Reminder

Main Reasons why files fail FCA expectations;

• Insufficient KYC Information (Hard and Soft Facts)

Client objectives/ goals/ aims/ aspirations/ timeframes/ purpose of income required/ knowledge and experiences

….so that it is clear to a third party…..(a story please)

The Green Pathway – Reminder

Main Reasons why file fail FCA expectations;

• Product Fully Explained

How the client needs are met by how the product works ~ I have selected this product for you because…

The Green Pathway – Reminder

Main Reasons why file fail FCA expectations;

• Risk Attitude Discussed and Matched

What discussion took place around ATR/ Capacity for Loss/ did the client agree with the risk profile

outcome? And why

The Green Pathway – Reminder

What have we been doing to help you?

• Updated File Review Checklists• Updated Fact Finds in August 2013• Little exercise for you today

File Review; Best Practice

Practical Exercise: Daniels Case Study

Please take 10 minutes to read the Fact Find I am distributing

File Review; Best Practice

Good Points;

• Well Completed• Fully Completed• No gaps• No typos• Easy on the eye• Pretty good hard and soft facts

File Review; Best Practice

Bad points;

Insufficient details about client needs in order to make a recommendation…..

Look at the supplementary questionnaire……..

File Review; Best Practice

Do we have enough detail now to give advice?

Please review selection of Suitability Report

MetLife Presentation (Partner Forums, Sept 2013)

Lack of Information to demonstrate Suitability• Insufficient or incorrect disclosure documentation• Insufficient or missing client objectives• Insufficient evidence to show why TFC and / or Income is required• Insufficient evidence to show why the amount of TFC and / or income is required• Insufficient evidence to show how client ATR / CFL has been arrived at

File Review; Best Practice

PPOL (or A. N. Other electronic system)• Excellent to explain products (PPOL use appendices)• Excellent for laying out a letter• Poor for highlighting soft facts• Poor in generating specific reasons why• Poor at discounting options and other potentially

suitable products

Thank you for coming

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