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Description: Financial Planning Today magazine July-Aug 2016 - Launch Issue

Cover Price 6.00 The choice of the professional Financial Planner and Paraplanner July - August 2016 To boldly go Planning s future What Financial Planners think about the future of their profession See pages 28 to 32 for full survey The Client Hunter Chris Daems shares his client finding tips - 20 Exclusive Ex-Pensions Minister Baroness Altmann - 22 Investment News and DFM Directory A new guide for Financial Planners - 33 Trusted by millions. With billions. 100% secure savings and investments backed by HM Treasury Our range of products can form the foundation of a balanced portfolio Unique tax-free opportunities including Premium Bonds Some products can be held in a trust or in a SIPP or SSAS INSIDE THIS ISSUE The Client Hunter Chris Daems DipPFS offers insight into finding and keeping clients 20 To Boldly Go Financial Planners are remarkably positive about the long-term future of the profession 28 25 My Inside Business Diane Weitz on building her Financial Planning firm Finance firms take to the Olympic stadium 38 Welcome to Financial Planning Today Welcome to Financial Planning Today a brand new magazine for Financial Planners Paraplanners and Wealth Managers. We hope you enjoy this new professional publication which will provide content we hope will inform guide entertain and inspire readers. There s lots of read in this first issue and we hope you will pick up some valuable intelligence as you browse the content. Our Cover Feature (p30) looks at the Future of Financial Planning and is based on your views. Thanks to everyone who took part in our Reader Research. We ll be back in September but you can keep up with the latest news and developments by visiting Many of our stories advertisements and features have links to websites too if you want to find out more. Just click the links. We value your views so drop me a line at editor Kevin O Donnell Editor Financial Planning Today News report Brexit and Financial Planning ...........11 After the stunning EU referendum result which caught out most commentators and forecasters what impact will the UK s new relationship with the EU have for Financial Planners Lord editor Kevin O Donnell and more views and opinions from the sector. Professional bodies .............................14 News about the Personal Finance Society CII CISI APFA and events listings. Diane Weitz CFPTM of Ashlea Financial Planning tells us how her firm has flourished. Inside My Business Diane Weitz CFPTM Ashlea ................25 Cover feature Financial Planning s future ................28 Financial Planning Today s reader survey uncovered views on key topics affecting the sector and the future of Financial Planning. Insight And Analysis Planner s Case Book Pete Matthew CFPTM ..........................17 Pete Matthew CFPTM takes readers through a real life case involving a couple whose financial records were in quite a state when he first came to tackle it. Financial Planning Today s very own Client Hunter interviews Chris Daems about his top client finding tips and how he s retained his clients over the years Investment Investment Insider .............................33 Fund news launches fund manager moves and more about the investment sector. The Client Hunter ..............................20 DFM Directory ...................................35 A directory with key information for planners on DFMs with data from Defaqto. News & Comment News............................................... 5 6 8 All female Financial Planning firm begins Brexit peril for pension reforms FCA s new website cost revealed Opinion and editorial ........................22 Former Pensions Minister Ros Altmann writes about resigning as well as columns from Julie Diary ...................................................38 Finance staff take to the Olympic stadium for a race with a difference and a poker player speaks to planners about risk. July - August 2016 3 NOW S THE TIME FOR In today s uncertain world guaranteed solutions play a valuable part in your clients portfolios. For more intelligent investing isn t it time for a fresh look at our range of guaranteed Retirement and Investment solutions Discover more at certainty ENTER A MORE CERTAIN WORLD Products and services are offered by MetLife Europe d.a.c. which is an affiliate of MetLife Inc. and operates under the MetLife brand. MetLife Europe d.a.c. is a private company limited by shares and is registered in Ireland under company number 415123. Registered office at 20 on Hatch Lower Hatch Street Dublin 2 Ireland. UK branch office at One Canada Square Canary Wharf London E14 5AA. Branch registration number BR008866. MetLife Europe d.a.c. (trading as MetLife) is authorised by the Central Bank of Ireland and subject to limited regulation by the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA). Details about the extent of our regulation by the FCA and PRA are available from us on request. 2016 PNTS NEWS Ros Altman Mission creep fear over proposed NEST changes Claire Trott Pension changes may be heading for the Brexit door Brexit could be the death of the second hand annuity market and put other reforms to savings and pensions on ice experts say. The UK s future relationship with the EU is central to new Prime Minister Theresa May s Government. Set to swallow up vast amounts of time and resources there are fears that planned reforms in other areas such as pensions could be derailed. Claire Trott head of pensions technical at Talbot Muir told FP Today s sister publication Sipps Professional I feel that with the bigger issues we are currently facing there will be a period of rest before any Government can spend the time it needs to review what the impact of the pensions freedoms has been and make any further sweeping changes. See Claire s column here Brexit could also be the death of the second hand annuity market although this may never have got off the ground in the first place. It is such a short term and high risk market that it seems unlikely many would want to get involved in it in the first place. Again there are likely to be more pressing issues in April 2017. Steven Cameron pensions director at Aegon said We d urge the Government to give an early indication of its plans to take forward initiatives such as the Lifetime ISA and the secondary annuity market. Unless we get more detail very soon the April 2017 introduction looks very challenging. Tom McPhail of Hargreaves Lansdown suggested pensions tax relief could be an early casualty of Brexit. A pensions firm says there is a serious sense of mission creep about the Government proposals to expand Nest. The ex-Pensions Minister Baroness Ros Altmann opened a review of the scheme in July into whether its remit should be widened. The Government is considering whether NEST should offer a more comprehensive retirement service to reflect the shift in consumer needs following the launch of the freedoms in 2015. Click here for more Brake FCA given warning over robo-advice issues The FCA has been told it should urgently apply the brakes on robo-advisers and systematically review the sector. SCM Direct has delivered a heavily critical attack on the business models of robo propositions saying its research indicated many were financially unviable. Largescale automated advice models should be brought to market more rapidly with FCA help the authors of the Financial Advice Market Review said earlier this year. Click here for more Turn to pages 11 and 12 for Financial Planners views on Brexit The new team at the all female planning service Robo Advisers Bruce Moss has espoused benefits Just for women a Financial Planning firm with a female twist Financial Planners are launching a new dedicated female-only service run by women for women . Cockburn Lucas for Women will be headed up by Jo Noon. The business will focus on issues facing women following divorce and bereavement. Ms Noon who has 20 years experience as a Financial Planner said As women in general live longer than men they often end up in control of the purse strings which requires specific planning advice. Sadly despite improvements in pay inequality women still tend to earn less than their male counterparts and also take more career breaks which can have a profound effect on their own retirement planning outcomes. Click here for more How could we ever have managed without robo advice People will wonder in future how we could ever have managed without robo advice in the same way we think about the motor car. That is the view of Bruce Moss founder of eValue. Mr Moss told FPT Robo advice is sometimes described as a threat to advisers and sometimes as just a gimmick or a fad. Neither of these contradictory descriptions are true. Robo advice will never replace human advisers. However it is here to stay. Just like the motor car we will wonder how we could ever have managed without robo advice. He added that robo advice was a terrible name and it was important to realise that what we are seeing are its first baby steps . Click here for more Gender balance pledge signed by finance firms A pledge to build gender balance at all levels across financial services firms has been signed by 72 companies. The Women in Finance Charter has been supported by Standard Life Aviva Legal and General Blackrock Prudential Met Life and Aberdeen Asset Management among others. The FCA and Treasury have also made the commitment. The firms have agreed to monitoring and evaluation of progress being conducted by HM Treasury. Click here for more July - August 2016 5 NEWS Brexit Where next for finance Brexit turmoil threatens FCA s consumer focus Brexit turmoil threatens the FCA s focus on consumers the chair of a watchdog says. Sue Lewis issued the warning today as it was announced that she has been re-appointed the chair of the Financial Services Consumer Panel. She said Andrew Bailey faces a tough task maintaining the FCA s consumer focus in light of the turmoil caused by the outcome of the EU referendum. Click here for more Revealed FCA spends 500 000 on new website The total cost of the FCA s recently unveiled new website is forecast to be 536 945 Financial Planning Today can reveal. In late April the regulator declined to say how much had been spent after it announced the revamped site was set to go live. But a Freedom of Information request from FP Today has found that the total cost of the FCA website project until 29 April was 418 257 - including VAT. Officials said this would rise to 536 945 in total once the project is completed. The bulk of the cost so far - 319 380 was spent on paying web development company Zoocha. Annual costs for ongoing maintenance of the site are estimated at 48 960 and upkeep for the platform including provision of infrastructure at 56 944 each year. The FOI figures also showed that the total cost Click here to see more of the figures Minority of consumers have income protection Only a minority of UK residents have income protection cover research by Zurich showed. This was despite the fact as many as 42 per cent have experienced income loss in their working lives due to serious illness. Zurich s report comes as the welfare system faces austerity measures following the expansion of the Government s Work Capability Assessment programme. This will review the eligibility of a further 1.5 million people who are already receiving Incapacity Benefit. Click here for more of the creation of the FCA websites as part of the transfer from predecessor body the FSA has been 1.4 million so far. The internal FCA team has written the content worked on the design and project managed the process. Financial Planning Today asked whether any Financial Planners were asked for their views on the design and how to make it more relevant and easy to access in terms of information about financial advice and Financial Planning. The FCA s response stated We have had financial advisers take part in user testing and complete our online surveys over the last two years. We have also consulted the trade body APFA. The FCA added The Firms section of the FCA website is predominately for regulated firms or firms applying for authorisation. Advisers work two hours extra each day compared to a year ago More than a quarter (27%) of financial advisers are working longer hours with some working more than two hours extra each day compared with a year ago. One in 25 work 70 hours or more each week according to new research. Adviser research for Prudential found that More than a quarter of advisers are working longer than a year ago clocking up an average 43-hour week The average hourly fee for a financial adviser is 157 Advisers spend an average of 1 hour and 42 minutes each week on continual professional development and 1 hour and 54 minutes a week on client meetings that do not result in new business. While 27% of advisers are working longer hours at the other end of the spectrum 19% say they re currently working fewer hours than a year ago. The study showed the average adviser works a 43-hour week however one in 25 advisers clocks up more than 70 hours. Research was conducted by Opinium in March with 206 advisers. Click here for more Ian Mattioli of Mattioli Woods Openwork tops 3 000 advisers across the group Openwork has reported that it has topped 3 000 advisers across the group for the first time in its history. The network said the rise has come despite a long-term decline in the number of advisers working in the UK market. The 3 000 advisers work within its core network its protection business Owl and its nationwide IFA firm 2plan wealth management. Click here for more New HNW investors service set up A new investment service has been created for high-net-worth investors looking to mitigate inheritance tax. Mattioli Woods has teamed up with Stellar Asset Management a tax-efficient investment provider to launch Progression. This will operate by establishing one or more trading companies where the client is the sole shareholder the firm said in its announcement. The company s funds are invested in a range of trading activities that qualify for Business Property Relief (BPR). Murray Smith sales and marketing director said We have been concerned for some time about the inherent tax risk with many marketed IHT solutions that use Business Property Relief. Click here for more 6 July - August 2016 Constant change in the platform market can be a headache for your business but with Transact you can rely on exceptional service from a sustainable platform. We work exclusively with advisers We only operate in the UK We adhere to our responsible pricing strategy reducing our charges without affecting our service This approach means we can continue to support UK advisers and their clients for the long term. No.1 UK platform (CoreData Investment Platform Study 2015). Excellent pro tability rating (FinalytiQ Platform Pro tability Guide 2015). salessupport 020 7608 5350 This advertisement is for use by professional advisers only. Unless stated otherwise any opinions expressed are our own or based on our interpretation of relevant rules and regulation in the UK. The content is for information purposes only and does not and is not intended to constitute professional advice. Transact is operated by Integrated Financial Arrangements Ltd. Registered of ce 29 Clement s Lane London EC4N 7AE. Registered in England and Wales under number 3727592. Authorised and regulated by the Financial Conduct Authority (entered on the Financial Services Register under number 190856). (M122). NEWS Advisers bill for running FCA to drop from 74.9m The total fees that advisers will have to pay the FCA next year will fall. The A13 block including advice firms are set to pay 1.6% less that is 73.7m against the 74.9m paid in 2015 16. The fees were originally announced in April and then put to consultation. The final outcome was published last month. The FCA said it would hand the A13 fee block a 4.2 million rebate on its 2016 17 fees from fines levied against firms in that funding block. Click here for more Football players were among victims of the fraud Footballers among victims of jailed financial advisers Football players were among the victims of two financial advisers who have been jailed for a fraud disguised as a tax avoidance scheme after it cost taxpayers 100 million. The men and two others were jailed after they falsely claimed to have invested 275m in film projects then used offshore companies to cover their tracks according to HMRC which said it exposed it as a scam. Disguised as a film development venture marketed under the name of Little Wing Films it attracted more than 275 investors. This included footballers investment bankers and pop stars - who between them deposited more than 76m in the scheme in the belief that they were helping the British film industry while legitimately reducing their tax bill HMRC said. The scheme was created by accountant Keith Hayley and London-based financial advisers Robert Bevan and Anthony Charles Savill. They said that for every 100 000 invested higher rate taxpayers would get 130 000 in tax repayments. Norman Leighton an accountant based in Monaco helped the trio to create the pretence that over 250m was being spent on pre-production and development activity. FCA fines for individuals double but fall for firms The value of FCA fines against individuals has more than doubled over the last year but the total for companies has dropped by 37% - researchers have revealed. FCA fines against individuals came to a total of 17m this year compared to 7m in 2014 15 while fines against companies dropped to 880m from 1 403m the previous year according to a new report by global law firm Clyde & Co. The Senior Managers Regime which took effect in March is set to increase the spotlight on individuals. Click here for more The Guest Column Advisers are optimistic but major challenges lie ahead - Richards n my role as chief executive of the Personal Finance Society I get to travel across the country meeting and engaging with professionals in the financial advice sector. A clear theme emanating from my discussions with our members is that there is a growing confidence and optimism around the future of the advice profession. Following regulatory and government reforms of recent years there is now an increasing recognition of the need and value of professional advice at key life stages. As consumers are encouraged to adopt a greater degree of financial self-sufficiency professional advice will become an essential component of long-term life planning. Advancements in technology offer consumers a greater ability to access different levels of advice - an opportunity for the sector to engage with new markets. But while I am optimistic about opportunities for advisers there are challenges ahead. The Financial Advice Market Review (FAMR) has highlighted that the biggest issue facing the UK advice market remains the lack of consumer access. The rising cost and uncapped liability associated with operating in the regulated advice environment remains a continuing challenge for advisers driving some to adopt non-regulated activities and acting as a barrier for new entrants which in turn limits access to advice. Finding an alternative funding mechanism for the Financial Services Compensation Scheme (FSCS) is another challenge. While I m optimistic It is hoped that as the FAMR recommendations are worked through a number of by the Financial Conduct Authority (FCA) and Treasury solutions to these and other issues will emerge. I am heartened by the FCA and challenges lie Treasury s commitment to meaningful reform but it will only succeed ahead. if robust consultation with the sector continues. Keith Richards In the longer term rising demand for advice coupled with the current age demographic of the sector will inevitably lead to a skills CEO PFS shortage. We must find new pathways for young talent to enter and prosper in our profession. I Adviser among group jailed for 36 years in total A financial adviser was among a group of men jailed for a combined period of over 36 years for attempting to steal 2.2m in a tax fraud.The fraudsters set up partnerships to produce films called Starsuckers and Mercedes the Movie . The investigation by HMRC identified accountant Terrance Potter 55 as the architect of the fraud . He was assisted by IFA Neil Williams-Denton 42 who also promoted the schemes to high earning investment bankers. He worked for Greystones Financial Services when arrested in 2012. He was convicted in 2015 of one count of Conspiracy to Cheat the Public Revenue and found guilty on a second count in December 2015. He was sentenced to six years imprisonment for each count to be served concurrently. Click here for more Keith Richards is chief executive officer of the Personal Finance Society Mr Richards is the CEO of the Personal Finance Society and has more than 30 years experience within the financial services sector. 8 July - August 2016 PARAPLANNING NEWS Paraplanning standard could be CPD-based A new Paraplanning professional standard could be based on CPD Paraplanners have suggested at a London gathering. Moves to develop a professional standard have been underway for some while with some within the sector lamenting the fact that as things stand anyone could in theory label themselves as a Paraplanner. Despite the creation of former IFP and PFS qualifications attempts to better define the role of a Paraplanner have been hard to achieve. At the London Paraplanners Powwow recently attendees were broadly in favour of a new standard according to organiser Alan Gow DipPFS APP ACSI. He said it was a question of how it would work in practice. One of the ideas that emerged prominently from the debate was to make it CPD based. Mr Gow said This was felt to be a relevant way of demonstrating ongoing learning and that a CPD based standard could include experienced Paraplanners who might otherwise be excluded from any exam-based standard. Other suggestions included making it a portfolio based arrangement along the lines of an NVQ quali- Alan Gow DipPFS APP ACSI Powwow venue debate Cardiff v Bristol There could be two new Paraplanner Powwows on the way as organisers assess interest in one based in Bristol and the other in Cardiff. Two Paraplanners one based in Bristol and the other in Cardiff have expressed interest in organising a mini Powwow in their cities but can not decide which should host an event or whether there should be separate ones. An online poll has been set up. Click for more on the Powwows fication whereby Paraplanners build up a portfolio that demonstrates their competencies at work over time perhaps including adviser statements. Mr Gow co-owner of Argonaut Paraplanning in Reading said In terms of the reason for having a standard it s about having a structure and clarity for people so we can shout about what we do and say here is a really good career choice. He said it was important for the final version to be inclusive and recognised that there was a potential problem with longer serving Paraplanners at risk of not meeting the agreed criteria. He believes it could be vital for professional bodies to get involved to reach as many Paraplanners as possible. The Powwow takes place in tepees The Paraplanning Column The hunt for new Paraplanners - by Joanna Hague CFPTM Paraplanners gather for the Powwow North West Paraplanners got together for the Powwow North West in July hosted by Tilney at their riverfront offices in the Royal Liver Building in Liverpool. The gathering was the latest of a number of mini Powwows that have been held around the country in the last two years with more planned for later this year. Click for more on Paraplanning I t seems a lot of firms are looking for new Paraplanners writes Joanna Hague CFPTM a Paraplanner at Investment for Life in Doncaster. In some cases employers are expanding an already established Paraplanner team and in others advisers are looking for that one person who can help to ease their workload. I see adverts for Paraplanner jobs frequently - in the press emails online forums and on social media. There s no denying that Paraplanners are in demand. Each of these adverts comes with its own (long) list of specific skills that the perfect member of staff should have in order to fit the bill. And why wouldn t they Of course employers want to find someone who easily fits in with their existing team processes and Financial Planning style. Employers appear to ask for all sorts such as qualification levels familiarity with a specific piece of software or a penchant for cashflow planning. There s often a catch - all requirement such as be great at anything else that might be expected of you - just to cover off every skill that could possibly be required. Perhaps this is why firms are finding it difficult to find the right person and we hear that even those being interviewed are failing to hit the mark . Given such a tight specification attached to each vacancy is it any wonder you can t find the perfect candidate In truth it s possible that the perfect candidate doesn t yet exist. Those Paraplanners that already meet such a specification are likely to be happily ensconced in their comfortable offices and are unlikely to be applying for another position without good reason. So how about employing someone who s nearly there Someone who when interviewed demonstrates their passion for improvement and enthusiasm for learning from a successful firm on their route to becoming a valuable team member. Perhaps employers Perhaps employers should change their strategy and look for someone taking their first tentative steps into the Financial Planning should change their world Someone who can be shaped to fit the team you already have. strategy and look for Maybe you don t physically need a new Paraplanner in your office at all. someone taking I ve found that out-sourced firms are usually happy to work alongside in-house Paraplanners and can be used to take off some of the their first steps in pressure at times when the work keeps piling up. Demand is currently Financial Planning outweighing supply. More advisers should consider training someone who has potential to be a star rather than expecting their Paraplanner Joanna Hague to be perfect from the start. National Powwow to take place for fourth time The war paint and wigwams will be unwrapped again ready for around 100 Paraplanners to debate the hot topics of their profession in September. Organisers have announced that the increasingly popular national Powwow a kind of unconventional conference is returning for the fourth time on 15 September at Upper Aynho Grounds in Northamptonshire. Click for more on the Powwows Paraplanners at the Powwow July - August 2016 9 COMPANY NEWS around 3.3bn of their assets. Jones Sheridan s leadership team of managing director David Williams and chairman Stuart Banks will remain with the business. Mr Williams said Joining 1825 is a very natural fit for us as we are both strongly aligned to the belief that advisers add the greatest value by helping clients understand and achieve their financial goals. The transaction is expected to be complete in early Q4 2016. Managing director Andy McCabe said the move would help reduce overheads and improve communication between teams. Mr McCabe said Selectapension has nearly 50 members of staff on its books. The company is looking to expand employee numbers by a further 10-15% by the end of the financial year including Paraplanning roles. which is released later this year. Alliance Trust Savings has bolstered its intermediary sales team with Rob McDonnell and Ron Gillies joining the company. Mr McDonnell becomes head of strategic partnerships while Mr Gillies is the new business development manager for the north region. Click here for more Standard Life s Financial Planning arm has sealed another acquisition Standard Life deal boosts planner numbers to 75 Standard Life s Financial Planning arm 1825 has expanded to 75 planners after the takeover of a northern firm. 1825 is to acquire Jones Sheridan of Crewe which has assets under advice of about 350m. 1825 and Jones will create a new north-west regional office housing 30 employees including seven advisers and four Paraplanners. No fee for the deal was disclosed. The buy out is the next step towards creating a UK-wide Financial Planning footprint Standard Life said with its expanding number of planners advising over 9 300 clients on Also on the move.... Selectapension to move as part of its expansion Selectapension is to move to new premises as the firm expands and looks to bolster its staff numbers. The company s new home in Crowborough East Sussex will be situated next door to the Selectapension Selectapension s Bureau Services Andy McCabe office. Legal and General has appointed Stephen Gray as its new head of wealth management. Mr Gray will work with wealth managers stockbrokers and fund-of-fund clients. At Selectapension former NHS finance boss Jon Manser has joined. Mr Manser who used to oversee budgets of 400 million will assist with the development of Pension Monster Rob McDonnell of Alliance Trust Ron Gillies of Alliance Trust 10 July - August 2016 NEWS FEATURE BREXIT The EU and Britain are set to go their separate ways Brexit volcano erupts but are planners fleeing for the hills For many it felt like a political and economic volcano had erupted on the day the UK voted to leave the EU. But what will the impact be for Financial Planning James Nadal reports. T he ash from that explosion is still falling from the sky with many questions still up in the air and the ground remaining firmly shaken. But aside from all the intricacies and difficulties surrounding constitutional and political elements of Brexit and the technical discussions on triggering article 50 where does all of this leave Financial Planners Will it usher in an exciting new future or be as bad as some prophets of doom forecast during the campaign Financial Planning Today has surveyed the opinions of Financial Planning professionals on the subject to get a glimpse into how those in the sector are feeling. Firstly we asked in a reader survey what kind of impact they expect it to have on them and their clients. More than a third (36%) of Financial Planners believe that Brexit will have a negative effective on clients. Just 16% thought it would have a positive effect for clients with 47% believing the impact would be neutral. A third of respondents believed it would negatively affect pensions and investment performance with 16% disagreeing and saying it would be positive on that front. About 24% thought it would be positive for their business Most people will not notice any difference whatsoever. It will all be a lot of noise around them. Andrew Elson Beaufort Financial Planning (Yorkshire) while 26% thought the opposite with the majority sitting in the neutral camp. At a personal level Andrew Elson CFPTM owner of Accredited Financial Planning firm Beaufort (Yorkshire) was very calm about the situation and said there were no day-today difficulties associated with the decision to leave. He said You can only deal with the current situation. We still have our own currency and can set our own interest rates. He believes that Brexit will not have an adverse effect on clients wealth in the coming two years saying Most people will not notice any difference whatsoever. It will all be a lot of noise around them. FP Today asked John Sloan a Financial Planner at Navigator Financial Planning in Northern Ireland if he believed that exiting the EU would have an adverse effect on clients wealth in the next two years. Continued on page 12 July - August 2016 11 NEWS FEATURE BREXIT Continued from page 11 He told us I don t know I am certainly not that clever. Speculation is not something that we deal in at Navigator. Our client s goals and their plans will continue regardless of whether we are in the EU or not. We work with clients in dealing with their finances and helping them to potentially realise their goals and ambitions. Of course that is driven to a large extent by their investment portfolios. The UK represents a small percentage of the stock market in terms of global capitalisation and as such that is reflected in our portfolios. Diversification is the key here across both asset classes and global markets. As I say we don t speculate in relation to our client s wealth we work with them to ensure that they are invested correctly according to their needs and risk profile to help them to potentially meet their long term goals. He insisted he felt calm about the whole scenario saying Honestly I don t have many concerns at the present time. If we leave the EU then there will more than likely be a messy divorce but I think we will be ok. People still live they work and the economy will move on it has to. At times like these we need to keep our heads and earn our crust because that is what clients need us and pay us to do. Tamsin Caine CFPTM Chartered Financial Planner at Smart Financial in Altrincham admitted to some personal concerns relating to the economy and trade with the EU which she said will of course impact Financial Planning . She said During this period of uncertainty I couldn t say what the future looks like for the UK and so I don t have specific concerns. However we have a long term strategy which we build with our clients which we have not We don t speculate in relation to our client s wealth we work with them to ensure they are invested correctly according to their needs and risk profile to help them to potentially meet their long term goals. John Sloan Navigator Financial Planning changed since the Brexit vote. I hope that exiting the EU will be negotiated in such a way that the impact on the UK economy is not too significant. As our clients are invested globally the UK stock market movements do not have a huge impact on client investments and so my hope is that they gain advantage from issues such as currency depreciation. I am sure that Brexit will have an impact but I don t think that anyone knows what that will be until we are further down the road. Sandy Robertson CFPTM MD at Acumen Financial Planning said Over a two year time frame we cannot see any of our clients being adversely affected to the extent that their financial well being would be jeopardised in any way. We are much less optimistic about the effect on our clients over a 20 year time frame. Richard Libberton private wealth manager at Anderson Strathern Asset Management said It s impossible to predict the outcome of Brexit on pension savers. Those Financial Planners with their fingers on the pulse will have already advised their clients to take a deep breath and remain calm. It is important to maintain an internationally diverse portfolio within a pension to take advantage of the vagaries of the markets as a result of the uncertainties around Brexit. It could actually be beneficial for UK investors in the long run. We are in unchartered waters and the truth is we just don t know. Chris Daems DipPFS director of Cervello Financial Planning said It s difficult to say whether Brexit will have an impact on the number of queries we receive or new clients who want to engage with us although I wouldn t be surprised if like many events of this type it makes individuals decide they want a financial adviser or planner who does works hard to keep them constantly informed. Old Mutual Wealth retirement planning expert Adrian Walker said Brexit left a big question mark over the future of pension tax relief . Tom McPhail head of retirement policy at Hargreaves Lansdown agreed saying Pension tax relief costs the exchequer billions every year and there may now be increased pressure to balance the Budget the government top up to our retirement savings could be an early casualty. State pensions could also be affected he said. As a Financial Planning professional how do you asses the impact of Brexit on clients Very Negative 0.00% Very positive 4.76% Positive 19.05% Negative 35.71% I am sure that Brexit will have an impact but I don t think that anyone knows what that will be until we are further down the road. Tamsin Caine Smart Financial 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 Neutral 50% % Percent Source FP Today reader survey July 2016 Which way did they go Planners say how they voted in the big EU debate 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 0 Financial Planners were firmly in the remain camp when it came to the EU referendum campaign our survey has suggested. Two thirds of respondents said they voted for Britain to remain a member of the European Union while only 16.6% told us they voted to leave. Following the chaos and confusion in the days after the vote and with emotions running high it was reported that some people were wishing they hadn t voted to exit. This led to the term Bregret and bolstered the voices of those who were saying the result was too close to make such a drastic call and there should be a second vote. Of the Financial Planning professionals who told us they opted to leave just under a fifth said they regretted their decision. In contrast 100% of remain voters said they had no regrets about their choice. See How did you personally vote in the UK s EU Referendum Voted Leave Voted for remain Did not vote did not have a vote Prefer not to say Since the UK voted for Brexit 10 20 30 40 50 60 70 80 how many clients have contacted you to discuss the implications 1 or 2% 3-5% 5-10% 10% 0 10 20 30 40 % Percent 50 60 70 80 0 Other 5 10 15 20 % Percent 25 30 35 40 poll result charts above. Despite the fears Many planners indicated they had a very low number of calls or enquiries from clients on the day the result was announced or soon after. The survey indicated about 11% had been contacted by around 10% of their client base but most said they had only had calls from about 1 or 2%. 12 July - August 2016 0 5 10 15 20 25 30 35 40 PROFESSIONAL BODIES Delegates attending last year s conference The Walkie Talkie is the CISI s new headquarters in London Members of the CISI up for board nominations at AGM The CISI Annual General Meeting will be held Thursday 6 October at a venue and time to be confirmed. A Member (MCSI) or Fellow (FCSI) of the Institute may be nominated for elected vacancies on the board. Board members retiring by rotation may stand for re-election and the board itself may also sponsor candidates for any vacancies arising. CISI Financial Planning Conference taking shape Former Pensions Minister Steve Webb will be among 40 guest speakers at the CISI s Financial Planning Annual Conference it has been announced. Mr Webb the director of policy and external communications for Royal London Group will be delivering the first keynote speech on the emerging pensions regulatory landscape. The event takes place at Celtic Manor Resort in Wales from 3 5 October. It is the first annual conference since the Institute of Financial Planning merged with the CISI. In 2015 over 425 delegates and Paraplanners attended of which over 40% were CFPTM professionals the CISI said. The CISI said The Financial Planning Conference is where the leading Financial Planning professionals come to talk about what s going on in the industry as well as listen to ideas which challenge conventional thinking and push the boundaries of professional advice further. The conference is a must attend event for our Financial Planning community as it provides opportunities for personal and business development catching up with friends making new connections and sharing best practice. The line up for speakers includes the following Nicola Horlick Chairman and Chief Investment Officer Glentham Capital and CEO Money&Co Gill Cardy Insight Consultant Defaqto and Former Member FAMR Expert Advisory Panel John Fachiri CFPTM Chartered MCSI Andy Bounds motivational speaker Campbell Edgar Chartered FCSI and CISI s Head of Financial Planning will welcome delegates. He will share a platform with CISI s Deputy Head of Financial Planning Jacqueline Lockie CFPTM Chartered FCSI to provide a keynote speech on day two. Mr Edgar said We are extremely excited to reveal our Financial Planning Annual Conference line up and to bring our members a programme which we hope lives up to the high standards conference delegates have come to expect. We have worked hard with the support of the conference committee to devise a stimulating programme which members can really get their teeth into and which will help them add value for both their businesses and their clients. In addition to the many learning opportunities available the conference provides a forum for networking connecting and sharing ideas and best practice with like-minded individuals. CISI strikes a new deal with a leading Sri Lanka state university One of Sri Lanka s largest state-owned universities has confirmed a partnership deal with the CISI. The University of Sri Jayewardenepura has joined the body s worldwide network of partner universities. The CISI said it will promote industry-recognised professional qualifications helping students distinguish themselves in the competitive graduate market. Turn to page 38 to see how a former adviser on a James Bond film will offer tips to Financial Planners on dealing with risk and uncertainty. Advisers turn backs on annuity resales market Most advisers will shun the secondary annuities market a trade body has suggested. The Association of Professional Financial Advisers has warned that many of the professionals it has consulted with about the plans which are due to take effect next year have no interest. It also called for the Government to delay implementation saying the timing was wrong with all of the uncertainty caused by Brexit. Chris Hannant APFA director general said I have concerns about the workability of the proposals as the vast majority of financial advisers I have spoken to have said they just aren t interested. There is therefore the risk of a mismatch of supply and demand particularly given the creation of a mandatory advice requirement for those whose annuities are valued above a certain threshold. APFA director general Chris Hannant APFA wants fair funding model for pensions body APFA has called for assurance of a fair funding model for the new pensions guidance body. The organisation welcomed the government s plan to restructure incorporating functions currently provided by TPAS Pension Wise and MAS as a step in the right direction. But it said the burden should not fall solely on FCA regulated entities and called for clarity on funding. HM Treasury and the FCA need to recognise that the time is therefore not right to push ahead with their plans for creating a new secondary annuities market. I believe the correct course of action is to shelve these plans until advisers and their clients have had the time to digest and work through the current market uncertainty. Advisers and clients have a lot on their plate to contend with over the next few years he said. 14 July - August 2016 PROFESSIONAL BODIES Brexit If you re expecting radical regulation change you ll be disappointed Radical changes to the country s regulatory landscape will not arise from Brexit the Personal Finance Society s chief executive says. Keith Richards said that the unexpected EU referendum result would not lead to major changes in the short term. The FCA quickly issued a statement on the day the outcome was known to stress that firms must remain compliant with EU regulations because the UK will remain a member until an exit plan has been configured and seen through. Mr Richards said For anyone expecting radical change to the country s regulatory landscape in the wake of last week s decision however this is unlikely to materialise. The UK has driven its own regulatory agenda for years and has always had the opportunity to apply for variations to EU rules where it feels appropriate. The unpredictable or adverse impact however Keith Richards PFS chief executive European Parliament buildings which may include a restriction on UK advisers being able to operate cross-border is likely to become clear quite quickly as the EU looks to push the agenda. Mr Richards said Firms covered by MiFID are authorised and regulated in their home state - broadly the country in which they have their registered office. Once a firm has been authorised it is able to use the MiFID passport to provide services to clients in other EU member states. As a result of Brexit some UK advisers who provide cross-border advice may have little option but to apply for individual authorisation in different EU states or become a member of an organisation with its registered office in an EU member state such as Ireland. Meanwhile implementation of MiFID II is due by January 2018 - prior to a formal exit from the EU - and the UK s adoption of this wide-ranging legislation will be largely unaffected. As negotiations regarding the terms and conditions of the UK s withdrawal from the European Union continue a degree of uncertainty is likely to linger for some time yet. He added For professional advisers this means an increased level of demand from consumers worried about the impact of a future deal on their personal financial circumstances and it has been apparent that many firms have been kept extra busy since the vote was announced. SELECTED AUGUST AND SEPTEMBER EVENTS Professional body Title details Influencing skills Chartered Insurance Institute master class Drones - The risks and Chartered Insurance Institute usage in insurance CISI Date 02 08 2016 Venue CMS Cameron McKenna LLP 20 Castle Terrace Edinburgh EH12EN Pizza Express 32-34 Earl Street Maidstone ME14 1PF TBC Time 09 30 12 30 17 30 19 00 12 30 13 30 Guest speakers Andy Currie Price Free Contact details booking 020 8989 8464 18 08 2016 Perran Bonner Director Of Unmanned Services Strat Aero PLC Trevor Neil MCSI Director BETA Free Free to CISI members. 50 for non memers Applications need to be sent to info Free to CISI members. 020 8989 8464 cpdevents CPD Event - Behavioural 24 08 2016 Finance - bulls and bears are we all sheep 34th Cambridge Symposium on Economic Crime. Final Salary Pension Transfers London regional conference 2016 Liverpool & North Wales branch Netball Tournament 2016 Bank of England Update Establishing maintaining great client engagement & Nuptial agreements advice to mitigate the consequences The client centred financial planner CISI 04 09 2016 - Jesus College Cambridge Jesus N A 11 09 2016 Lane Cambridge CB5 8BL 07 09 2016 Cunningham Coates 32-38 Linenhall Street Belfast BT2 8PB Chartered Insurance Institute 20 Aldermanbury London London EC2V 7HY Liverpool John Moores University Redmonds Building Brownlow Hill Liverpool L3 5UG Crowne Plaza Leeds The George Hotel George Hotel 41-49 St. Georges Road Cheltenham Gloucestershire GL50 3DZ 11 0013 00 09 30 16 00 17 2021 00 TBC - see CISI website for more details cpdevents CISI David Trennor Technical Director Intelligent pensions. Stan Russell Sam Lynes Andy Miller Chris Hewitt cpdevents Personal Finance Society CISI 14 09 2016 Free to members 020 8530 0852 09 09 2016 N A N A CISI CISI 20 09 2016 21 09 2016 TBC 15 0017 30 Will Holman Deputy Agent BOE Julie Lord CFPTM Chartered FCSI Gregg Thomas Taxworth Free to CISI members cpdevents CISI CISI 22 09 2016 Brown Shipley 3 Hardman street Manchester M3 3HF University of Northampton Boughton Green Road Northampton NN2 7AL 10 0016 00 11 00 16 45 John Dashfield 56 cpdevents cpdevents Financial Planning 28 09 2016 from pensions to communication skills to adding value through tax and back Free to CISI members Robert Lockie CFPTM Chartered FCSI Director Bloomsbury Richard Mullender Ex-hostage negotiator Mullenders Ian Mobley Head of Adviser Engagement Standard Life Charlotte Dunn Partner & National Head of Wealth Protection Shoosmiths Wayne Readshaw Business Development Manager Time investments July - August 2016 15 ADVERTISING FEATURE SYNAPTIC Assessing platform suitability a big issue in the selection process Good quality research is vital in the platform selection process to ensure appropriate compliance but how best to achieve this Illustration results (source Synaptic) 10 year term on 50k SIPP. Option 1. Option 2. Platform Cofunds Product Pension Account R.I.Y. 1.45% 2.46% Final fund value 70 800 64 200 Total charges 10 600 17 200 Adviser charges 2 986 2 813 By Eric Armstrong Product Marketing Synaptic Software Limited t can sometimes be difficult to establish in the compliance conversation how important good research is in helping the business improve. Good compliance can provide a constant benchmarking exercise capable of informing better decisions that align the client s interests with yours. The recent humdinger of a paper from the FCA the thematic review document TR16 1 titled Assessing Suitability broaches this difficult conversation. Poor customer outcomes so argues the paper are as a result of poor research and due I diligence and successful firms are those that have a culture of challenge . Where there was no culture of challenge within the firm the research and due diligence process showed weaknesses . The regulator considers good due diligence around suitability to be the hallmark of a good firm. It has requested files from 700 firms as part of its initiative to assess suitability and drive up standards in this area. Highlighted for concern in this analysis are incorrect risk-profiling and costs . Disregarding risk-profiling for the moment a specific area of concern stands out Many firms demonstrated inconsistent and insufficient research and due diligence in the selection of platforms . Frankly the role of a platform in an independent firm can leave the door open to compromise. The regulator has now stated clearly that firms need to do more and that platform selection must be less of a service issue for firms and more of a proposition and value issue for clients. This means doing research on an individual basis and crucially NOT over relying on a platform s own tools where a wider market perspective cannot be achieved. We meet some firms who resist thorough due diligence. They assess platforms according to the usual criteria (stuff that you can tick off in a list) reputation terms and conditions range of funds and tax wrappers functionality accessibility - and when it comes to cost they look at the headline costs such as what is the generic charge of the platform. (A single piece of features-based research in Synaptic will cover all of the features including financial strength). What they don t always do is look at cost at an individual case level taking into account the specific fund or portfolio selection they have or understanding how the myriad of different combinations involving platform wrapper and fund work. Those who haven t performed this research may be surprised to know the extent of these variations in cost. Of course advisers should not be looking to chase minute increments of savings but they should be able to perform Reduction In Yield calculations that can be used to confirm the value that they are delivering. Working to keep the costs down for the client puts additional income in the adviser s pocket. The illustration above shows divergence of cost relating to a single fund selection within a SIPP. The difference between 2 premier division platform options stands to cost our client over 6k of avoidable charges. The point is to understand these variations as they are unpredictable and varied. If your platform due diligence is generic and stops at platform level you cannot accurately evidence the quality of the advice you impart to clients. About Synaptic Software Synaptic is committed to supporting independent financial advisers paraplanners and financial planners who offer gold standard advice. The Synaptic Research suite can be accessed from a single log on and is made up of best advice modules that offer whole of market comparisons and full suitability reporting for products platforms and fund recommendations. Analysis relates to risk price and suitability by features with full audit trail built in. Synaptic Software Limited 16 July - August 2016 sales 0800 783 4477 PLANNER CASEBOOK The clients paperwork was chaotic and muddled Drama enthusiasts money management was a mess Pete Matthew CFPTM APFS explains how he tackled the jumbled financial situation of a couple who he knew from a local club. The Cornwall-based planner explains how he brought order to chaos. Casebook Brief It s pretty rare that clients come to me with their finances in perfect order. In the case of Gary and Janet their paperwork was in the worst state of disarray I think I had ever seen. Before I could even think of advising them there was a lot of work to do to identify and investigate the policies and plans they already had. This involved setting up a filing system from scratch and teaching them how to use it. Only then could we bring their current situation into Voyant and model different scenarios. As this process was ongoing their situation changed again but the flexibility of the software enabled us to pivot easily and tweak the recommendations to reflect the new reality. This is a real life case study. Names and some other details have been changed to protect confidentiality. ary and Janet came to me as we already knew each other from an amateur dramatic group of which I m an enthusiastic member. I should perhaps have foreseen the issues with which we would grapple over the coming months when they said to me that they just needed things sorting out they sure did. Most people present themselves to an adviser because they have a single issue which has prompted them to pick up the phone. In this case Janet was being offered early retirement and redundancy from her senior role in the NHS. They needed to know whether this was going to give them all that they needed to retire fully. When we first met however it was clear that there was a great deal of work to do first before we even got to their major financial decisions. Their filing system was basically a series of plastic tubs in which everything was placed with no distinction at all in date order. The most recent bit of post was on the top and that G was it. There were six of these tubs dating back to the early 2000s. Gary and Janet had absolutely no idea how much money they had or where it was invested. Clearly this was no basis on which to advise them on a major financial decision. They confidently assured me that there would be no non-financial paperwork in the tubs. Despite the assurances I found various hospital appointment reminders holiday bookings and newspaper clippings they really had no clue So we set to work. I instructed them to buy a foolscap filing cabinet some drop files and folders and a labeller so I could help them sort out their financial lives. It took several hours and quite a few rounds of tea and biscuits but eventually we had a clear picture of where they were currently. At the same time we had taken authority on the various existing investments and pension plans. I believe that good filing is good for the soul and both Gary and Janet reported that they felt like a weight was lifted from their shoulders. They had known that their system was far from ideal and they that their finances had been chaotic as a result but the problem had become too much for them to deal with. I reckon I earned my fee in those first couple of sessions clearing out their boxes but their gratitude was worth it. Having established (for the first time in many years for them) their current financial situation it was time to start planning some different scenarios. There were several options available to Janet as the interplay of redundancy and early retirement was pretty complex. Should she use some of her redundancy to offset the early retirement reduction in her pension What were the tax implications of each option How did each option fit with their wider financial position I believe that a key skill for any adviser is to be able to present options to a client in the clearest way possible to enable them to make an informed decision. I don t know how anyone could do this Continued on page 18 July - August 2016 17 PLANNER CASEBOOK What Happened Next... Gary and Janet have a tidy tax-efficient portfolio which is optimised for their ethical convictions. Needless to say we will keep this under review but as we use a multi-asset volatility-targeted approach to our investing there won t be many changes to make as the years go by. Maybe some rebalancing and switching in and out of some funds. Usually with my clients I spend ten minutes talking about the money and fifty minutes talking about them. Plans change relationships change and the money may need to change to reflect that. I anticipate a fairly easy relationship with Gary and Janet going forward but I know that the way we have set things up will make for the ability to cope nimbly with changing circumstances. Continued from page 17 without the primary tool of our trade a cashflow modelling system. As it turned out the way forward for Janet s big decision was clear. But in the analysis of their current investments it was clear that there was a glaring inconsistency. Like many people the investments had been amassed over time with no cohesive strategy. Importantly Gary and Janet made it known to me early on that they had strong feelings about ethical investing and yet this was not reflected at all in their current ISAs and pensions. Some work was needed here too. You know when you re watching Grand Designs and Kevin gets frustrated because the plans keep getting changed as the build goes on I felt a bit like that in this case. Shortly after receiving confirmation from the NHS about her retirement and redundancy benefits Janet told me that she had taken a full-time job with an NGO as a consultant. Back we went to Voyant to see how this affected things. Obviously it meant that they would be accessing some of their savings a little later than planned so we adjusted the recommendations accordingly. In the end the advice was fairly straightforward They had far too much in cash which ought to be invested. The had the risk tolerance to cope with this and had invested in the past so they understood the risk implications. Gary had a couple of pensions with safeguarded rights and he needed to take the benefits in different forms and at different times to optimise his income. The lump sums from redundancy and retirement should be used first to pay off the last of their mortgage and then invested according to their ethical principles. Their existing pensions and ISAs should where possible be switched internally to reflect those ethical considerations. In the end I recommended that all of the ISAs be consolidated onto our platform to make their lives more straightforward. That they should begin drawing from various assets as necessary and that the strategy for this should be revisited each year. Gary and Janet are the kind of people where you have to deliver the advice in small chunks. Not because they are unable to comprehend they re very intelligent people but because they need things broken down into one step at a time. Give them four steps to take and they would freeze but one or two steps at a time was fine. I ended up giving them homework after each session You get that done and that done and I ll do some other things and we ll meet again in a week s time. In all the implementation of the advice took nine months. I got the sense on a few occasions that they were in danger of burying their heads in the sand again. I had to remind them repeatedly that they had been in a real mess but that at the end they would have a simple portfolio designed to enable them to take regular tax-efficient withdrawals as needed. It might get worse before it got better but the end result would be worth it. Janet is now coming to the end of her contract with the NGO so we re picking things up again. We will be revisiting the Voyant models and updating them to reflect the new situation. Having tidied up their very chaotic finances they are much better able to process decisions as they arise. They now know exactly what they have and where as we produce a one-sheet schedule of their portfolio every six months. This schedule represents the top tier of their financial management. It s my job to make sure that part is optimally positioned for tax and for their income needs going forward. Below that they have a buffer fund in an online bank account and they have their current accounts. All they have to think about is day-to-day cash management and that s it. They leave it to me to make sure the high-level stuff is working while they get on with living. They report that this has freed up their minds completely. I think that as advisers we underestimate the mental pressure that financial management puts on our clients. Everyone deals with it differently of course but for Gary and Janet having to deal with maturity reminders from their building society accounts was a pressure to them so they filed them. This had left them not only with a filing disaster but money which was earning them nothing because they had failed to make decisions. For me to be able to relieve them of this pressure and optimise their finances and their filing is part of the privilege of doing this job. The vast majority of clients have no need of complex tax planning. I have yet to write a plan for a client which is anything like as intricate as the one I wrote for my CFP qualification ten years ago. But to our clients what we do is magical as we cut through the confusion offering clarity and direction. Needless to say I have had no resistance from these clients on fees. From the first meetings when I was sorting out their filing they have seen the value that I have added in clear focus. I ll make sure to remind them of this whenever we meet but I ll also focus on continuing to add value as the relationship progresses. Pete Matthew CFPTM APFS managing director of Jacksons Wealth Management Pete Matthew is managing director of Jacksons Wealth Management in Penzance a 92-year established Financial Planning practice. In his spare time he is the creator of MeaningfulMoney a financial education website and podcast the latter of which has been downloaded over half a million times. This has now become a major source of new business enquiries to Jacksons. He is married to Joanne a proper Cornish maid and has two teenage daugthers Ellie and Kate. He also has a four-legged daughter a Jack Russell called Maisy. He is a keen musician playing piano and drums in his local church and is currently rehearsing for the lead role in a stage production of St Trinians playing Miss Fritton the headmistress. pete Key point 1 The key to good Financial Planning is starting from a position of knowledge. Tidy files lead to tidy planning. Key point 2 Software such as Voyant enables me quickly to tweak a plan in real time as clients circumstances change. 01234 111 222 Key Point 3 Simplification is the goal in many cases of Financial Planning. Usually simplified portfolios will serve the clients needs more effectively than fancy arrangements. 18 July - August 2016 For financial adviser use only. Not approved for use with customers. So how long do you think you ll live Asking your client about how long they think they ll live is difficult. Telling your client they ve run out of money will be even harder. Visit Aviva s Retirement Spotlight to get valuable insight on talking to your clients about their longevity from Professor Paul Dolan from the London School of Economics and Political Science. Find them now by searching Retirement Spotlight. RetirementSpotlight Aviva Life Services UK Limited. Registered in England No 2403746. 2 Rougier Street York YO90 1UU. Authorised and regulated by the Financial Conduct Authority. Firm Reference Number 145452. LF90101 05 2015 Aviva plc THE CLIENT HUNTER The Client Hunter Chris Daems DipPFS director of Cervello Financial Planning in Surrey tells Financial Planning Today s Client Hunter his top tips for finding and retaining clients The Client Hunter How did you find your first clients Chris Daems When I first started the business I had agreed with my previous employer that I d continue to look after a handful of the clients from when I was employed. However what was clear was that I needed to attract more clients (and quickly) to ensure that the business survived. This meant that in the early days of the business I spent a decent amount of time networking going out to meet fellow professionals and starting to build my network. Slowly but surely we started to get referred clients from the network we d built and while our network continues to change and evolve these introductions are still a core part of our business. Who has been your longest client and can you tell us more about them CD The personal client we ve been looking after the longest was on board with the business from day one (I was her adviser at my previous employer). She is single in her mid 60s (although she was in her mid 50s when we started our relationship) owns a north London property and is a retired professional. The corporate client we ve been looking after the longest is also one of our largest. We started to work with them in 2011 (although we launched in 2009 we didn t really focus on corporate work until a couple of years after launch) and they are in the fashion retail space. What is the key to long-term relationships with clients ensuring they stay with you CD What works for us is regular communication developing a culture where clients feel they can pick up the phone and talk to you at any time and delivering on your promises. Also we believe it s important to listen to the clients who don t stay. Since we launched we have had a couple of clients who have decided not to continue using our service. We asked why and they gave us massively useful insights into how we improve and develop as a business moving forward. What lead generation techniques have you found most successful If referrals what method do you use CD New client enquiries come from a wide range of sources however when I consider what delivers us the highest quality clients as well as the greatest number it is undoubtedly introductions from either existing clients and fellow professionals. However it s important to remember that we d define much of the work we do to promote our businesses as marketing rather than sales and this includes writing regularly about the business speaking at events and writing for the press. How many clients would you say are referrals from existing clients CD With the work we do with AE in a Box we rely on existing partner businesses and therefore 100% of our new clients come from our professional partners. With Cervello it s less but still significant with existing clients and professional partners being responsible for 60 65% of new client enquiries. Do you carry out workshops seminars and events CD We do run workshops and seminars (as well as webinars) often in collaboration with professional partners and sometimes on our own although we need to get a bit more disciplined on how we run them. We have two live seminars in August and September and intend to do some more later in the year. Attendees of these events tend to be existing connections however we do encourage these contacts to bring a friend and we find this approach works well. What experiences have you had from Financial Planning Week CD I think Financial Planning Week is a great idea and provides the Financial Planning community with an opportunity to talk about how they add genuine value to their clients lives. While I ve had limited direct client contact through embracing Financial Planning Week it s still something I d happily support. How many clients do you see that have never seen a wealth manager or Financial Planner before CD Most of our personal clients have had an experience of Chris Daems director of Cervello Financial Planning Chris Daems is the director of Cervello Financial Planning and Auto-Enrolment in a Box. Chris has specialised over the last few years in helping firms of all sizes (ranging from 1 500 through to 30 employees) with the challenges they face while meeting the employer duties relating to automatic enrolment regulation. Chris has won Bluebook Newcomer and Pensions Adviser of the year award at the Unbiased awards 2014 and also won Group Pension Adviser of the Year . He was also commended for Pension Adviser of the Year and Young Financial Adviser of the Year at the Unbiased Media Awards 2015. Chris 20 July - August 2016 01708 606 202 THE CLIENT HUNTER Chris Daems speaking at an event working with a financial adviser or planner before. Some of their experiences have been good but often the reason they approach us is because they have been dissatisfied with the service they ve received.Often the corporate clients we engage with are meeting with a Financial Planner for the first time but now have a need due to the fact they need to comply with automatic enrolment. What is the key to securing a new client and convincing them of the merits of Financial Planning CD It depends on the client. However I think that taking the time to understand what they are looking to achieve and setting out the service we provide (and the costs associate with this service) clearly from day one helps enormously. The other thing which helps us in these initial conversations is talking about cashflow and what it can illustrate pretty early in the conversation. Many of our clients approach us with a wide range of initial queries but pretty often the question they really want the answer to is clear Have I got enough money to do what I want for the rest of my life Cashflow tools can provide both adviser and client with an opportunity to explore this question and visualise what a potential clients financial future might look like. This is a powerful conversation to have and often illustrates to the client how their perception of a financial adviser may be different from reality. My Best Client Who were they and why CD I ve got a number of best clients . However instead of ours being the wealthiest I actually consider the best to be the ones we either learn from (especially our ex-business owner clients who over the years have given me hundreds of hours of useful guidance) as well as the clients with an immense passion for life especially in their later years. The Client Hunter What are your top 5 tips for other Financial Planners for finding new clients Tip 1 Put systems in place for your marketing (as you would for perhaps your product or portfolio selections) Tip 2 Build your professional network both online and offline and create content designed to add value to give away. Tip 3 Niche. Being an expert in a really focused area while sounding counter intuitive actually attracts more work. This doesn t mean you don t do work outside your niche it just means that you ll have something your introducer businesses can focus on. Tip 4 Read about both behavioural economics and psychology Not only are these areas fascinating subjects in their own right they also provide massively useful insights into how people make decisions think feel and behave. This is hugely useful in thinking about how to attract new clients. Tip 5 Be you People buy people. Therefore having an element of your personality in your business your marketing and your interactions will help you attract clients who are right for you and your business. The client web how Financial Planners use the internet and social media The Client Hunter How useful has online been for finding clients Chris Daems Online tools have been massively useful in attracting clients but also in staying in regular and constant contact with potential clients and our professional network. Often I ve had conversations with financial advisers and planners who say that online doesn t work for their business. The reality is that investing time effort and energy into an online strategy doesn t provide quick wins but is massively helpful over the longer term. Do you use LinkedIn Twitter Facebook CD I use all three but try to automate as much as possible. Therefore while the social platforms are useful the tools we use to ensure we re using our time as efficiently as possible are even more so. Two of these tools and ones I d encourage advisers to take a look at are Hootsuite and Buffer. Which is the best social tool and why CD I don t think there s a best social network (and we ve had business from all three) it s just that while there is usually a significant overlap you may connect with different people on different networks. The key factor I think is having something useful (or insightful or funny) to say and trying to add as much value as you can. It s the reason we do as much writing for our business as we do. July - August 2016 21 OPINION Welcome to Financial Planning Today magazine Welcome to a brand new publication for UK Financial Planners Paraplanners and wealth managers. We talked to many planners to find out what they want to read and we hope you like the result. This first issue is packed with news features technical articles comment and your views. Our feature on the future of Financial Planning and the current shape of the sector begins on p28 based on unique research carried out for Financial Planning Today. Many thanks if you took part in the survey. The answers were both informative and in some cases surprising. One finding which was slightly unexpected was just how positive Financial Planners are about the future of the post-Brexit profession despite the survey having been carried out just after Brexit. Other findings suggest that the sector is generally in rude good health and many are positive about the longterm future. That does not mean there will not be challenges technology for one but it seems most planners believe that technology can be more of an ally than an enemy. Elsewhere in the magazine we have many articles we hope will help make your business even better such as The Client Hunter Inside My Business and many others (see p3 contents). A sincere thank you to all the contributors who submitted such high quality articles. Thanks also to our many supporters and advertisers. This magazine is editorially independent and not affiliated to any professional bodies but we re gratefully to the bodies who have supported this launch. Finally thank you to you our readers for sparing us your valuable time. We appreciate it. We will be developing the magazine over the coming months and we d love to hear your ideas and comments. To send us your view email Feedback The next issue of FP Today will be published in mid-September. In the meantime check our website for daily news kevin.odonnell FPT_Kevin Ros Altmann Why I had to quit role as Pensions Minister Baroness Ros Altman have never considered myself to be a politician I care about policy. However being offered the chance to take on a Ministerial role after the last election as a pensions expert working inside Government I d hoped to have an even better chance to influence policy improve consumer protection and help more people understand pensions. For the past year I ve tried to drive positive long-term pension policy changes from within Government as well as trying to ameliorate some past mistakes which I cautioned against. Unfortunately the restrictions of political office and shortterm political considerations exacerbated by the EU vote prevented much-needed reforms. I d hoped the problems might calm down but the unexpected result means political and economic uncertainty have significantly increased. I fear the new Government will be even less willing to commit to required reforms and will be even more anxious to prevent any Minister from saying what they truly believe. Having left my post I can now speak more freely and am anxious to highlight some key pension policy issues that I hope my successor will take seriously. The successful auto-enrolment programme must not be derailed. We should also reform the current overly-complex pension incentive system. Tax relief is not wellunderstood favours higher earners dispro- I portionately and can leave lower earners seriously disadvantaged. A radical overhaul of pension saving incentives is long overdue but that must not mean turning tax relief on its head and converting pensions into ISAs. We need a one nation pension system fair to all more generous than basic rate tax relief but as a straightforward Government pension contribution (perhaps 1 extra for each 3 contributed to a pension) rather than using the complex tax system. This would finally end the outrageous injustice in our system whereby many of Britain s lowest earners are forced to pay at least 20 per cent more for their pension than higher paid workers because Net Pay Arrangements deny them the tax relief they are entitled to. We really need Lifetime Pensions which have better behavioural incentives to ensure the money does indeed last a lifetime rather than a Lifetime ISA which encourages spending the lot at age 60 with nothing left for later. The new Government must press ahead on the Pensions Bill I ve been working on to ensure unfair exit charges are capped. Improving engagement with pensions and education are needed as well. I ll continue to try to help drive better pensions policy for the future of our ageing population and consider or recommend legislative changes. I ll continue to advise on policies from the House of Lords benches. Baroness Ros Altmann former Pensions Minister Portfolio Publishing 2016 Subscriptions 01895 678629 Advertising 01895 672771 For more details see page 38 Baroness Altmann became Minister for Pensions in May 2015 and resigned in July 2016. Earlier in her career she managed institutional investment portfolios including pension funds for 15 years and advised central banks before leaving to look after her children. She returned as a consultant and policy adviser on pensions and personal finance and an analyst on retirement policy. She was Business Champion for Older Workers in 2014-2015. ros rosaltmann 22 July - August 2016 OPINION Financial Planning Today s Email Inbox Subject Ros Altmann quits as Pensions Minister From Steve Webb director of policy at Royal London Ros Altmann deserves considerable credit for standing up for workplace pensions and challenging the Treasury over its desire to scrap pension tax relief and move to a pensions ISA. The new minister takes over at a time when there s much to be done in pensions. Millions of workers are yet to be auto-enrolled and millions aren t saving enough for retirement. The 2017 review must tackle these issues as well as the pensions crisis affecting the self-employed. We need an end to tax relief being seen as an annual piggy bank to be raided by cash-strapped Chancellors. And we need coherent policy between Treasury and DWP not least when it comes to pensions and ISAs. Let s hope the new ministerial team will have a long tenure and we will not see a return to the revolving ministerial door we ve seen in the past. Subject The FCA s Retirement Outcomes Review From Richard Parkin head of pensions at Fidelity International While it s essential that people get the best value for money we need to recognise that making a withdrawal from your pension is very different from buying an annuity. In the latter case it s absolutely right that people shop around but most workplace pension providers are not charging for withdrawals so the rationale for shopping around is less clear. Another point of concern is that the review does not seem to recognise that drawdown is not just a product but a way of accessing pension savings. A large proportion of our customers are just taking tax-free cash and leaving the rest invested which technically puts them in drawdown. Yet until they start taking income the issues around investment strategy and whether their money will run out need a different approach. The focus should be on the impact of taking lump sum withdrawals from savings and less on the way that this is done. Subject Proposals to expand NEST s remit From Kate Smith head of pensions at Aegon All pension savers should have the opportunity to access the new pension freedoms and it s right that NEST should be able to offer the full retirement income options to its own members. But opening up its retirement income proposition to non-NEST members would change its initial scope considerably and potentially create an uneven regulatory playing field with the private sector. For example flexi access income drawdown products are regulated by the FCA providing valuable protection for consumers. The FCA should be involved in any discussions to expand NEST s retirement income solutions to non-NEST members. We d expect that any extension of NEST s scope beyond its focus on lower earners would have to be fair and take account of the costs faced by commercial organisations. It should be remembered that unlike the pension industry NEST is propped up by government loans allowing it to offer low-cost options. Extending NEST into the wider retirement income market effectively subsidised by the taxpayer will give NEST a competitive advantage. From Tom McPhail head of retirement policy at Hargreaves Lansdown This call for evidence makes sense. The current restrictions on NEST risk leaving its members without the help and support some of them need to make the most of their retirement savings. With the freedoms the rules of the game changed so the services offered by pension providers needed to change too. Commercial pension providers have all already adapted to reflect this NEST now needs to do this too. Brexit boosts cashflow model value Julie Lord former IFP President T he inclusion of lifetime cashflow modelling in Financial Planning businesses seems to be in the balance with some planners believing it to be unnecessarily complex and time consuming. Still not widely used it is loved by planners who use it effectively and by clients whose planners use it to help them secure their future. Now the country has been thown into chaos by Brexit uncertainty and confusion reign and arguably there s never been a greater need to help clients to see what their future might hold and the impact of their financial decisions. The ability to model various what if scenarios showing how things would look if portfolios are decimated or interest rates fall further or inflation escalates or people lose their jobs or fall ill worrying about it all is key to providing reassurance and stability. This in turn enables us to maintain really great client relationships and ultimately successful profitable businesses. I suspect that those who have found it too complicated have not taken the necessary time to set up a simple template system that works for their business. It now takes us less than an hour to create an initial model and less than 15 minutes to update it each year. If potential new clients don t see the value in the modelling I tell them to go down the street to a different adviser and carry on guessing about whether they will ever have enough money to do what they want This week we had a client call to ask whether we could look at his cashflow and tell him whether he could afford to take a redundancy offer. He was delighted when we confirmed that if he did he would not have to go to work again. But this is where things can go very badly wrong if we do not use sensible assumptions. Thus we always plan on a worse case scenario and use very conservative assumptions. I ve no doubts if we are going to grow Financial Planning into a real and highly regarded profession then there ll be a greater focus on lifetime cashflow modelling its correct use and the value it brings to our clients. Julie Lord CFPTM Chartered FCSI Julie is a Chartered Wealth Manager Chartered and Certified Financial Planner at Broadway Financial Planning director at Prestwood and ex-IFP President. JulieL www. 01656 760670 julielordcfp July - August 2016 23 Don t be left in the dark FP Today Financial Planning Today Now Live sign up for our free daily newsletter May 2016 24 INSIDE MY BUSINESS DIANE WEITZ - ASHLEA FINANCIAL PLANNING Diane Weitz (second from left) and her team at Ashlea How we overcame 2008 crash to celebrate 10 years Diane Weitz CFPTM Chartered MCSI tells us her story of how she developed a successful Financial Planning firm and about the big challenges she has navigated to reach a major milestone for the business Diane Weitz s business day FP Today How did you get into the Financial Planning sector Diane Weitz I was originally made aware of the need for Financial Planning when we considered sending our eldest son to private school. I had not been working for some time we had four children and no savings. School fees firms showed little interest and so I joined Hill Samuel in their direct sales force to try and sort out my own school fees plan. When did you start your firm DW I started Ashlea Financial Planning Ltd in 2005 I was keen to make it fee based from the start. I am grateful to Ken Davy of Simply Biz who provided the structure to enable me to become directly authorised with the FCA (FSA then). I knew that I did not want to be part of a network. Being able to make my own decisions about the business was very important to me. You celebrated your firm s 10th anniversary last year. How did it feel and what are your ambitions longer term DW It was exciting to celebrate our 10th anniversary last year. We had a wonderful response from clients and it was great to be able to find a way to say thank you to them for all the support that they had provided over the years. Over 10 years we have grown from just me to having a full time staff of four and two part time people one of whom is my husband who handles all the financial aspects of the business. I am not an empire builder we have a small business which provides a very personal service for our clients. In October 2014 we reached another milestone when I took on Nik Marsh as a second Financial Planner. Nik trained at PwC and had 15 years with Goldman Sachs. He was wanting a career change and chose Financial Planning. He brings a different perspective and it is good to have an injection of fresh ideas to help develop the company. What sort of a company is it and what services does it offer DW We are an independent Financial Planning company. Finding out how clients think and what is really important to them is an essential part of our process. From this information we build a financial plan to map out for them their current situation and identify what needs to happen to enable My Office is at my home and I am usually at my desk by 8am. All days are different 08.00 check e-mails 08.40 Sue arrives and we discuss the day 09.00 Catch up on meeting notes prepare for client meeting 10.30 Client meeting if new client discovery if review meeting catch up on circumstances. Review Truth Cashflow review portfolio 12.00 Pass any updates from the meeting to Sue review the day s post. 13.00 Lunch break with Paul 14.00 Meeting notes checking reports 16.00 catch up on e-mails check letters and reports for the post 17.00 Catch up on research and reading. Prepare for meetings July - August 2016 25 INSIDE MY BUSINESS DIANE WEITZ - ASHLEA FINANCIAL PLANNING them to live the life that they want. Cashflow analysis is an important part of this and clients love seeing their financial situation mapped out in this visual way. It leads to great client engagement and helps to build trust. Review meetings become centred on the financial plan rather than performance of the markets. Market falls are less threatening if the plan is still on track. We offer the full range of services to our clients including mortgages although these seem to be limited to helping client s children as we don t market this. I ve recently become a SOLLA accredited adviser as I feel there s a shortage of good advice for the elderly. How many clients do you have What s the annual turnover DW We have about 150 clients this is growing quite rapidly as Nik brings more clients on board. We have the scope to take on more clients now that we have two advisers and Nik has an active marketing campaign. We are both Chartered Financial Planners and we now both hold the CFPTM licence which gives us the Chartered Wealth Manager status with the CISI. I am considering undergoing the process to become an accredited firm this year. We may also apply for the Corporate Financial Planning Firm status. Our turnover last year was 337 000. I d hope to get this up to 500 000 in the next 18 months. How many Financial Planners and Paraplanners do you have DW We have two Financial Planners and Sue who manages the office and provides support to us. Lauren who came to us as an apprentice two and a half years ago and stayed. In addition Paul my husband works part time to manage our accounts and look after the Gabriel reports and we have Clara who comes in once a week who is helping to develop the marketing strategy. We outsource IT and Compliance. I d expect to take on more admin staff in the next year to help Sue and Lauren. What has been your greatest source of achievement so far DW Reaching the 10-year milestone with the company in a healthy financial position gave me a sense of achievement. This provides a solid base to grow the company over the following years. What has been the biggest hurdle or challenge to overcome DW I started my career in financial services in 1986 in direct sales with Hill Samuel and Diane Weitz group and that the most successful are those that provide some contact with a human as part of the process. It s easy to dismiss this but I think it could be an important development for the future. What is the biggest challenge for you in terms of the FCA and regulation DW Our ethos is to make clients the centre of our practice and to treat them fairly. These form part of the FCA principles and therefore our aims should be aligned. This doesn t always appear to be the case but the FCA are making themselves more visible. Rory Percival is a regular contributor to conferences and I have found the compliance workshops very helpful. moved into the independent sector after three years. The greatest challenge came when I realised that if I wanted to be in a company that followed my ideas of how a Financial Planning company should operate I should set up on my own. This led to the formation of Ashlea Financial Planning in 2005. The financial crisis in 2008 2009 hit us hard. This is the only year in which the company made a loss. Fortunately March 2009 provided the turning point for Ashlea as well as the country. We have now managed to build up reserves to ensure that we can ride out any future financial disasters. What have been the key lessons you have learned at your business so far DW Surround yourself with positive people this helps to overcome any difficulties Look after your staff and make sure that they have opportunities to develop their career too. Be open minded and prepared for change. We live in a world of rapid change and it is good to have the courage to embrace this with open arms. What do you think of robo-advice DW I have been to two conferences recently Money Marketing Technology and ETF. Com Europe. These have changed my views on robo advice and I feel that it may have a place as part of the offering to younger people (in particular the 19-37 age group known as the millennials). Black Rock has a simple investment process that they are white labelling for financial advisers in the USA. If it becomes available in the UK I d like to look into this further. I believe research has shown that an online system providing a low cost investment solution is popular with this age How have you been affected by the rise in the FSCS levy DW Our FSCS levy increased by 50% last year. It is a business expense over which we have no control and for which it is difficult to plan. Reform is essential. I wish I could think of an acceptable solution. What s key to making people aware of the benefits of using a Financial Planner DW It is hard for clients to understand the importance of Financial Planning until they have experienced it. We need to find a way of overcoming their fear of seeking advice. There is usually a life time trigger which encourages people to seek solutions to financial situations which arise. We need to be more approachable and consider ways of being in front of the public so that they know where to go for help. More initiatives like the IFP CISI s Financial Planning Week might eventually bring the message to a wider audience. What s the best thing about being a Financial Planner DW The best thing about being a planner is becoming the trusted friend of clients and being able to help them achieve their aspirations with the confidence that they will have enough money for the rest of their lives. What do you like doing in your spare time outside of work DW My husband and I enjoy opera and like to go to live performances when possible. The cinema productions from the MET and Covent Garden have enabled us to hear more productions in the year. We have a large family with four children and four grandchildren so that keeps us busy in our spare time. Diane Weitz CFPTM Chartered MCSI - founder of Ashlea Financial Planning in Cheltenham Diane founded Ashlea Financial Planning Ltd a fee based practice in 2005. She is an advocate of lifestyle Financial Planning and aims to provide an excellent service to clients using the six step Financial Planning process. She is a Chartered Financial Planner and holder of the Certified Financial Planner licence. In the last year she has also become a SOLLA accredited adviser providing Financial Advice for the elderly. An active member of the Institute of Financial Planning (now the IFP Forum of the CISI) she is has been chairman of the Cotswold Branch for the last five years. diane.weitz Key point 1 Work with positive people this provides the energy to develop the business. Key point 2 Remember that your staff want to develop their careers too. Provide access to appropriate training. 01242 254149 weitzDM Key Point 3 Be open minded and willing to embrace change. 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Registered in England No. 05075441 FUTURE OF FINANCIAL PLANNING A bright and starry future for planning Respondents were optimistic about what is in store for Financial Planning as the future beckons. 28 July - August 2016 FUTURE OF FINANCIAL PLANNING New frontiers Planners expect growth in enterprises as future looks brighter Our Reader Survey shows long-term optimism among planners for the future as professionals give their forecasts on what lies ahead including the rise of technology and Brexit s impact. James Nadal reports. inancial Planning professionals are bullish as they head boldy into the future with an overwhelmingly optimistic outlook on the profession our Reader Survey suggests. About 75% think the sector will grow with 20.4% believing it will expand significantly and 55% saying they expect it to get slightly larger. Nobody thought it would decline significantly with just 6% saying they expected it to decline slightly. Nearly 84% said they expect their own business to grow over the next year. Close to 27% believe it will grow significantly with 57% expecting slight growth. Nobody thought their firms would decline significantly with only 4% expecting a small F drop off and 12% answering that it would stay the same size. Almost 84% of respondents said they were positive about the future of Financial Planning over the next 12 months. Some 55% said they were very positive and 28.5% were slightly positive. Nobody was very negative with just 6% saying they were slightly negative. Over a fifth of respondents said the typical value of one of their clients portfolios was 500 000 to 1million. Some 40% reported the number was 250 000 - 500 000 and just under a quarter said 100 000 to 250 000. Asked how many investment clients they personally managed respondents mainly said 60 fewer than 50 (54%) with 50-100 (32%) being 50 the second most popular option. 40 Thinking about the longer term how do you believe the Financial Planning profession will fare Decline significantly 0.00% Decline slightly 6.12% Stay the same 18.37% Grow significantly 20.41% Bright future Keith Richards Personal Finance Society chief executive told Financial Planning Today The future of Financial Planning is extremely bright. The government has highlighted the value and importance of professional advice by mandating it within its own legislative reform and as the main professional body for the sector we continue to engage in strategies aimed at raising public awareness of the importance of professional advice. The PFS forecast three years ago was that the sector would see a decline in adviser numbers Mr Richards explained. He said Instead we ve seen steady growth in membership at the Personal Finance Society which now has around 36 500 members. Fresh blood Mr Richards cautioned however of the need for new blood to enter the profession. He said The current age demographic means that appropriate success planning will also become an important consideration for many UK advisers. With demand for professional advice continuing to rise I predict that the sector is likely to reach capacity within the next three years. This highlights the importance of attracting new blood into the profession and is why the Personal Finance Society is planning the launch of a new apprenticeship programme. Andy Baker partner and Financial Planner at Equilibrium in Cheshire said his firm was very positive about the future of Financial Planning over the next 12 months. Like the 84% of respondents expecting to grow at least slightly his firm is expected to expand and he said this result showed the sector is in good health. Another positive he cited was that the industry is becoming more and more professional . He said It s also interesting - and provides insight into the relative strength of the industry - that most advisers are expecting to grow their business at a time when the economy as a Continued on page 30 What is the typical value of one of 20 your clients portfolios 10 0 Less than 100 000 100 000 - 250 000 250 001 - 500 000 500 001 - 1m 1.01m - 5m 30 60 50 5.01m (0%) 40 0 30 20 Grow slightly 55.10% 5 10 15 20 % Percent 25 30 35 40 % Percent Thinking about your business do you expect it to grow or decline over the next 12 months Decline slightly 0% Decline slightly 4.08% Stay the same 12.24% Grow significantly 26.53% How many investment clients 0 do you personally manage % Percent 10 60 50 40 30 20 10 0 Fewer than 50 50 - 100 101 - 250 251 500 501 Grow slightly 57.14% With the need for professional advice reaching a higher point than ever and improved consumer access flowing from FAMR there will be a need for adviser growth in the coming years. Keith Richards Personal Finance Society CEO July - August 2016 29 % Percent FUTURE OF FINANCIAL PLANNING Continued from page 29 whole is subject to such uncertainty. He said the fact a new Chancellor Phillip Hammond was taking the reins at the Treasury could be beneficial. He said that opportunities were being created as a result of changes to tax and pension rules with more people needing to seek advice. A new dawn after FAMR A central focus for the Financial Planning sector in the months to come will be the development of rules and recommendations arising from the FAMR. Mr Richards said The Financial Advice Market Review has highlighted that the biggest issue facing the UK market is a lack of access to advice. FAMR will help to address the need to improve consumer access to professional advice providing further opportunities for the sector to meet the consumer need. With the need for professional advice reaching a higher point than ever before and improved consumer access flowing from FAMR there will be a need for adviser growth in the coming years. Guy Myles founder of online Financial Planning firm Flying Colours said The advice gap still exists today and the recommendations of the recent FAMR are clear it s up to innovative businesses to deliver solutions that will close it. It can only be closed by growing the number of consumer choices available for top quality regulated financial advice in a low cost format. This invites newer entrepreneurial companies to use technology to offer high quality personalised advice as well as investment solutions in a more efficient way. In order to truly provide accessible financial advice at affordable levels companies will need to embrace technology at a much faster rate. The industry has to find a way of reducing costs without compromising on customer service. It s great to finally see innovation beginning to blossom in the advice sector but it s vital technology is combined with personalised whole of market independent financial advice from a human. There will doubtless be investment opportunities presented as a result of Brexit as the economic and political implications become clearer. Andy Baker partner and Financial Planner at Equilibrium EU headquarters A future outside the EU The immediate and medium term future will be dominated for many by the implications of Brexit. Some of these could be beneficial Mr Baker said. He said Opportunities to demonstrate value will certainly be presented during periods of market volatility. There will doubtless be investment opportunities presented as a result of Brexit as the economic and political implications become clearer. Because of our discretionary rights we were recently able to significantly reduce property for clients the day following the Brexit vote avoiding being restricted by the gate applied by many property funds. Andrew Elson CFPTM owner of Accredited Financial Planning firm Beaufort (Yorkshire) said Following Brexit hopefully the regulators can concentrate on the UK market and the best outcomes for our clients rather than blaming their regulations on EU directives. Some of the further changes to regulations due to come into effect from the EU in future years which appear of little benefit to our clients might not come into force allowing us to focus our time on our clients not ticking boxes. The future is clouded Sandy Robertson of Accredited Financial What is a challenge and will continue to be so is determining the assumptions required to underpin our financial models and therefore long term 10-20 year forecasts for all our clients. Sandy Robertson CFPTM MD Acumen Financial Planning Planning Firm Acumen in Aberdeen said his concerns about leaving the EU were longer term rather than immediate. He said Our Financial Planners daily work will not be more difficult because of the uncertainty caused by Brexit. What is a challenge and will continue to be so is determining the assumptions required to underpin our financial models and therefore long term 10-20 year forecasts for all our clients. Here are examples of what we are considering right now in relation to assumptions required to model the next 25-30 years will Brexit cause income taxes to increase or decrease from current levels over time cause UK inflation to increase or decrease over time cause central banks to prolong or reduce reliance on QE provide UK equities advantages or disadvantages relative to global equities. He said his firm will be doing the level best to lay before clients their financial future as we see it and provide our opinion and guidance as to what they require to do to keep on track in order to absorb the impact of Brexit . Ex-planner Harry Katz said despite being retired his phone was ringing off the hook the day after the vote from concerned ex-clients friends and acquaintances. He suggested these were the times when planners could earn their corn. He said Now is the time to talk to clients and hold their hands. Tamsin Caine CFPTM Financial Planner at Smart Financial in Altrincham said I m sure Brexit will have an impact but I don t think anyone knows what that will be until we are further down the road. After all we have not even begun negotiations for our exit never mind our future trade relationships with other EU countries. Therefore we will continue with our current strategy to plan for our clients future lifestyle. Financial Planning Today s Reader Survey was carried out from 6 July 2016 to 13 July 2017 and 103 people responded. Further details from the survey will be published in our September edition and will also be available online at More Financial Planning and Brexit on pages 11 & 12 More FaceTime than face-to-face time as video grows more popular More than six out of ten planners expect to be using video technology to change client engagement in the next three years. That was the conclusion from our survey which found about 65% answering they would use video more including 2% who said they believed most or all meetings would be done via video. Some 26.5% of respondents said they expected to use video technology more to save time instead of having face-to-face client meetings. Some 36.7% said while they will primarily talking face to face with clients they will use video more than they are now. We asked Looking three years ahead how do you expect video technology to change your client engagement 8% said they d be using it much more while 18.3% said they d be using it a little more. Nearly 35% said they thought there wouldn t be any change in how much they use it. Skype FaceTime and other video services are set to become more popular 30 July - August 2016 FUTURE OF FINANCIAL PLANNING Robo-advisers could become even more of a trend in the next year Robo the way to go as survey shows planners are keen As automated advice services get the backing of the regulator and the Financial Advice Market Review Financial Planning Today s research showed strong interest from planners in developing their own models. early four in ten Financial Planning professionals could be entering the robo-adviser market in the next 12 months Financial Planning Today s research suggests. In our Reader Survey some 38% said they ve either already set up a robo-service (8%) or will definitely launch or will investigate the possibility of doing so (28%). Some 62% said they have no interest in it. N FAMR boost for automated advice The sector has been boosted this year after the authors of the Financial Advice Market Review instructed the FCA to help firms that are developing robo-advice services. Large-scale automated advice models should be brought to market more rapidly with FCA help FAMR recommended. Its report stated that technology can help create a more engaging cost-effective advice market . Planners hot on robo Many advisers and planners have been making moves into the robo area over the last two years including Chartered Financial Planner Keith Churchouse CFPTM who has established SaidSo. Regarding the survey result he said The 38% is of note because they realise that in part online only propositions in whatever format and delivery these are used (example video-conference) may work and no one has the answer yet. The public will decide but you have to be in the market to gain traction. He said I believe that there is and always will be space for both traditional and online automated advice solutions. I think the main point here is market share of both. Ignoring the alternative solution from both sides is short-sighted and if a D2C online only offering is not for the 62% indicated (in the FP Today survey) then make sure their current proposition is up to date modern and easily accessible. Robo regulation unit Through Project Innovate an FCA unit will aim to help firms develop their automated advice models. The FAMR report stated While many consumers will continue to seek face-to-face advice technology-based models are poised for growth. FAMR wants to support the development of mass market automated advice models that have the potential to bridge the advice gap whether they are fully automated hybrid (with human interaction in the process) or tools to bring efficiencies to the face-toface. PFS chief executive Keith Richards said The results of the survey are not surprising as few advisers see the emergence of technology as a threat to their business. Within the 38% of advisers who say they ve incorporated technology into their operations there are many examples where firms have been able to increase access to their services and deliver a simplified solution to clients. He said The concept of utilising technology to streamline or enhance advice processes has been evolving over the past two decades with many advisers acknowledging the efficiencies and effectiveness it can add to their overall client proposition. There is however a level of confusion created by the Continued on page 32 How likely are you to launch a robo or automated-advice service in the next 12 months Have already launched (or are preparing) such a service 9.30% Will definitely launch (or take steps to launch) 2.33% Will take no steps not interested 60.47% Will investigate the possibillity of launching such a service 27.91% % Percent I believe that there is and always will be space for both traditional and online automated advice solutions. I think the main point here is the market share of both. Keith Churchouse director SaidSo and Chapters Financial July - August 2016 31 FUTURE OF FINANCIAL PLANNING Continued from page 31 use of the term robo-advice which can mean different things to different people. He said As the sector reaches capacity in the coming years the use of technology will become an important way of streamlining and enhancing advice processes and addressing less complex advice needs. Friend or foe Mr Richards said The use of technology and robo-advice should not be seen as a substitute or threat to traditional advice but rather a complementary service which can in many cases help to address less complex advice needs. Technology will become more important as increasing demand for professional advice puts further strain on the capacity of the sector to meet that demand in the longer term. He said The majority of advisers see growth in the use of technology as ultimately leading to an increase in demand for professional advice and few believe that established client relationships will be affected by the increased use of robo-advice. The appropriate use of technology will encourage consumers to engage and access different forms of advice at different life trigger points and it should therefore be seen as an opportunity for the sector rather than a threat. Mr Churchouse has written a new book - Scared of Something Different Journey of disruption & innovation - in which he discusses these issues. He said If innovation is not for you -- and you know it will require a lot of energy and focus -- then you will also be aware that the world moves on and your existing business will need to reflect this. Is a modernisation programme in order to move your business forward into the next decade Standing still is not an effective option if you want to remain profitable into the future. Feel free to disagree with this statement but it is my experience that the business headwinds you will face may make your current rituals ineffective in a short time. I am not sorry to make the challenge that in my mind standing still is the same as gradually moving backwards. It s like a business inflation factor that ebbs at your expense. Modernisation and business evolution must be embraced. An alternative is to be swallowed by a consolidator who snaps up your business for a fraction of its real value and modernises it probably without you. Robo warnings Guy Myles founder and chief executive of Flying Colours an online Financial Planning firm warned about the downsides saying Online robo-adviser guidance firms are able to offer quick-fix advice which can be helpful for younger investors with simpler needs increasing wider demand for Financial Planning. But those nearer retirement or with more complex needs must consider that the scope of this guidance is limited many assumptions are made with potentially disastrous consequences as certain aspects of assets liabilities and tax circumstances may not be taken into account. There was also a warning from the authors of a new report on robo-advice. They warned the FCA it should urgently apply the brakes on robo-advisers and systematically review the sector. Financially unviable SCM Direct which carried out the research heavily criticised the business models of robo propositions saying its research indicated many were financially unviable. Rather than being the silver bullet the FCA and Treasury are hoping for in terms of bridging the advice gap the automated advice services may create more problems than they solve the company claimed. UK robo advisers are wired to lose money and may go bust before ever acquiring the sizeable assets under management required to ensure their sustainability the firm said in its report. The research estimated that the average UK robo-adviser receives revenue of just 147.50 pa per account but the cost of acquisition is at least 180 pa per account plus additional annual business costs. The report stated These additional recurring costs even if they ever achieved the same economies of scale as much larger competitors amount to 130 pa per account. Thus it costs them 180 to make just 17.50 net each year. One well known UK roboadviser firm reported costs in its latest available accounts of 9.42 for every 1 of revenue. Gina Miller co-founder of SCM Direct said Our conclusion is that there is little evidence of robust innovation as new roboadvisers appear to be fundamentally financially unviable and or seem to be regularly flouting key FCA rules. It s time for the FCA to step in and protect consumers from the various issues raised in our report which their US regulatory peers are already addressing. Beware a purely technology driven future Campbell Edgar Chartered FCSI head of Financial Planning at the CISI looks at what lies ahead have just been called by a banker working in the SME tech area who had been pitched an idea and asked me my opinion. The idea is that if a planner wealth manager adviser had access to their customer s domestic bank account details (read only) they could using appropriate algorithms automatically calculate the client s monthly average surplus of net income over expenditure. I asked what happens then He said that average surplus is with the client s prior authorisation could then be taken from the customer s bank account and then applied to their financial plan. He explained those funds are then invested in line with the customer s prioritised goals with their asset allocation based upon their attitude to risk coupled with timeframes for each goal taking into account the accessibility of each product wrapper and its alignment with those goals. The funds are reviewed regularly rebalanced automatically to re-align with risk criteria discussed above and re-investment takes place when the bulk trade order is processed at 10.30 the next morning. I told him it sounds exciting technologically but brilliant as it sounds asked what happens next He explained when the customer is within two months of a pre-determined goal the programme organises the exact amount of cash to be extracted from the portfolio in the most tax-efficient means possible and has it transferred 32 July - August 2016 I back to their bank account. And then Nothing he said adding the algorithm delivers the right amount of money into the right account at the right time. I asked him where the client is involved in this process to which he responded We don t care. I told him Don t back it. Why Because the processes are clinical dispassionate and relatively easy. Real people or individual opinionated prejudiced clients as I would describe them have real problems are passionate about what they want to do and are not easy. His prot g has missed the point which is that Financial Planning involves people who care namely clients who care about achieving their goals and His idea missed the Financial Planners who care for those clients. point which is that Some argue the future of Financial Financial Planning Planning is driven by technology. Its involves people who origins were after all based on the then new spreadsheets which enabled planners to care. help clients interpret an uncertain future. Campbell Edgar The technology was a tool then and will continue to be so to be used with care by FCSI CISI planners who really care for their clients. INVESTMENT INSIDER Property fund turmoil will take some time to correct The sudden suspension of a number of open-ended property funds recently caused shockwaves in the City. Rob Gleeson of FE Analytics looks at the fall out and the implications for property fund investment. ollowing the Brexit announcement the property market has been thrown into turmoil. The uncertainty created by the vote has put a halt to transactions as companies have stopped any expansion programmes. Also the negative outlook for UK commercial property over the mediumterm has prompted some investors to take flight from the asset class entirely. As buildings are not readily tradable there can be a significant delay in liquidating assets and hasty sales can often lead to funds accepting lower prices for their buildings in a fire sale. For this reason many UK property funds have been suspending trading in order to buy time to work out what their buildings are worth then sell them in such a way as to not make huge losses. The funds that remained open have reduced their estimates of what their portfolios are worth resulting in large drops in value. Other fund groups have also levied heavy exit penalties to deter flight-risk investors. The fact that there is no reliable way to determine what a building is worth without selling it is further compounding the problem. As the value of many property investments is uncertain surveyors and agents are having to try to work out what the impact of events will be including future projections with London and the City in particular the most at risk. Price discovery is going to be problematic as F the value of commercial property is likely to involve some macro projection to calculate potential void rates and the value of the income stream is likely to be affected by inflation and interest rates. A property analyst would struggle to estimate those with certainty. FE Research has been aware of this liquidity risk for some time and this has been the main reason for us not investing in physical property funds in any of our model portfolios. Instead we have been investing in HSBC Open Global Property a fund of funds and a passive fund Blackrock Global Property Securities Equity Tracker. We decided from the beginning not to invest in physical property for liquidity reasons which is proving prudent today. It will probably be months rather than weeks before we see an end to the spate of suspensions in the property fund sector. If the root of the issue is solely liquidity then the suspensions will be in place for as long as it takes to find buyers for the properties. If instead it is to avoid stressed asset sales and thus large losses it could be a while before the market settles down. No one knows what the full impact of Brexit will have on the UK property market but the assumption is that it will be negative. Until some clarity can be found the moment a fund reopens it will be instantly under pressure. My guess is that trading will be challenging until we see an uptake in the market. Most deleted (sold) funds in property sector on FE Analytics since 23 June to 11 July Fund UK Property PAIF UK Property AIF Feeder of Property Portfolio UK Property Feeder UK Property Property Trust Property Trust UK Property Feeder Property Portfolio UK Real Estate Accumulation Feeder UK Real Estate Standard Life Investments UK Property PAIF Feeder Henderson UK Property Authorised Trust Threadneedle Feeder Property Share Aberdeen Standard Life Investments UK Property Global Property Securities First State Standard Life Investments UK Property Accumulation Feeder Trust Open Global Property HSBC UK Property Aberdeen Global Real Estate Securities Schroder Manager Henderson Threadneedle M&G L&G L&G Aberdeen Aviva Inv Aberdeen M&G Standard Life Investments Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Rob Gleeson CFA is Head of FE Research Rob Gleeson is head of FE Research at FE Analytics and a regular writer and contributor to a number of financial and specialist publications. After graduating in Economics from Swansea University Rob joined FE in 2005. He gained the CFA charter in 2009 and currently heads FE s discretionary fund management and investment research business. He became a fund analyst in 2008 and produced research that was published on Trustnet and in the trade press as well as national newspapers. clientsupport (0)20 7534 7600 July - August 2016 33 INVESTMENT INSIDER Pension investments reach new heights at 8billion mark Intermediary database provider Equifax Touchstone reported that excluding transfers pension inflows were 4.3billion in the first quarter of 2016 up 0.5 billion (12.7%) on Q4 2015. The data which the firm says covers more than 90% of the UK s life and pensions companies shows investment in lifetime pension income (annuities) for the quarter dropped by 60.4m (11.4%) while flexible drawdown investments increased to 972m up 11.6m on the previous quarter. Individual stakeholder pensions saw the largest inflows in the quarter soaring 121.5% to 60.9million. The quarter also saw new premiums (excluding transfers) driven into personal pensions and Sipps increased to 3.8 billion up 0.4billion (12%) on Q4 2015 and up 0.85billion (28.2%) year on year. Geoff Greensmith director at Equifax Touchstone said Pension investments have seen significant growth in the first quarter of the year. The suspension of all trading in the Standard Life Investments UK Real Estate Fund will end as soon as practicable the company has said. Officials said exceptional market circumstances were behind the suspension. The suspension decision which affected many other property funds was taken after an increase in redemption requests as a result of uncertainty for the UK commercial real estate market following the Brexit vote. Standard Life Investments released a statement on 5 July which read The suspension will end as soon as practicable and will be formally reviewed at least every 28 days. The fund invests in a mix of prime commercial real estate assets from across the office retail industrial and other sectors. Approval for the suspension was received from Citibank Europe plc in its capacity as depositary for the fund. SLI property fund suspension to end when practicable Laith Khalaf senior analyst at Hargreaves Lansdown said Property funds are clearly under pressure as a result of the Brexit vote and we (have seen) a wave of investors being unable to liquidate their property funds quickly. This is part of the problem with investing in open-ended property funds and one of the reasons we don t recommend them to investors. Commercial property remains under pressure Fourie Brexit is good and bad Opportunities along with uncertainty for investment clients hile the coming weeks and months will lead to a period of soul-searching for Financial Planners along with the rest of us history has repeatedly demonstrated that markets do rebound and that periods of volatility can bring investment opportunities. Prior to this we had been sceptical of equity markets recent strength and had positioned our portfolios conservatively believing a market correction could be on the way. This referendum result has simply been the straw that broke the camel s back . With all of this in mind our core view is that in this new environment we are actually likely to find good longer-term investment opportunities. Our view of what lies ahead is this sterling will continue to bear the brunt acting as it does like a shock absorber. While we expect it to continue to protect other asset classes it is likely to stay weak for some time giving rise to winners and losers. In this case tourism manufacturers and exporters will be the benefactors of a weak pound while those relying on imports will see prices rise. Either way an exit from the EU will not be further complicated by an exit from the euro. The macro landscape has become more uncertain as global economies struggle to understand the ramifications of the leave outcome from the EU referendum while facing low levels of real economic growth. Despite some positive economic surprises in June such as the recent ISM manufacturing survey these have been overshadowed by the Brexit vote and the associated uncertainty Going into this period of uncertainty our own cautious globally diversified stance has served us well though shorter term we are evalu This referendum ating opportunities in sectors such as UK homebuilders UK banks and other UK-focused businesses. We are however at this stage in no rush result has simply to sell our global businesses that we are invested in in order to buy into been the straw that a UK domestic recovery. Longer term central banks will be forced to broke the camel s proceed with extreme caution. Overall Brexit will do nothing to improve economic growth not just back . at home but abroad as well. Businesses are likely to delay investment Pieter Fourie CA decisions and adopt a wait and see approach. Much will depend on the deal the UK government strikes with the EU once Article 50 of the (SA) CFA Lisbon Treaty is invoked. W Charles Stanley to expand Financial Planning arm Charles Stanley says it plans to become the UK s leading wealth manager by 2020 and will launch a separate Financial Planning arm as part of this strategy. Reporting pre-tax losses for the year down from 6.1m to 300 000 the company said it would be divided into four main operating divisions following a strategic review. These are Investment Management Services Asset Management Financial Planning and Charles Stanley Direct. The company says that the newly separated Financial Planning division s first task will be to review its operating and pricing models. Charles Stanley plans to recruit additional Financial Planners and improve productivity by improving operating processes utilised to transact and process business. Charles Stanley has 450 professionals located in 25 offices throughout the UK. Pieter Fourie CA (SA) CFA Head of Global Equites & Lead Portfolio Manager As Head of Global Equities Pieter Fourie is the Lead Portfolio Manager for the SPW Global High Quality Equity and the Clime International Equity funds having joined the firm in mid 2012. Current assets under management managed by the investment team in direct global and UK equity mandates is 600m within a larger client base of 2.2bn. 34 July - August 2016 DFM DIRECTORY A guide to our DFM listings T hese tables show details of over 180 discretionary solutions that have shown interest in retail advisers. Defaqto lists three types of discretionary solutions Bespoke where client and adviser sit down with the discretionary manager and between them build a portfolio unique to that client. Due to the individual nature of these portfolios minimum entry levels can be quite high. In reality most bespoke portfolios in the retail space will be tailored. In other words there is likely to be a centrally-built model portfolio at the heart with client-specific changes to a small percentage of the portfolio. Managed Portfolio Services purchased direct from a discretionary manager discretionary managers run a range of portfolios to a strict mandate. It is up to the client and adviser to select the most suitable. Clients in a particular portfolio will have the same portfolio. Managed Portfolio Services that are hosted on a platforms almost all the service elements of these propositions are provided by the platform. The discretionary firm s sole job is to manage the money to mandate in the best way they can. The DFM fees should be commensurately lower but don t forget to factor in the platform charges. The table also shows the published standard fee rate at a sample level of investment. Readers can sign up for the Defaqto regular newsletter advisers Provider Albert E Sharp Albert E Sharp Albert E Sharp Alpha Portfolio Management Alpha Portfolio Management Alpha Portfolio Management Alpha Portfolio Management Alpha Portfolio Management Apollo Multi Asset Management Arbuthnot Latham & Co Ltd Arbuthnot Latham & Co Ltd Beaufort IM Bordier & Cie (UK) PLC Bordier & Cie (UK) PLC Bordier & Cie (UK) PLC Brewin Dolphin Brewin Dolphin Brooks Macdonald Brooks Macdonald Brooks Macdonald Brooks Macdonald Brown Shipley Brown Shipley Canaccord Genuity WM Canaccord Genuity WM Canaccord Genuity WM Canaccord Genuity WM Canaccord Genuity WM Cazenove Capital Management Charles Stanley & Co Ltd Charles Stanley & Co Ltd Charles Stanley & Co Ltd Charles Stanley & Co Ltd Charles Stanley Pan Asset Charles Stanley Pan Asset Church House Inv. Management Church House Inv. Management City Asset Management City Asset Management Clarion Investment Management Close Brothers AM Close Brothers AM Close Brothers AM Close Brothers AM Close Brothers AM Cornelian Asset Managers Ltd Cornelian Asset Managers Ltd Cornelian Asset Managers Ltd EQ Investors EQ Investors Product Bespoke Portfolio Service Model Portfolio Service Direct Model Portfolio Service Platform Bespoke Portfolio Service - Charging Option 1 Bespoke Portfolio Service - Charging Option 2 Managed Portfolio Service - Collectives - Platform Managed Portfolio Service - Collectives only Managed Portfolio Service-Direct Equity Collective Athena Controlled Risk Discretionary - Platform Collective Investment Services Direct Investment Services Discretionary Portfolio Management - Platform Bordier (UK) Managed Portfolio Service Platform Managed Portfolio Service Wealth Management Service Discretionary Service Managed Portfolio Service Bespoke Portfolio Service - Option 1 Bespoke Portfolio Service - Option 2 Managed Portfolio Service Platform Managed Portfolio Service Platform Model Portfolio Service Premium Portfolio Service - Fee plus comm. Discretionary Portfolio Management GPS Optimized Portfolio - Direct GPS Optimized Portfolio - Platform MPS (Managed Portfolio Service) MPS (Managed Portfolio Service) - Platform Discretionary Service Bespoke Discretionary Management - Standard Fee Collectives Portfolio Service Collectives Portfolio Service - Platform DFM Model Portfolio Service PanASSET Model Portfolio PanDYNAMIC Model Portfolio Church House Advantage Managed Portfolio Service Discretionary Management Service Bespoke Discretionary Management Platform Based Model Portfolios Discretionary Investment Management Bespoke Portfolios Option 1 (Clean Fee) Bespoke Portfolios Option 2 (Fee Dealing) Discretionary Managed Services Managed Portfolio Service Managed Portfolio Service - Platform Discretionary Investment Management Services Managed Portfolio Service Managed Portfolio Service - Platform Absolute Return Portfolios Positive Impact Portfolios No of Portfolio Options ns ns ns na na 10 12 8 10 10 8 42 5 5 na na 5 na na 10 8 12 na na 5 5 7 7 na na 12 12 3 6 7 6 na na 6 13 na na 5 4 4 na 6 10 1 5 Group AUM ( bn) ns ns ns 0.149 0.149 0.149 0.149 0.149 0.4 0.7 0.7 0.502 7.08 7.08 7.08 30.7 30.7 7.41 7.41 7.41 7.41 4.3 4.3 11.58 11.58 11.58 11.58 11.58 319.5 20 20 20 20 20 20 0.743 0.743 0.438 0.438 0.125 9.1 9.1 9.1 9.1 9.1 0.716 0.716 0.716 0.5 0.5 Date of Svce Fee Group AUM pa 250k Inv % ns ns ns ns ns ns 31-May-16 1 31-May-16 0.25 31-May-16 0.4 31-May-16 0.65 31-May-16 0.8 31-Aug-14 0.51 30-Jun-15 na 30-Jun-15 na 30-Apr-16 0.3 31-May-15 0.75 31-May-15 0.3 31-May-15 1.2 31-Mar-15 1 31-Mar-15 0.3 30-Jun-15 0.75 30-Jun-15 0.75 30-Jun-15 0.75 30-Jun-15 0.4 30-Apr-15 0.3 30-Apr-15 0.75 30-Jun-15 0.75 30-Jun-15 0.8 30-Jun-15 0.5 30-Jun-15 0.75 30-Jun-15 0.5 31-Mar-15 0.85 30-Sep-15 0.85 30-Sep-15 0.75 30-Sep-15 0.3 30-Sep-15 0.75 30-Sep-15 0.2 30-Sep-15 0.2 30-Sep-15 0.25 30-Sep-15 1 30-Jun-16 0.65 30-Jun-16 0.25 30-Jun-15 0.75 31-Jan-16 na 31-Jan-16 na 31-Jan-16 1 31-Jan-16 0.3 31-Jan-16 0.3 31-May-15 na 31-May-15 0.87 31-May-15 0.3 30-Sep-15 0.35 30-Sep-15 0.35 Trans. Trans. Min Invest. Min Fee Fee % Bespoke Invest. MPS ns ns 0 na ns ns na 0 ns ns na 0 na na 100000 na na 1.5 100000 na na na na 0 na na na 20000 na na na 50000 na na na 5000 na na na 400000 na na na 400000 na na na 0 na na na 20000 na na na 1000 50 na 250000 na na na 150000 na na na na 2000 15 1 200000 na 15 na 200000 na na na na 20000 na na na 1000 na na na 1200 25 na 250000 na 30 na 250000 na na na na 100000 na na na 0 30 na na 100000 na na na 0 25 na 200000 na na na 80000 na na na na 30000 na na na 0 na na na 50000 na na na 0 na na na 0 na 0.9 na 1000 15 0.5 250000 na na 1 150000 na na na na 0 na na na 0 na na 1000000 na na 1.5 1000000 na na 0.1 na 100000 na 0.1 na 30000 na na na 30000 na 0.2 300000 na na na na 100000 na na na 2000 na na na 10000 na na na 10000 Web Link financial-advisers financial-advisers am am am am ifas adviser intermediaries intermediaries intermediaries intermediaries July - August 2016 35 DFM DIRECTORY Provider European Invest. Management European Invest. Management Fairstone Private Wealth Fairstone Private Wealth Fieldings Fieldings GAM London GAM London GHC Capital Markets GHC Capital Markets GHC Capital Markets Groupe Financiere Hottinger & Co Hargreave Hale Hawksmoor Inv. Management Hawksmoor Inv. Management Heartwood IM Heartwood IM Heartwood IM Investec Wealth & Investment Investec Wealth & Investment Investec Wealth & Investment IPS Capital LLP IPS Capital LLP James Brearley & Sons James Brearley & Sons James Brearley & Sons James Brearley & Sons James Hambro & Partners LLP James Hambro & Partners LLP JM Finn & Co JM Finn & Co King & Shaxson Capital Limited King & Shaxson Capital Limited Kleinwort Benson Kleinwort Benson Kleinwort Benson LGT Vestra LLP LGT Vestra LLP LGT Vestra LLP Liontrust Investment Solutions Liontrust Investment Solutions London and Capital London and Capital London and Capital McInroy & Wood MitonOptimal Portfolio Mgmt (CI) Mole Valley Asset Management Morningstar IM Europe Mountstone Partners Ltd Myddleton Croft Myddleton Croft Nedbank Private Wealth Newscape Capital Group Novia Financial plc OCM Asset Management OCM Asset Management OCM Asset Management Octopus Investments Octopus Investments Old Mutual Wealth Old Mutual Wealth Parallel Investment Management Parmenion Capital Partners LLP Pilling & Co Stockbrokers Ltd Pilling & Co Stockbrokers Ltd Premier Asset Management Premier Asset Management Price Bailey Prospect Wealth Management Product Bespoke Discretionary Management Model Portfolio Service - MOSAIC Platform Managed Portfolio Service Managed Portfolio Service - Platform Bespoke Discretionary Management - Option 1 Bespoke Discretionary Management - Option 2 Discretionary Fund Management Managed Portfolios Service - Platform Bespoke Portfolio Service (BPS) Dynamic Core Satellite (DCS) Optimised Portfolio Service (OPS) Discretionary Fund Management Discretionary Investment Management Bespoke Discretionary Portfolio Magmt Service The Model Portfolio Service Discretionary Portfolio Management Platform Model Portfolios - Ascentric Platform Model Portfolios - Fusion and Novia Discretionary Fund Management Fee Commission Discretionary Fund Management Fee Only Master Portfolio Service IPS Discretionary Investment Management Service IPS Managed Portfolio Service Portfolio Management Service-(1)Inclusive Bespoke Portfolio Management Service-(1)Inclusive Model Portfolio Mgmt Service-(2)Transaction Model Portfolio Management Srvc-(2)Transaction Bespoke Bespoke Portfolio - Fee Only Bespoke Portfolio - Fee plus Commission Discretionary Management Service Fee & Commission Discretionary Management Service Fee only Personal Discretionary Service Platform Ethical Portfolios Bespoke Portfolio Service Discretionary Portfolio Service Managed Portfolio Strategies Discretionary Investment Management Services Model Portfolio Service Platform Model Portfolio Service Managed Portfolio Service - Platform Wealth Solutions Service Discretionary Investment Management Discretionary Managed Portfolios Global Model Portfolio Service Discretionary Investment Management Service Niche Discretionary Fund Management Bespoke Discretionary Portfolios Morningstar Managed Portfolios Bespoke Portfolio Management Bespoke Portfolio Service Model Portfolio Service - Platform Discretionary Investment Management Service Model Portfolio Service Copia Capital Management Discretionary Fund Management - Bespoke Discretionary Fund Management - Model Discretionary Fund Management - Model - Platform Octopus Portfolio Manager (OPM) Direct Octopus Portfolio Manager (OPM) Platform WealthSelect Managed Portfolio Service WealthSelect Managed Portfolio Service - Platform Model Portfolio Service Discretionary Management Service Discretionary Management Service Pilling Ideal Portfolio Premier Private Client Port - Model - Platform Premier Private Client Portfolio - Model Portfolio Management Service - Platform Model Portfolio Service No of Portfolio Options na 5 13 13 ns ns 5 5 na 6 7 ns na na 6 6 4 4 na na 6 na 3 na 7 7 na na na na na na 5 na na 6 na 6 6 22 27 na 10 5 na ns na 16 na na 8 4 11 10 na 4 4 10 8 16 16 9 110 ns ns 13 13 6 6 Group AUM ( bn) 1.3 1.3 2.35 2.35 ns ns 84.5 84.5 0.39 0.39 0.39 ns 4.3 0.548 0.548 2.4 2.4 2.4 27.58 27.58 27.58 0.425 0.425 0.21 0.21 0.21 0.21 1.7 1.7 7.8 7.8 1.95 1.95 5.4 5.4 5.4 5.24 5.24 5.24 4.8 4.8 2.38 2.38 2.38 1.1 ns 0.016 135.7 0.108 0.072 0.072 11.8 0.35 3.5 0.205 0.205 0.205 5.3 5.3 82.5 82.5 0.23 1.83 ns ns 3.9 3.9 0.525 0.15 Date of Group AUM 01-Jun-15 01-Jun-15 30-Oct-15 30-Oct-15 ns ns 30-Jun-15 30-Jun-15 31-May-15 31-May-15 31-May-15 ns 31-Mar-15 31-May-16 31-May-16 31-May-15 31-May-15 31-May-15 31-Mar-16 31-Mar-15 31-Mar-15 31-Dec-14 31-Dec-14 30-Apr-15 30-Apr-15 30-Apr-15 30-Apr-15 30-Apr-15 30-Apr-15 30-Jun-15 30-Jun-15 31-Mar-15 31-Mar-15 31-Dec-14 31-Dec-14 31-Dec-14 30-Sep-15 30-Sep-15 30-Sep-15 31-Mar-16 31-Mar-16 31-Mar-15 31-Mar-15 31-Mar-15 31-Jul-15 ns 01-Apr-16 31-Dec-15 01-Jun-16 31-Jul-15 31-Jul-15 31-Jan-15 31-May-15 01-Jun-15 10-Apr-15 10-Apr-15 10-Apr-15 30-Apr-15 30-Apr-15 31-Dec-14 31-Dec-14 31-May-16 30-Jun-15 ns ns 31-May-15 31-May-15 01-May-16 31-Mar-15 Svce Fee pa 250k Inv % 1 0.6 0.4 0.4 ns ns 0.7 0.2 0.75 0.75 0.75 ns 1 0.75 0.3 na 0.4 0.3 0.75 1 0.85 na 0.3 1 1 0.6 0.6 na na 0.75 1.5 0.65 0.5 na 1 0.35 0.75 0.25 0.25 0.3 0.32 na 0.25 1 1 ns 0.6 0.3 na 0.75 0.6 na 0.35 0.3 0.49 0.35 0.35 0.65 0 0 0 0.3 0.3 ns ns 0 1 0.35 0.75 Trans. Trans. Min Invest. Min Fee Fee % Bespoke Invest. MPS na 1 100000 na na na na 0 0 0 na 1000 na na na 1000 ns ns 0 na ns ns 0 na na na na 250000 na na na 0 na 0.75 100000 na na na na 25000 na 0.75 na 50000 ns ns 0 na 40 na 0 na 30 na 0 na na na na 0 na na na 500000 na na na 0 na na na 0 25 1 0 na 25 na 0 na na na na 50000 na 0.2 500000 na na na na 0 na na 50000 na na na na 50000 15 na na 50000 15 na 50000 na na na 500000 na na 1 500000 na 20 1 100000 na 20 na 100000 na na 1 250000 na na na na 0 na na 3000000 na na na 250000 na na na na 100000 na na 250000 na na na na 50000 na na na 0 na na na 1000 na na na 1000 na na 1000000 na na na na 0 na na na 0 na na 0 na ns ns 0 na 25 0.3 15240 na na na na 0 na na 500000 na na 0.5 60000 na na na na 0 na na na 500000 na na na 0 na na na 0 2 0.05 5000 na 2 0.05 na 0 na na na 0 na na na 0 na na na 0 na na na 0 na na na 0 na na na 0 na 0.9 na 50 ns ns 0 na ns ns na 0 na na na 0 na na na 50000 na na na 1000 na 1 na 75000 Web Link intermediaries advisers professional-advisors professional-advisors Investment Investment StandardLife.aspx wealthsolutionsservice adviser adviser adviser UK intermediaries intermediaries ifa home 36 July - August 2016 DFM DIRECTORY No of Group Date of Svce Fee Trans. Trans. Min Invest. Min Web Link Portfolio AUM Group pa 250k Fee Fee % Bespoke Invest. Options ( bn) AUM Inv % MPS Bespoke Portfolio na 17 31-Mar-15 1 na na 250000 na Psigma Investment Management Managed Portfolio Service 6 17 31-Mar-15 0.5 na na na 50000 Psigma Investment Management Psigma Platform Portfolios 5 17 31-Mar-15 0.35 na na na 0 Psigma Investment Management Bespoke Discretionary Service na 0.1 31-Mar-15 0.9 na na 200000 na Quartet Capital Partners LLP Discretionary Investment Management - Option 1 na 17.2 30-Jun-15 0.75 40 1.2 200000 na Quilter Cheviot Discretionary Investment Management - Option 2 na 17.2 30-Jun-15 1 na na 200000 na Quilter Cheviot Managed Portfolio Service 11 17.2 30-Jun-15 0.85 na na na 25000 Quilter Cheviot Managed Portfolio Service - Platform 6 17.2 30-Jun-15 0.3 na na na 0 Quilter Cheviot Bespoke Portfolio Service na 28.9 05-Apr-15 1.2 na na 100000 na Rathbone IM Bespoke Portfolio Service - Conventional Fee na 0.197 31-Mar-16 1.25 na na 15000 na professional-advisers RC Brown IM Plc Bespoke Portfolio Service - Performance Fee na 0.197 31-Mar-16 0.625 na na 15000 na professional-advisers RC Brown IM Plc Bespoke Discretionary - Fee Commission na 1.5 31-Mar-15 0.5 na 0.5 50000 na Redmayne-Bentley Bespoke Discretionary - Fee only na 1.5 31-Mar-15 0.95 na na 50000 na Redmayne-Bentley Discretionary Management Services 7 0.285 31-May-16 0.5 na na na 50000 Richmond House Inv. Services Ltd RD Signature Bespoke Portfolio Service Fee comm na 1.017 31-Mar-15 0 na 1.5 100000 na Rowan Dartington & Co Limited RD Signature Bespoke Portfolio Service Fee only na 1.017 31-Mar-15 0.75 na na 100000 na Rowan Dartington & Co Limited RD Signature Collective Port Service - Platform 7 1.017 31-Mar-15 0.35 na na na 0 Rowan Dartington & Co Limited RD Signature Collective Portfolio Service 7 1.017 31-Mar-15 0.35 na na na 10000 Rowan Dartington & Co Limited RD Signature Hybrid Portfolio Service 6 1.017 31-Mar-15 0.8 na na na 50000 Rowan Dartington & Co Limited Bespoke Discretionary Portfolio Management ns ns ns ns ns ns 0 na Ruffer LLP Bespoke Management Service ns ns ns ns ns ns 0 na S C Davies & Co DFM-on-Wrap 3 0.5 30-Jun-15 1 na na na 1000 Saltus Investment Managers Direct DFM 3 0.5 30-Jun-15 1 na na na 50000 Saltus Investment Managers Sanlam Portfolio Solutions 16 40.6 31-Mar-15 0.35 na na na 0 Sanlam FOUR Investments UK Bespoke Portfolio Service na 66 31-Dec-14 1 na 0.2 250000 na Sanlam Private Wealth Managed Funds Portfolio Service 11 66 31-Dec-14 1 na na na 100000 Sanlam Private Wealth Sarasin Model Portfolios 5 13.4 31-Mar-16 0.25 na na na 50000 Sarasin & Partners Discretionary Management Service na 9.51 30-Apr-15 0.25 na na 200000 na Seven Investment Management Model Portfolio Service 6 9.51 30-Apr-15 0.25 na na na 25000 Seven Investment Management Model Portfolio Service - Platform 6 9.51 30-Apr-15 0.25 na na na 1000 Seven Investment Management Managed Portfolio Service 6 0.105 31-Dec-15 0.6 12 na na 2500 Shipman Investment Managers Managed Portfolio Service (MPS) 6 16.2 31-Mar-15 0.3 na na na 0 Smith & Williamson Portfolio Investment Account - Option 1 na 16.2 31-Mar-15 1 na na 100000 na Smith & Williamson Portfolio Investment Account - Option 2 na 16.2 31-Mar-15 0.75 na 0.6 100000 na Smith & Williamson Bespoke Portfolio Management na 302.1 05-Aug-15 na na na 500000 na Standard Life Wealth Managed Portfolio Service 10 302.1 05-Aug-15 0.3 na na na 100000 adviser Standard Life Wealth 12.5 na na 7500 Focus Model Portfolio 4 0.233 27-Nov-15 0.5 TAM Asset Management Premier Full Discretionary Service na 0.233 27-Nov-15 1 na 1 100000 na TAM Asset Management TAM Ethical Portfolio 5 0.233 27-Nov-15 0.65 15 na na 10000 TAM Asset Management TAM Ethical Portfolio - Platform 5 0.233 27-Nov-15 0.4 na na na 10000 TAM Asset Management TAM Sharia Portfolio 5 0.233 27-Nov-15 1 na 1 na 10000 TAM Asset Management Tatton Strategic Managed Portfolio Service (SMPS) 24 2.04 12-Jun-15 0.2 na na na 0 Tatton Investment Management Central Investment Proposition-Partner Profiles ns ns ns ns ns ns na 0 Tavistock Wealth Central Investment Proposition-Tavistock Profiles ns ns ns ns ns ns na 0 Tavistock Wealth Personal Investment Portfolio Service - (Fee only) na 10.1 31-May-15 0.9 na na 150000 na Thesis Asset Management Thesis Model Portfolio Service 19 10.1 31-May-15 0.75 na na na 25000 Thesis Asset Management Thesis Model Portfolio Service - Platform 19 10.1 31-May-15 0.4 na na na 10000 Thesis Asset Management Discretionary Investment Management na 3.06 31-Mar-16 1 na na 250000 na Thomas Miller Investment Ltd Model Portfolio Service 6 3.06 31-Mar-16 0.3 na na na 20000 Thomas Miller Investment Ltd Investment Management Service na 9.4 31-Dec-15 0.75 na na 200000 na Tilney for Interrmediaries Managed Portfolio Service - Direct 9 9.4 31-Dec-15 0.5 na na na 50000 Tilney for Interrmediaries Managed Portfolio Service - Platform 9 9.4 31-Dec-15 0.3 na na na 0 Tilney for Interrmediaries Bespoke Portfolio Solution na 0.26 31-Dec-15 1 na na 50000 na Vertem Asset Management Bespoke Portfolio Service - Fee Only na 2.8 31-May-15 1 17.5 na 100000 na W H Ireland Bespoke Portfolio Service - Fee plus commission na 2.8 31-May-15 0.5 17.5 1.95 100000 na W H Ireland Actively Managed Portfolio Service - RTI 10 3.8 31-Mar-15 0.8 na na na 25000 Walker Crips Actively Managed Portfolio Service - RTIP 5 3.8 31-Mar-15 0.3 na na na 0 Walker Crips Alpha r2 8 3.8 31-Mar-15 0.7 na na na 25000 Walker Crips Alpha r2 Platform 8 3.8 31-Mar-15 0.3 na na na 2000 Walker Crips Walker Crips Bespoke Portfolios na 3.8 31-Mar-15 0.8 na na 100000 na Walker Crips Discretionary Management Services na 4.6 31-Mar-15 na na na 500000 na financial-advisers Waverton IM Model Portfolios based on Platform 6 4.6 31-Mar-15 0.4 na na na 1 financial-advisers Waverton IM Ltd Investment Solutions Portfolio - Bespoke na 0.188 29-May-15 na na na 500000 na Wellian Investment Solutions Investment Solutions Portfolio - Model 9 0.188 29-May-15 0.75 na na na 25000 Wellian Investment Solutions Investment Solutions Portfolio - Platform 9 0.188 29-May-15 0.35 na na na 0 Wellian Investment Solutions Portfolio Management Service - Direct 8 0.335 31-Jul-15 0.75 12.5 na na 3000 Whitechurch Securities Ltd Portfolio Management Service - Platform 6 0.335 31-Jul-15 0.5 na na na 3000 Whitechurch Securities Ltd Prestige Investment Management Service na 0.335 31-Jul-15 0.45 17.5 0.25 50000 na Whitechurch Securities Ltd Notes Table kindly provided by Defaqto and show most if not all Discretionary Fund Management providers working with UK financial advisers. Inclusion is no recommendation. For further information and more DFM data please contact Defaqto. Please inform editor if not notice any errors or amendments required. Tables have been edited. Tables created 15 July 2016 approx. Provider Product July - August 2016 37 DIARY Brendan Foster with CJ Ujah and Adelle Tracey who are both GB athletes Financial Planning Today magazine is published by Portfolio Publishing. Financial Planning Today is an independent magazine written for professional Financial Planners Paraplanners Wealth Managers and other professionals working in the Financial Planning sphere. EDITORIAL Publisher & Group Editor Kevin O Donnell 01895 678629 kevin.odonnell Deputy Editor James Nadal 01895 676658 james.nadal Art & Production Jason Taylor jason.taylor Email address for news releases newsdesk Editorial Feedback Complaints Contact Editor at email address above ADVERTISING Advertising Enquiries 01895 672771 sales GENERAL ENQUIRIES General enquiries Louise Glover 01895 672771 louise.glover PUBLISHING Published by Portfolio Publishing Village House 13-15 Swakeleys Road Ickenham London UB10 8DF. 01895 678629 Subscriber Enquiries 01895 672771 Targeted Audience 7 000 UK Financial Planners Paraplanners and Wealth Managers. Financial Planning Today website reaches 4 500 users per month (Google Analytics) Finance teams follow in Usain Bolt s footsteps Staff from investment and finance firms channeled their inner Mo Farahs and donned their running shoes as hundreds of finance professionals raced on the track at London s Olympic Stadium. Firms such as Towerbrook Capital Partners and Aviva Investors took part in the first Great Team relay on 14 July. The 4 x 5 km team relay race took place at the stadium in East London built for London s 2012 Olympics allowing runners to follow in the footsteps of legendary athletes Usain Bolt and Jessica Ennis Hill. About 7 000 runners fought it out to become the fastest investment firm in London and nearly 5 000 supporters attended the event at the venue which will soon become the home of Premier League football club West Ham United this summer. Former long-distance runner Brendan Foster who won a Bronze medal in the 10 000 metres at the 1976 Olympic Games was chairman of the company responsible for the event. He said It s fantastic that the city s financial sector much of it based not far from Stratford in Canary Wharf and City of London had the opportunity to experience its own Olympic moment just weeks from the Rio Games. Financial Planning Today is published bi-monthly (6 times a year). A 12 month digital subscription to Financial Planning Today is 36.00 ex VAT. All rights are reserved and no part of this publication may be reproduced without the advance written permission of the publisher. For copyright or syndication enquiries please contact the publisher. Registered Office 5 Jardine House Harrovian Business Village Harrow Middx HA1 3EX. Company Registration No. 5542523. For business address see Publishing details above. Financial Planning Today welcomes contributions but contact must be made with the editorial team before submitting manuscripts. This magazine is intended entirely for professional use by qualified professional advisers and is not intended for consumer use or distribution. Views opinions or claims are not necessarily subscribed to by Portfolio Publishing. Portfolio does not perform regulatory due diligence on authors or submissions and can accept no responsibility for loss occasioned to any person on taking or refraining from action as a result of the material herein. Portfolio Publishing Ltd. Caspar Barry to help Financial Planners James Bond film s poker adviser takes centre stage at Financial Planning event this October A former adviser on a James Bond film will offer tips to Financial Planners on dealing with risk and uncertainty. Caspar Berry an ex-professional poker player gave guidance to the makers of the Casino Royale movie starring Daniel Craig. He is among the line up for the CISI Financial Planning conference from 3-5 October. Mr Berry moved to Las Vegas aged 25 to become a professional poker player and earned a living doing so for most of the next three years. He said As a pro poker player and poker adviser on Casino Royale managing risk formed a constant part of my life for many years. Before all this however I studied economics at Cambridge University and built and sold my own company to a PLC. What I saw in the mechanics of poker was a relevance to business that was not fully understood or realised by most. He said he has given over 1 200 speeches and seminars to people working for the world s biggest companies such as Google IBM Esso KPMG Orange ASDA and Walmart. NEXT ISSUE of Financial Planning Today 19 Sept 38 July - August 2016 PER LIC ENCE 125 SAVE O VER The Compliance Gold Standard Synaptic Research Suite for compliance teams Synaptic Product & Fund Synaptic Comparator Whole of market product and fund research full suitability reporting Detailed price analysis for platforms products and funds including RIY calculations ATRQ and Risk Rated funds and portfolios Model investment outcomes for new and existing holdings. 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