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Private & Confidential Name Address Date Dear Name As part of your review / During our discussions, we identified that you wanted to discuss making a further payment to your current/ new Openwork / Zurich …..enter name of platform account. We discussed whether there had been any changes to your personal or financial circumstances and objectives since our last insert – review / meeting / discussions etc. You confirmed that there haven’t been any changes /…OR. explain any changes, including any change in objective that has resulted in the recommendation of a new tax wrapper. Attitude to Risk You agreed that your attitude to risk remains as / has changed to, Cautious / Balanced / Adventurous / Speculative which is an appropriate description, considering the level of risk you are prepared to take with any investment you make. For more information on the Openwork risk categories, please refer to ‘Making More of your Money’ booklet. INCLUDE IF LAT/REPLACEMENT Why move your existing investment(s) I carefully considered your existing select product(s) in particular whether they meet your current investment objectives and at what cost. Taking this into account, together with any benefits you may lose, alternatives available and any costs of moving, I recommended that you should move your existing arrangements. The outcome of my analysis can be found in more detail in appendix B. INCLUDE IF PENSION LAT / REPLACEMENT, CLIENT IS UNDER AGE 55 AND EXIT PENALTY IS GREATER THAN 1% Maximum pension exit penalty cap From 31 March 2017, the Financial Conduct Authority (FCA) and DWP have limited the early exit charges you pay to 1% when moving your pension fund to another provider. This means that if you had waited until age 55 to transfer your pension funds, the exit penalty would be £…enter amount instead of £…enter amount. You understand the difference and are happy to accept the higher exit penalty because….. give details to support why the client is willing to proceed now – e.g. it’s a negligible difference with no material impact or specify the other reasons etc To help meet your aims and objectives, I recommended that you invest further into the following: Total to be invested Zurich/Openwork Platform Existing Platform Account Top Up – new money with or without LAT with Initial Advice fee v1.2 6 April 2017 £ 1 of 9 New contributions INCLUDE IF NEW MONEY CONTRIBUTIONS RECOMMENDED Platform account Regular Frequency £ Lump sum £ ADD ROW(S) TO TABLE WHERE MULTIPLE ACCOUNTS BEING RECOMMENDED New Employer contributions INCLUDE IF EMPLOYER CONTRIBUTIONS TO PENSION Platform account Regular Retirement/Pension Account £ Frequency Lump sum £ Assets to be transferred to Platform Platform account Previous provider Product Lump sum £ ADD ROW(S) TO TABLE WHERE MULTIPLE PLANS BEING TRANSFERRED IF NEW TAX WRAPPER INCLUDE RELEVANT DESCRIPTOR PARAGRAPH – see appendix C Investment solution As there has been no change in your attitude to risk, we agreed that you would continue to invest in the fund(s) I previously recommended / you chose to meet your investment strategy and objectives. This is / These are…enter the name of fund(s) previously selected. INCLUDE IF NO CHANGE TO FUNDS You should refer to the fund information previously provided for details of the investment objectives and associated risks. INCLUDE IF FUND CHOICE IS CHANGING As there has been a change in your attitude to risk, we agreed what would be the most appropriate investment strategy to meet your objectives and I have recommended that you invest in.....enter the name of your fund(s) being recommended. INCLUDE IF OMNIS MANAGED PORTFOLIO SERVICE (ZURICH ONLY) Omnis Select ATR Managed Portfolio Service I recommended this managed portfolio service which aims to offer you access to the best and most consistent fund managers in the business. It manages risk by ensuring that you do not put all your eggs in one basket and allows you to invest in a portfolio of investments that: is actively managed to reduce or minimise the risk you take with your investment in times of uncertainty based on the day to day assessment of market conditions gives the potential for the most consistent level of return as well as benefit from short term opportunities and has the different fund holdings adjusted to ensure the mix of funds stay in line with the amount of risk you’re comfortable taking Service charge The expected cost of the Omnis Managed Portfolio Service is made up of two parts: Firstly, the explicit cost of providing the management of your portfolio, as well as the monthly updates, quarterly round ups and an annual report. This is 0.25% plus VAT a year. Existing Platform Account Top Up – new money with or without LAT with Initial Advice fee v1.2 6 April 2017 2 of 9 Secondly, the underlying fund management charges, which will vary as a result of the active management of the portfolio and any adjustments made to the different fund holdings. Should there be insufficient un-invested cash to meet the payment of the charges, Zurich will deduct the cost for this service by selling down the relevant assets in accordance with the Platform Accounts: Platform Account Sell down of assets ISA Proportionate disinvestment across all funds Investment Account Least volatile stock Retirement Account Least volatile stock DELETE ROW AS APPROPRIATE You confirmed that you are willing to pay for this service by signing the Omnis Managed Portfolio Service Declaration. Please refer to the Omnis Managed Portfolio Service Brochure I gave you for further details about the service I recommended. This explains how the service works, how you’ll be kept informed about the markets and changes to your portfolio as well as the associated risks. INCLUDE IF GRAPHENE MODEL PORTFOLIO Select recommended portfolio I recommended this portfolio/combination of portfolios which aim to offer you cost-effective access to the best and most consistent fund managers in the business. It manages risk by ensuring that you do not put all your eggs in one basket and automatically rebalances your portfolio so that the risk remains right for you now and in the future I recommended the option which offers: select portfolio INCLUDE IF OTHER RECOMMENDED FUNDS Select other recommended fund I recommended ….set out full reasons for the specific fund selection. INCLUDE FOR ALL RECOMMENDED FUNDS (NOT FOR OMNIS MANAGED PORTFOLIO SERVICES) Please refer to the fund information I gave you for further details about the funds I recommended. This will explain the investment objectives and the associated risks. Risks We reviewed the continuing risks associated with your enter name of existing platform account(s) as well as the benefits. You are fully aware of all of the risks and the ongoing charges, as well as the fees you are paying for the service you receive. For full details of my original Openwork / Zurich enter name of existing platform account(s) recommendation, the benefits and associated risk, please refer my Suitability Report dated enter date of original report. Other important considerations As part of our discussions, we also considered and agreed the following: INCLUDE IF ISA ALLOWANCE HAS NOT BEEN FULLY USED Individual Savings Account (ISA) Allowance Existing Platform Account Top Up – new money with or without LAT with Initial Advice fee v1.2 6 April 2017 3 of 9 An Individual Savings Account is one of the most tax efficient investments available for you to invest in. You have not used your full ISA allowance for this year and £enter amount can still be used. Any unused ISA Allowance cannot be carried forward to the next tax year if it’s not fully utilised. Taxation and Legislation changes I explained the taxation implications of my recommendation and confirmed that this area will be reviewed as part of my ongoing advice service. Nothing in this letter should be construed as the provision of specific tax advice. Information contained in this letter concerning taxation and related matters are based on Openwork’s understanding of the present law. UK Government reserves the right to amend the preferential treatment of any investment, pension or trust arrangement in the future. My service & remuneration We agreed that you would pay an initial fee of £ enter total initial fee for the new amount you’re investing with an ongoing fee of £ enter fixed yearly amount or total amount for 1st years of ongoing fees for the top up a year. INCLUDE IF LAT/ REPLACEMENT It’s important to note that where my advice includes moving an existing investment, the initial fee amount will vary based on the actual amount of funds received. INCLUDE IF % ONGOING SERVICE AGREED The ongoing fee will vary each year and could increase if the fund grows in value. The actual amount deducted will depend on the performance and value of the underlying funds you are investing in. You understand that …..insert one of the following: INCLUDE IF ONGOING SERVICE FEE AGREED….my ongoing service commitment will continue to help ensure your investments remain in line with your objectives both now and in the future. INCLUDE IF NO ONGOING SERVICE FEE AGREED…any future advice you receive will have to be paid for on an ad-hoc basis. Openwork’s commitment It is important to reiterate that Openwork is committed to providing financial advice which is suitable for your needs based on the information that you have given. Openwork guarantees to act in accordance with all consumer rights in the event of any dispute. We intend to deliver high-quality, suitable advice and if we don’t, we’ll put it right. Important documents As part of my recommendation, I reviewed the following important documents with you as well as those shown in the covering letter: Illustrations for recommended investments/Charges information Fund Fact Sheet(s) and / or Key Investor Information Document(s)( If applicable ) Include name of any additional documents given to the client INCLUDE IF APPROPRIATE As you selected to access some of the documentation electronically, I would confirm that these can be found at: Openwork.uk.com/wrap INCLUDE IF ZURICH PLATFORM I also explained that you will have full online access to the important Zurich documents now that your Zurich Intermediary Platform has been set up. Existing Platform Account Top Up – new money with or without LAT with Initial Advice fee v1.2 6 April 2017 4 of 9 Insert closing paragraph Yours sincerely Adviser Name + Role Existing Platform Account Top Up – new money with or without LAT with Initial Advice fee v1.2 6 April 2017 5 of 9 INCLUDE IF LAT / REPLACEMENT Appendix B - Understanding your existing investments & pensions savings As outlined above, I recommended that you move existing investments as part of my advice. There are some important considerations which you need to be aware of and so I have outlined below the reasons for my advice and what this means for you. INCLUDE IF LAT ONLY Please read this section in conjunction with any Client Report and fund assessment reports I gave you. Reason for my recommendation to move your existing investment(s) SELECT AS APPROPRIATE OR SUMMARISE THE OVERALL REASONS FOR YOUR RECOMMENDATION TO MOVE This investment no longer meets your objectives because ...explain why including what options were considered and why amending the existing investment is no longer appropriate INCLUDE IF PENSION DEATH BENEFITS…you wanted to benefit from pension savings that can be: passed down family generations under a pension tax wrapper – sometimes known as ‘Family Pensions’ retained in a taxed advantaged environment until such time they’re needed passed down to the next generation on the nominee’s or successor’s death if not needed in their lifetime used to provide flexible income as and when needed, paid tax free if the predecessor dies before age 75 INCLUDE IF PENSION LIFESTYLE FUND…you wanted to benefit from investing your pension savings in a portfolio / fund / blend of funds that can offer greater investment growth potential. As you do not intend to buy an annuity or seek a guaranteed income in the future, remaining in a pension fund that gradually moves the investment to cash to offset the risk ahead of your retirement age will not offer the investment growth you are looking for. You did consider the possibilities of moving to a suitable alternative fund within the existing pension but confirmed that you did not want to be responsible for making your own investment decisions. The level of risk is no longer appropriate for your financial plans because... explain product/fund risk mis-match and what options were considered/discounted with current plan The investment is no longer suitable for your tax position because..explain why an existing investment is no longer appropriate and headline benefits of new recommendation You can achieve your investment objectives in a more cost-effective way by moving this investment because...explain cost differential You want to consolidate your existing investments in order to achieve cost-effective access to the most suitable investment wrappers. You want to be able to agree an overall investment approach for all of your investments and have the ability to change and diversify your investments as your circumstances or market conditions change. Cannot be used in isolation for a more expensive solution or where only one investment is moved CLIENT AGED 53 OR OVER Help you manage your future spending / access strategy...demonstrate and justify why moving to platform and the future options available, along with the service they’ll receive, will be of benefit to the client Existing Platform Account Top Up – new money with or without LAT with Initial Advice fee v1.2 6 April 2017 6 of 9 Existing plan considerations REPEAT THIS TABLE FOR ALL PLANS BEING MOVED Provider / Product Charges Charges are an important factor as ultimately the costs associated with an investment will affect the amount you get back. IF LAT - The enclosed Client Report confirms that the new plan has lower / higher similar charges IF NON LAT – I compared the costs of your existing investment versus the new solution and you can find details in the comparison below: Provider/Product Running costs Fund management costs Existing investment New investment initial charges / allocation rates / annual charges / admin fees etc initial fund charges / bid offer spread / annual charges / fund rebates / other expenses etc initial charges / allocation rates / annual charges / admin fees etc initial fund charges / bid offer spread / annual charges / fund rebates / other expenses etc IF HIGHER CHARGES (LAT AND NON LAT) Although the charges will be higher going forward I recommended that you continue with the new investment because…explain why additional charges are justified/what features/benefits of the new investment outweigh the additional cost and are not available from the existing investment INCLUDE IF HIGHER CHARGES & PENSION DEATH BENEFITS ONLY…the way the pension benefits can be paid on death, in addition to any potential future income requirements, is your main priority and feel that having all available options definitely outweighs the additional costs you now have to pay. INCLUDE IF HIGHER CHARGES & PENSION LIFESTYLE FUNDS ONLY…the way the pension lifestyle fund works, and how you intend to access your pension savings in the future, no longer suits your investment strategy and objectives. You feel that having funds fully invested and not moving to cash the closer you get to taking your pension benefits definitely outweighs the additional costs you now have to pay. Existing Platform Account Top Up – new money with or without LAT with Initial Advice fee v1.2 6 April 2017 7 of 9 Existing plan considerations SELECT AS APPROPRIATE Provider / Product Quality / Performance The fund(s) you are leaving behind are performing well against the sector average. However, I recommended that you continue with the new investment because…explain what features/benefits of the new investment outweigh the decision to stay with well performing funds which are not available from the existing investment. The performance of the investment has been poor. This can be shown by <provide summary of substantiated performance analysis against sector> Penalties /Lost benefits/guarantees You will incur a penalty of £amount as a result of moving your investment. However, I recommended that you continue with the new investment because…explain why it’s still appropriate for the client to move their investment despite the charge You will lose insert all lost benefits/guarantees as a result of moving this investment. However, I recommended that you continue with the new investment because explain why it’s still appropriate for the client to move their investment despite the loss of benefits/guarantees Pension Earmarking Order I identified that an earmarking order applies to this pension which will transfer to your new investment. However, I recommended that you continue with the new investment because give details of your discussions with the client about how this will impact their pension planning both now and in the future. Transferring a pension whilst in ill health You have confirmed that you are in ill health and we discussed that HMRC take the view that if you (knowing you are in ill health), make a pension transfer and die within 2 years of the transfer, a chargeable lifetime transfer can arise. This means that the whole transfer value could be deemed as reducing the value of your estate and potentially be liable to IHT. However, I recommended that you continue with the new investment because….. give details of your discussions with the client about any potential IHT liability as a result of transferring their pension, what this will mean to them and how they feel. Impact on taxation, allowances or any other means tested benefits INCLUDE IF TAXATION IMPLICATIONS Whilst I cannot provide specific tax advice, based on the calculations we discussed, you are likely to incur a tax liability of £amount as a result of moving your investment. However, I recommend that you continue with my recommendations because…explain why it’s still appropriate for the client to move their investment despite the tax liability INCLUDE IF ALLOWANCES AFFECTED My recommendation is likely to impact on your select allowances affected. However, I recommended that you continue with the new investment because…explain the extent of the impact and why it’s still appropriate for the client to move their investment despite the impact INCLUDE IF MEANS TESTED BENEFITS AFFECTED As a result of my recommendations…explain any impact on means tested benefits, or risks such as bond moving to another tax wrapper which will be assessed for any means tested benefits Existing Platform Account Top Up – new money with or without LAT with Initial Advice fee v1.2 6 April 2017 8 of 9 DELETE THIS PAGE ONCE REPORT COMPLETED SELECT WRAPPER(S) AS APPROPRIATE APPENDIX C - Tax Wrapper Descriptor Individual Savings Account (ISA) It is one of the most tax efficient ways for you to invest and allows you to access funds at any time. There is no fixed term but the amount you can invest each year is limited. INCLUDE IF ISA TO BE FUNDED EACH YEAR BY DISINVESTMENT We agreed that your annual ISA allowance would be maximised each year by topping up from funds held in your Select product. Investment Account Although not as tax efficient as an Individual Savings Plan (ISA), you can make a certain amount of gain each year before you have to pay capital gains tax. It has no fixed term and the amount you can invest is not limited. Pension / Retirement Account A tax-efficient way to invest that has the potential to benefit from tax relief on your contributions. A proportion of your fund will be available, tax free when you wish to take benefits and you have flexible access to your funds from age 55. INCLUDE IF APPROPRIATE & OPENWORK PLATFORM Discretionary Trust The pension has been written in trust using a Discretionary Trust drawn up by your Solicitor. This will ensure that upon your death the benefits are paid more quickly and will normally avoid any inheritance tax liability. INCLUDE IF APPROPRIATE & ZURICH PLATFORM Discretionary Trust The pension has been written in trust using a Discretionary Trust. This will ensure that upon your death the benefits are paid more quickly and will normally avoid any inheritance tax liability. It allows the payment of any lump sum death benefits and there’s no provision for paying the proceeds on death in any other way. The trust isn’t designed to be revoked and you will need to seek professional legal advice to see if anything could be done. Workplace Pension We established that Select as appropriate Give details of your discussions covering the above and how this impacted on your advice. Please note that where the client is a member of an employer pension you will need to cover why they are not topping up including why not transfer an existing pension plan to the employer’s scheme. AQT/RPS approval is required for any advice where the client is not joining or opting out of an employers’ scheme Onshore Investment Bond An investment bond allows withdrawals of up to 5% per year (for up to 20 years) without generating a liability to UK income tax. It gives you control over when any tax is paid and can be placed in a Trust. Trusts provide a number of ways of reducing how much Inheritance tax must be paid on your death. Offshore Investment Bond An investment bond allows withdrawals of up to 5% per year (for up to 20 years) without generating a liability to UK income tax. This bond is not subject to corporation tax on any gains made within the fund when compared to the onshore bond. Put simply, they have the potential for better returns. IMPORTANT: REFER TO MAIN SUITABILITY REPORT TEMPLATE FOR TRUST WORDING IF INVESTMENT BOND TO BE WITHIN A TRUST Existing Platform Account Top Up – new money with or without LAT with Initial Advice fee v1.2 6 April 2017 9 of 9