Building on strong foundations (PDF) by ps94506


A Tenet Group Publication                                        issue 29 / autumn 2008

                                           Help to grow your
                                                               grow and develop
                                           Support to help you                     u
                                                              d we’ll even help yo
                                           your business – an
                                                                e’s right!
                                           sell up when the tim
                                                               to be in your shoes
                                            We wouldn’t want
                                            well, actually, we w
                                                                hits the road to show
                                            My Future Finance
                                                                 ork for you and help
                                            you how we can w
                                            build value in your

                                            Autumn makeover                         s
                                                                Member Extranet ha
                                            The award winning                     u
SPECIAL FEATURES                                               designed to give yo
                                            been rebuilt and re
Cooking for a cause                         even more
Connected brings you three recipe
dishes taken from the ‘By George...                           OTHER FEATURES
It's Scrummy’ Cookbook
                                                              Confused consumers
Creating the right image                                      need you!
Does your identity do you justice?                            Find out what’s on consumers’
                                                              minds and how you can make
                                                              sure they get the real facts
                                                              Losing out to cash?
                                                              With consumer confidence low,
                                                              many are sticking to cash –
                                                              but there are alternatives
                                                              Have you seen the new and
                                                              improved Elite?
                                                              New Providers, new rates –
                                                              and its now Whole of Market!

           Building on
   strong foundations
                         We make sure you have the right support in place
                                          to move your business forward
                                                                                     issue 29 autumn 2008                                       welcome - 03

           Foreword                                                    6        Resilience will win through

        from editor
                                                                                Simon Hudson is optimistic
                                                                                about the future

                                                                       7        The ‘wear your shoes
                                                                                UK’ tour
   When writing my editorial for Connected, I am always                         Find out how we can work
looking for a tenuous link – a theme that I can focus on that                   for you
encompasses the general content of the issue, which has
previously compared the makeover undergone by Connected
to that of one David Beckham, through to the change in
                                                                       10 Develop and grow your
                                                                                Academy’s, recruitment
weather and changing needs of advisers and consumers alike –
                                                                                support and succession planning
I did say tenuous!
   Well, this time its no different, as I try to shoehorn everything
under the all encompassing header of Evolution…                        29 Extranet gets a face-lift
                                                                                Rebuilt and redesigned for
   The member Extranet has for some time been the ideal                         optimum delivery
platform from which to delivery support, after all, its one, all
encompassing platform, that can serve several thousand people
and over the years it has evolved (anyone spot that coming?)

                                                                              what’s in
to meet the changing needs of its audience but to also allow us
to position new initiatives as they become available. The latest
evolution saw the launch of a completely new site earlier this

                                                                              his issue...
month, which I hope you are finding beneficial, full details of
which can be found on page 29.
   The most obvious one to put under the tag of evolution is
that of an IFA, evolving to meet the changing needs of
consumers and the industry within which we operate, you only
have to look at RDR and TCF to name but 2 recent
developments. To counter this, we have a special feature on
page 10 which looks at how we can support your development
through our academy, growth through our recruitment service
and now, right the way to the end, with a new succession
planning service.
   Beyond this, you will find (I hope) some interesting facts on
just what is going through the minds of today’s consumer and
                                                                       12        Cooking for a cause...
                                                                                 Connected brings you three
                                                                                 recipe dishes taken from the
indeed what you can do to take advantage of this on page 8.
                                                                                 ‘By George... It's Scrummy’
   Finally, as part of our internal evolution (OK, last one – I
promise), we are taking one of our own functions on a bit of a
tour, find out just what we’re planning with our in house adviser
service on page 7.                                                     20        Investment Special
                                                                                 Solutions for today’s
   Right, that’s me done for this issue, I wonder what I could                   investment market
use for the year end edition, that comes out at the end of the
                                                                       30        Creating the right image
                                                                                 Does your identity do you justice?
Richard Ardron Head of Group Marketing                                                                                                                30
  Editor Richard Ardron                                                Published quarterly by   Connected Magazine is for internal purposes only and is not
                                                                       Tenet Group Limited      intended as an advertisement. As a result this should not be issued
  Assistant Editor Caroline Taylor                                     Network House,           in any form to clients. Not all the products in this feature are the
                                                                       Lister Hill,             responsibility of the Tenet Group Limited.
  Production Open Door Design 0113 270 1600                            Horsforth,               Terms and Conditions. Although every effort has been made to ensure the accuracy of the
                                                                       Leeds,                   information contained in this publication, The Tenet Group cannot accept responsibility for
                                                                                                any errors it may contain. The Tenet Group cannot be held responsible for the loss or damage
                                                                       LS18 5AZ                 of any material, solicited or unsolicited. No reproduction of any part of this publication, in any
  Connected - a Tenet Group publication                                Tel 0113 239 0011
                                                                                                form or by any means, without prior written consent from The Tenet Group. The views
                                                                                                expressed in this publication do not necessarily reflect those of the advertisers or the
                                                                       Fax 0113 258 6959        publishers.
                                                                        issue 29 autumn 2008            welcome - 05

                    Welcome                                     8    Confused consumers
                                                                     What’s on their mind and
   In the last edition of Connected I talked about a number          how can you help?
of initiatives that were under way and it is pleasing to see
positive progress in many key areas.
   Following Mark Decker’s restructuring announcement
                                                                15   Come and join us
                                                                     Details of some key events          08
within the Compliance and T&C departments new                        coming your way
coaching courses were made available for those advisers
wishing to develop new skill sets or simply refresh existing
ones. The courses are proving to be very popular.
                                                                16   Regulation matters
                                                                     An update on TCF progress
                                                                     and requirements and
   Plans have been approved for the next upgrade of Office-
                                                                     changes at Tenet
Net which means that the key development priorities
outlined by the Focus Group will be embedded in the next
release. This includes the new document storage facilities
for which piloting will begin later this year’.
                                                                19   E-identity
                                                                     Electronic identification
                                                                     service to save you time
   The new style PDMs have proved to be very popular, in
particular the round table sessions. The next round takes a
further departure from the norm with the introduction of

                                                                     what’s in
Networking PDMs providing a fast- moving and extremely
interactive forum dominated by the round table

                                                                    this issue...
   The recruitment team had another excellent quarter
with many Members benefiting from their FREE service….
remember to contact your SDM if you require details of
their service.
   Richard Ardron’s team have been working hard to
upgrade and refresh the Extranet and they have certainly
delivered real improvements in layout, content and
   Sinfonia has been launched and already a number of           32   Non-investment Special
                                                                     A look at recent developments,
Member firms have embraced the significant benefits                  including the re-launch of Elite
provided by this unique proposition. Alongside the launch
of Sinfonia we have taken the opportunity to clarify the
overall CLEAR investment proposition and to explain             35   New team, new promises              19
                                                                     What can you expect from
where we think Sinfonia could fit in. Apart from the new             commissions and the new
reward scheme and nil commission retention the                       Business Support team?
proposition also brings with it a free version of the Dynamic
Planner investment planning tool!
   Clearly we are operating in challenging market conditions    38   Retirement Special
                                                                     Pension specialists highlight
but it is at times like this that clients need clear guidance        opportunities in the - and -
from professional advisers and our job is to ensure we               retirement market
provide the professional support and innovation necessary
to ensure your success.
   As always your feedback is welcomed….enjoy this edition
of Connected.

Steve Jones Membership Director
                                                                Want to contribute?
                                                                                   If you would like to be featured in
                                                                                   a forthcoming edition of Connected,
                                                                                   please give me a call on 0113 2390011
                                                                                   or email me at:
 06 - industry landscape                        issue 29 autumn 2008

Resilience will win through

                                              n my last article I wrote   enough to invest in what is often a very cheap market are doing so
                                              about the resilience of     in a very conservative manner leading to much smaller case sizes.
                                              advisers and I have to         As a consequence the average case size across the Group has
                                              say, without blowing our    come down 30%. I can hear my first Sales Manager telling me
                              own trumpet, Tenet Group is a pretty        that’s no problem; you just have to work 30% harder! Is it ever that
                              resilient beast as well and in times like   simple?!
                              this, when pressure comes to bear on           So we have set out to try and provide you with a range of
                              business in general, you begin to           products which are considerably less likely to concern a
                              appreciate that the plans we as a           conservative investor. You will find these on the front pages of our
                              Group steadfastly followed over the         extranets entitled ‘Losing Out To Cash?’
                              last few years to ensure we have both          Also last month I commented on lenders who appear to be
financial strength but more importantly strength of human                 turning their backs on distribution. It does now seem that our
resilience and management are paying dividends. Being in this             efforts, coupled with the rest of the industry, have had the desired
position is enabling us to continue to recruit new members across         effect with a number of lenders now producing products which are
all the Group’s brands at an increasing rate and where many               advantageous to the broker. We are also seeing a levelling out of
competitors are shrinking alarmingly, we are doing the opposite.          business volumes suggesting the downward slide has bottomed out.
   However, the real test is between you and your clients. Your job       So overall, we are by no means out of the mire, but green shoots
is clearly to give them the best possible advice and sometimes the        are beginning to appear.
overwhelming media sentiment is sufficiently at odds with
investment logic to leave clients frozen in the headlights. The net       Simon Hudson
result is apparently clear inactivity even those who are brave            Group Chief Executive

Improvements in all the right pla
                               I am pleased to say that we are            Office-Net Member system, which will include running a pilot
                             continuing to see improvements in our        for enhanced electronic document storage, and streamlining the
                             service delivery with service related        processes for waiving commission retentions and claiming
                             complaints reducing further to an            Syndicate points when investing in Sinfonia via 3rd party
                             insignificant level and positive             platforms. In addition, our work with the Providers will enable us
                             feedback on the services being               to provide enhanced application tracking facilities to help you
                             received from Members.                       monitor the progress of applications during the underwriting
                               Our focus has been on improving            process.
                             and developing those processes that            By the time you receive this copy of Connected you will
                             have traditionally given you, the            hopefully have completed the online annual Member survey of
                             member, the most heartache. For              the Network services, as your feedback is vital for us to track our
example, we have been ensuring that the commission suspense               customer satisfaction and identify those areas where you feel we
process is much more effective and also visible to you via new ‘real      have made improvements and those where we need to do some
time’ suspense reporting on the Office-Net Member system. We              more work.
have also introduced more proactive chasing of Providers who send
us commission payments without the necessary backing statements
for us to identify who the commission is due to.                          Mike McGaughrin
  Later this year we hope to be able to release an upgrade to the         Group Services Director
                                                                          issue 29 autumn 2008          special feature - 07

The ‘wear your shoes UK’ tour
One man – one tour… coming to a town near you
   My Future Finance has gone through a considerable number           Individual firms to get a better understanding of how
of changes over the last 12 months in a single minded aim at          MFF works
attempting to provide a superior service to the network members       •   What types of business areas do we operate in?
and associate members alike.                                          •   What types of business do we not do?
   The services provided by My Future Finance are still not           •   Future proposals
widely understood and not wholeheartedly perceived to be of           •   Can we handle volumes?
value. We at MFF believe that we can provide a service that will      •   Commissions, fees and charges
benefit each and every associated firm within the group, and to       •   Bespoke service
that end propose to get in front of as many of you as possible,       •   Key accounts
whether it be on a group basis or by visiting each individual         •   Dedicated service
business unit.                                                        •   Technical help desk
   In the knowledge that we haven’t always got it quite right,
and in order to create a better understanding and delivery of
everything on offer from the “in house” team, we will be              Understanding the Enable system as an introduction
spending more time focussing on ways of developing all of our         platform
businesses and not just that of My Future Finance.                    •   Does it work for you?
                                                                      •   Do you understand it?
“Wear Your Shoes”                                                     •   Suggested improvements
   “Wear your shoes” is a campaign aimed at developing                •   Products
relationships, and providing a better understanding for all.          •   Services
It involves getting back to basics, putting ourselves in each         •   Commission
others shoes, and developing a service based on individual
requirements, however unique that might be.                           My Future Finance – The benefits
   Experience tells us that an introduction service to a              • Access to a fully compliant service without the risk
“specialist” needs to be an operation with both parties working       • Access to highly qualified individuals who have already
closely together towards a common goal.                                 obtained the necessary qualifications / authorisations and are
   Although that goal will ultimately be about generating               up to speed with current legislation: so if you only write
additional income, it does encompass providing the best possible        complex advice on a limited basis, we can save you the hassle
advice to our customers, in a professional manner, including          • Full administrative services to save our clients time and
reliability, a service to be reckoned with, whilst also keeping a       additional costs, MFF handle the entire information
focus on TCF.                                                           gathering, complete the research and produce a
   The demand for such specialist services is very much on the          recommendation report to your client. We will then process
increase as firms recognise the benefits of having somewhere to         the application through to commission generation and pay
place complex advice cases that they themselves don’t deal with         your share of the proceeds into your designated account.
on a day to day basis.                                                • We retain Full Compliance responsibility for each case
   As for treating customers fairly; member firms having access to    • We retain Full PI Liability which could potentially reduce
specialist advice units demonstrates active risk management             your PI premiums
ensuring that the best possible advice is offered to their clients.   • Our Introducers retain full ownership of their customer, we
                                                                        simply become your business partner for that transaction
MFF to get a better understanding of how each                         • No cross selling
                                                                      • Beneficial commission terms
individual business works                                             • By referring complex cases to MFF it releases you time to
• What types of business areas do you operate in?                       concentrate on your core business areas, saving you resource
• What types of business are you not involved in?                       and money
• In an ideal world how would you like an introduction service        • No additional qualifications are required by you
  to work for you? 1 way? Both ways? Timescales? Costs?
• Can you handle more business?                                       If you are interested in hearing more and wish to become one of
• Can we help you to identify more business and product               our early visits please contact us directly:
• Commissions, fees and charges
• Sharing Ideas
• Marketing                                                           Brian Braithwaite
• Business development / Partnership development                      Head of Business Development & Technical

Email: Tel: 0113 239 5334 or Mob: 0782 4465590
 08- marketing               issue 29 autumn 2008

What are consumers thinking?
   About 12 months ago, the term ‘credit crunch’ entered the                                  Search IFA
public domain and since then, a day rarely goes by without                                      Search IFA is an online profiling
someone uttering those now infamous words!                                                    directory of IFAs helping advisers
   …but what is the real impact - what’s going through the minds                              maintain a strong Internet presence,
of today’s consumer?                                                                          using web specialists to ensure the
                                                                                              maximum web hits.
Where are people getting advice/information?
  Research conducted by Scottish Widows on where people                How would a website benefit your business?
get advice on financial matters from makes for some interesting        • Websites work for you whilst you rest – customers
reading…                                                                 and prospects can browse, gather information
                                                                       • Providing free information – adding a valuable service
  Source                                                               • Generate enquiries – and qualified leads
  Newspaper         28%      Magazine           8%                     • Update clients – with news, views and offers
  Internet          50%      Branch/BS          29%                    • Increase your productivity – by offering answers to
  IFA               20%      Friends/Family     25%                      frequently asked questions, freeing your time
  TV                14%      Nowhere 17%                               • Save money – charges in print cost, but not so with a
So, what can we draw from this?                                        • Put you on a level playing field – with competitors
From an IFA’s perspective, there are some key messages here:             who do have a site
                                                                       • Enhance your professional image – as a forward-
1. YOU NEED A WEBSITE                                                    looking firm
   With 50% of the population using the internet to find               • Open up a national/global marketplace – for your
information, the argument for having a website has never been            services
stronger. The amount of time spent online and searches for
insurances and financial advice are amongst the highest requests.
                                                                      2. YOU NEED TO MAKE SURE YOUR
Choose a Website to enhance your business image                       MESSAGE IS SEEN
  Through our Marketing Toolkit you can have a website built             People still value face to face advice, so sending timely
for free - in minutes, with running costs from as little as £30pcm    communications to them may be the difference between them
  Below are examples of the website offering you can find within      coming to you or going into the nearest bank!
our marketing toolkit                                                    At the heart of our toolkit we have numerous pre-approved
                                                                      letters that can be downloaded and issued immediately, with
Promoting Your Website                                                minimum effort and cost (you only pay the post!).
  Within our toolkit we also help with promoting your website.           If you want a more informative and professional approach, you
There is no point in producing the best website if no-one ever        could use one of our featured newsletters, available in both hard
sees it! That’s where website promotion comes in and we have          copy and email format, offering a great way to keep in touch with
dedicated a whole area within the toolkit to help you by              existing clients and equally to introduce your business and
compiling a list of promotional tips and negotiating special deals    services to prospective clients.
with sites to help drive more traffic to your own website…               For the first time ever, email has overtaken direct mail as the
  We have teamed up with a number of companies who will help          most popular method of communication and our email marketing
promote your Services, including:                                     service means you can join the trend with a personalised,
                                                                      professional email.
                        LocalLife                                        With 28% reading the press to see what’s going on, the above
                           LocalLife search directories receive 100   has even more relevance – make sure you get your message in
                        million visitors a year and is the fastest    front of them so they understand the facts and what you can
                        growing search directory in the UK. We        offer them.
                        have negotiated a 45% discount for you to        With a high percentage of people reading newspapers, it
                        link from LocalLife to your own site.         becomes advantageous to advertise your business to create
                                                                                issue 29 autumn 2008             marketing - 09

awareness and to persuade prospects to contact you.                   crunch (29%) and worryingly, more than a third (36%) don’t
  We have created a series of pre-designed advertisements             believe it will affect them.
suitable for printing as leaflets, inserts or adverts in newspapers
and magazines. This completely free service located within our          Full details of all the research referred to above can be
Marketing Zone, enables you to simply select the relevant advert,     accessed within the campaign zone, under ‘other’.
highlighting the product you wish to promote, personalise and use!
                                                                      Support to address this…
                                                                         We have enlisted the support of some of the industry’s key
                                                                      providers who have provided a number of supporting documents
                                                                      to help you tackle some of the issues raised here.
                                                                         Access the campaign zone of the Extranet now where you will
                                                                      find an array of support, in particular…

                                                                      Educate your clients about pensions
                                                                         ‘Pensions Folklore & Fact’ is a series of technical guides and
                                                                      presentations from Clerical Medical that help you to address
                                                                      client misconceptions about pensions.
                                                                         AEGON Scottish Equitable have designed a range of
  Tenet’s Advert Generator System located within the Marketing        material to help you show your clients why building their
Toolkit. Under Adverts, simply click on the enter icon.               retirement savings is a good idea and can help you overcome
  This will then open up a separate window, where you then            objections.
need to select ‘Promotional Material Generator. The system is
built upon the same platform as Tenetsite, so if you have a site      Educate your clients about investing
with us, your details will automatically be uploaded to the ads,         To help you overcome client concerns, AEGON Scottish
but if not, simply select ‘I do not have a Tenetsite.’                Equitable have developed a pack of investment materials that
Now you have access to our adverts.                                   covers all kinds of scenarios and will apply to a huge cross-section
                                                                      of your clients
What’s on consumers’ minds?                                              Clerical Medical has created a suite of information guides
  Research conducted by Scottish Widows during June set out           to help put recent market uncertainty into perspective for your
to find out just what the hot topics were amongst today’s             clients.
consumers and there were little surprises as the ‘Credit crunch          Standard Life have a number of technical guides and
and economic downturn’ dominated, with particular emphasis on:        dedicated support functions to help you show clients ways you
• A slowdown or a recession and how long will it last?                can add value by reducing the tax they would otherwise pay by
• Huge increases in cost of living                                    using offshore investments.
• Mortgage/remortgage rates high, plus difficulties finding good
    mortgage deals                                                    Let's Talk Protection
• Falling property values, yet still too expensive for first time       In addition to those above, you will also find sales aids to help
    buyers to enter market                                            educate your clients about the need to protect their most
• Disposable income much reduced                                      valuable assets – their home and their income! Find support form
• Increased threat of job insecurity and potential redundancies       Bright Grey, Zurich, Royal Liver, L&G Friends Provident
• Huge gap between official inflation figures and personal            and Norwich Union.
                                                                      Visit the Campaign zone now to access the support you need
Of particular interest for IFAs though, was the following…

• Consumers want to retire early, but all realise they don’t have       Toolkit additions
  sufficient funds
• All named ‘a good pension’ as most important for retirement –
                                                                        Presenting the right image
  but say it’s too complicated and thus many ignore                     Logo Facility
• Many simply not aware of tax advantages                                 As an additional service for our clients we are now introducing
                                                                        Logo facility as part of our Marketing toolkit package.
Savings                                                                   Well designed logos can provide instant recognition and
• 39% of the population are not saving anything for the future          encapsulate the values of a business. The benefits of having a
• There is a real lack of understanding of the risk and reward          unique icon that represents your company can build a powerful
   relationship in savings and investments                              brand identity. If your are thinking of refreshing your logo or
• 39% of parents with adult children are using their savings to         building a new one please view the Extranet to see further
   help them                                                            details on the service providers.
  Additional research conducted by Zurich suggests that                   Visit the Marketing Zone of the Extranet to access a
despite the testing market conditions, less than a third of             wealth of support including ready-made letters,
consumers have reviewed their finances in light of the credit           newsletters and email templates.
 10 - business development                        issue 29 autumn 2008

 Develop and grow
 your business …and then retire!
Succession Planning                                                     Not only are Tenet offering this but now you can take on
  The profile of the membership throws up a number of                trainee advisers, mould them to suit your business model and
interesting scenarios in relation to mergers and acquisitions.       have all training and supervision taken care of externally.
During the last 12 months we have been involved in helping              If you would like to discuss any part of the recruitment process
a number of members merge with or acquire fellow network             or to discuss taking on an IFA/Mortgage Adviser call Mark Ford
practices.                                                           on 01132 395 312.
  Clearly this is set to become a more prominent feature of
network membership as principals of businesses look to retire        The Tenet Academy
or sell and the newer entrants look to enhance their book of            We are delighted to be able to
business.                                                            inform you about a new Tenet
  We are currently in the process of creating a new support area     Academy for investment adviser
within the network offering which will be designed to identify       trainees. For over a year now
those firms looking at exit/succession planning and marry them       we have been working with The National Skills Academy (NSA)
up with firms on the acquisition trail.                              to establish a programme for Tenet members to recruit
  The support will include clear guidance throughout the whole       inexperienced people to become mortgage advisers.
process and will be designed to make the transactions as seamless       The NSA is a government body set up to develop
and robust as possible.                                              apprenticeships for Financial Services. The scheme receives
  Further information will be available in the next few weeks.       government funding designed to reduce the skills gap in the work
                                                                     environment. Trainees of all ages will be able to access the
Recruitment Update: Don’t Believe the Hype!!                         apprenticeship scheme and receive training funded by the
  Over the last 18 Months Tenet has successfully trialled and        government. The programme will revolutionise the recruitment
launched its free recruitment service to members and during          process of new blood into the company enabling you to recruit
that time we have saved the membership over £500,000 in              new people and not having to supervise them yourself.
recruitment fees, with this rising month by month!                      The full scheme runs for 18 months and successful candidates
  With the unfortunate issues surrounding the mortgage market,       will be awarded a national qualification in investment advice.
many firms have seen a drastic downturn in mortgage enquires,        Government funding allows us to appoint external assessors to
with the BBC reporting in early September, that at the same          ensure training is transferred to the workplace. Delegates require
point last year, 113,000 mortgages were sold compared to only        no experience or qualifications to join the scheme at outset.
23,000 for this year! Because of this we are finding many highly     For the initial 6 months, delegates will be trained to complete a
experienced mortgage advisers looking to find a new position         recognised investment qualification through day release at
nationwide.                                                                                      regional colleges. Once achieved,
                                                                       Key Points:               delegates will attend formal training at
Can You Help?                                                          1. A new Academy that     Tenet’s training centre in Leeds before
   Some firms are now reporting an increase in mortgage                will enable you to        being authorised to advise clients.
enquiries, with others not being as severely affected in their         recruit non-experienced      We have teamed up with Babington
                                                                       recruits without the
mortgage business as the press are reporting. Are you one of these                               Business School who will ensure that
                                                                       need for you to
firms and would you like to speak with these experienced and                                     all initial client visits are observed and
                                                                       supervise directly.
well qualified mortgage advisers looking for new positions?            2. Government funding
                                                                                                 assessed. Delegates who already have
Don’t forget the free recruitment service offered to members           which will enable you to  achieved a recognised qualification may
includes:                                                              grow your business.       also take part in the scheme joining at
• Localised recruitment specialists, helping you develop an                                      month 6 rather than outset.
    attractive recruitment proposition                                  The major benefit of the programme to you is being able to
• Bespoke recruitment website to promote your vacancy                recruit non-experienced people and not having to act as their
• National press and online advertising                              supervisor.
• Dedicated headhunting resource                                        The scheme will be formally launched in September. If you
• Candidate vetting, including professional first stage              would like to register for the scheme please contact Meena Verma
    interviews and the arranging of final interviews with the        (New Business Team Leader) on 0113 2395347.
    member firm                                                         Delegates who have already benefited from education funding
• Completion of all forms when accepting an applicant                such as graduates will not have access to the programme. Initially
• NO COST!!                                                          the Academy will only be open to firms based in England.
                                                          issue 29 autumn 2008           business development - 11

Committed to                                                        financial advisers to be more successful in examinations. In
                                                                    addition to our online materials we will offer virtual training
making it easier                                                    support through podcast and webcast presentations and also give
for you to achieve                                                  you the opportunity to dial in to our regular ‘virtual classroom’
                                                                    conference calls.
diploma status                                                         Advisers may also wish to attend one of our CII approved
                                                                    classroom Revision Workshops. These sessions are being held
  The Norwich Union Financial Adviser Academy has                   around the UK and will most benefit advisers who have
been developed in association with the Chartered Insurance          progressed through their self-study. These free revision sessions
Institute (CII) to help make it easier for financial advisers       are open to registered members of the Norwich Union Financial
to attain the CII Diploma in Financial Planning.                    Adviser Academy only and are subject to terms and conditions.
  On 31 March we launched our blended package of learning           To find out more, visit today!
support to help give you the best possible chance of exam           • Access to our recommended package of CII learning
success.                                                                materials at a competitive price
• Tools and guidance to make it easier to start and get
    the most out of your study time                                    We have arranged a competitive cost for our recommended
                                                                    package of CII learning materials: this contains your exam entry,
  We realise that beginning your course of study towards a          Course Book with 12-month update and ed.learn, the CII's
Diploma might seem like a daunting task, but our self-study         online learning centre - see for information.
planning tools and study techniques could help to make it easier    Our package can be purchased direct from the CII after
to start and to keep going. We will also help you to apply your     completing registration and joining the Norwich Union Financial
technical knowledge and understand the business context,            Adviser Academy.
through online case studies and self-study questions.                  In line with our proposals to promote the financial advice
• Support from Norwich Union’s team of specialist                   profession, membership of a professional body is a prerequisite of
    trainers and consultants                                        joining the Norwich Union Financial Adviser Academy.
                                                                       If you have any queries please contact your Norwich Union
  Our training team has many years of experience in helping         consultant or email us at

….and we are developing to support you too!
Tenet Management Development Programme                                 We have had a very generous
                                                                    contribution to the programme
                                    In July we began a long-term    from AEGON Scottish
                                 investment in the development      Equitable. David Flory, the partnerships director from the
                                 of our first line managers. This   Development Division, attended on the second day of the launch
                                 will have a big impact on the      and listened to topics such as: ‘Having a vision for your team’,
                                 future success of the company,     ‘Emotional intelligence’ and ‘Effective decision making’. David
                                 especially in the current          was eager to meet with the first group of individuals who will be
economic climate. The training will not only serve to equip them    going through this programme and he is keen to see the progress
for the future but also build a management team who will be         they make.
there to help and support each other.
   We will be delivering an 18-month programme which consists          The whole programme is being run in
of 5 modules:                                                       conjunction with Park Lane College in
  1. Providing inspirational leadership and communication           Leeds. Craig Busby (Head of the Business
  2. Building high performance teams                                School) and Michael Leach (Programme
  3. Making it happen every day                                     Manager), both from Park Lane College, led the sessions on 16
  4. Adapting for the future                                        and 17 July, while Krystyna Gadd, our Tenet Employee
  5. Providing excellent customer service                           Development Officer, has played a key role in the design and
                                                                    development of the whole programme. She attended the sessions
  There will be assignments and assessments, which will lead to     and facilitated the overall smooth running of the two days.
an accredited management qualification through the Chartered           The next session of the programme focuses upon ’Coaching
Management Institute.                                               skills for managers‘ with plenty of opportunity to apply new
  The programme kicked off with team leaders and supervisors        skills learned into the workplace and in January 2009, the first
on 16 July, where Simon Hudson, the group’s chief executive         line managers will attend the launch of the second run of the
echoed his thoughts about it being the ‘best idea we have had in    programme. Following that, later in 2009, we hope to open up
years’. Linda Schofield, the regional director from the National    the programme to our members plus any new managers we have
Skills Academy for Yorkshire and Humber, also attended the          at that point. It will also be open to any individuals, who, as
welcome session. Linda is keen to promote development of skills     part of our succession planning, are likely to become managers
within the financial services sector.                               within Tenet.
 12 - special feature               issue 29 autumn 2008

  Cooking for a cause...
           s this year's summer is fading and the                 A condition caused by the lymph system's inability to drain fluid

  A        nights are drawing in, Connected brings
           you three recipes to cook by yourself or
           with your children's help - all guaranteed
to warm you up this Autumn!
                                                                  away from the body's tissues, lymphoedema sufferers experience
                                                                  painful, swollen limbs and an increased risk of infection. It's a
                                                                  cause close to the author's heart - Katie's youngest son George
                                                                  suffers with this debilitating condition. "Currently, there's no cure
                                                                  for lymphoedema" says Katie. "With this book, I am hoping to
                                                                  raise awareness and funds for advancing research into this
These mouthwatering dishes come from By George... It's            incurable condition".
Scrummy by Katie Taylor, a cookbook that not only gives you
simple, wholesome and delicious recipes; the proceeds from each   By George...It's Scrummy features 100+ mouthwatering recipes
copy sold also enable Leeds Teaching Hospitals to help children   arranged by season, you can find out how to buy your copy by
suffering with lymphoedema.                                       visiting or
                                                   issue 29 autumn 2008                 special feature - 13

By George...
    It’s Scrummy                                                                              Autumn Recipe Selection

               Autumn Soup
               Ingredients                  Serves 4-6
               800g parsnips                Peel and chop into chunks the sweet potatoes, parsnips, onion and carrots.
               400g onion                   Place in a large saucepan with a little olive oil and lightly coat the vegetables
               800g carrots                 over a low heat.
               1 large orange               Zest the orange and add to the pan, with the juice.
               olive oil
                                            Mix the stock cubes with the hot water and pour into the pan with a good
               2 vegetable stock cubes
                                            pinch of salt and pepper. Turn up the heat and bring to the boil. Turn the
               2 litres hot water
                                            heat down slightly and simmer for approx 35 minutes until the vegetables
               salt and pepper
                                            are tender.
               fresh coriander
                                            With a hand blender, or in a food processor, whiz down the vegetables to a
                                            smooth soup. Taste and add any more seasoning if required. Add some
                                            chopped coriander just before serving.

                                            Scrummy Tips
                                            Soups are so easy and you can play around with all sorts of wonderful
                                            vegetables. Try leeks and potatoes together or a variety of mushrooms. For a
                                            tasty simple tomato soup, roast the tomatoes in the oven with some onion
                                            and fresh thyme. Add to the boiling stock, season and whiz down

               Honeyed Sausages in a Box
               Ingredients                  Method
               12 chipolata sausages        Pre-heat the oven to 190°C (gas mark 5)
               4 tablespoons runny honey    Cut the sausages into two and roast in an oven dish along with the other
               2 teaspoons sesame seeds     ingredients for 25 minutes, until brown.
               1 teaspoon olive oil
                                            Cut off the lid and scoop out the centre of the loaf of bread, keeping the
               1 granary loaf, unsliced
                                            inside for future breadcrumbs. Line with greaseproof paper.
                                            The sausages can go straight inside the bread box, ready to hand out for any

                                            Scrummy Tips
                                            Mix together some mayonnaise and grainy mustard to give a gorgeous simple
                                            dip to compliment the sausages.

               Gingerbread Families
               Ingredients                  Method
               300g self-raising flour      Pre-heat the oven to 160°C (gas mark 3)
               100g golden caster sugar     Grease a baking tray.
               50g butter or margarine
                                            Place the flour, salt and ginger in a bowl. In a saucepan, melt the sugar, fat
               3 tablespoons golden syrup
                                            and golden syrup then add the syrup to the dry ingredients. Mix well, adding
               3 teaspoons ground ginger
                                            the milk and then kneading the gingerbread carefully with your hands.
               4 tablespoons milk
               pinch of salt                Roll the gingerbread out with a rolling pin and use cutters to form your
                                            families. Place on the baking tray, adding any currants or cherries for eyes,
                                            buttons and mouths.
                                            Bake for 10-15 minutes and then cool on a baking rack. Decorate with
                                            coloured icing... if you can catch them!

                                            Scrummy Tips
                                            The same mixture can be cut into stars and Christmas shapes (making a
                                            small hole to thread a ribbon through later), with a little milk brushed over
                                            before baking. These make interesting decorations.
                                                           issue 29 autumn 2008          business development - 15

   Key events coming your way…
  Over the last year we have introduced various improvements        events…..please exploit this facility when planning your own
to the events service in order to keep it both fresh and            development diaries.
innovative. The feedback from our advisers has justified these
refinements and we now have an all-inclusive service sufficiently   Virtual Events
agile to meet the needs and preferences of ALL our advisers.           We have invested considerable energy in our programme of
                                                                    virtual events. The next KEY DATE for your DIARY is 19
Networking Professional Development Meetings                        NOVEMBER. This will be Tenet’s second Virtual PDM and
(NPDMs )                                                            promises to be an exciting and highly relevant business forum.
   We have just commenced the above which are a creative            The programme includes all markets with particular emphasis on
variation to our orthodox PDMs. The spirit of the NPDMs is          industry issues and how these may impact on adviser business
about the provision of a professionally structured environment      models. The substance will embrace thoughts from Tenet as well
where advisers can meet with providers to discuss and debate        as many of the leading providers. Another KEY DATE is 11
contemporary business issues. This approach will obviously          DECEMBER where we will have our final Virtual Investment
touch on learning as well as marketing ideas against the current    Forum for the year. It goes without saying that this is absolutely
challenging trading climate. Our orthodox PDMs have been            essential viewing for all advisers particularly when placed in the
incremented with Round Tables this year allowing advisers to        context of ongoing global market turbulence. The event will
offer feedback to the presenting providers. This format has         feature fund managers from many of the main investment houses.
elicited fantastic feedback and we have basically extended this
principle for the NPDMs. Whilst the NPDMs are to an extent          National Conference – 26–28 November – Jersey
an experiment, we are confident advisers will find the collection     We are now well down the road of preparation for the above.
of expertise and knowledge from the participating providers of      The event will be a thoughtful blend of business and recreation
immense value. Clearly the feedback from our advisers will          on the relaxing island of Jersey. We are really looking forward to
directly navigate the direction of our Events programme for 2009.   welcoming our guests and are determined to provide a lively few
                                                                    days away from day-to-day business issues. Our conferences have
Workshops                                                           been very well received over the last few years and this year we
  Once again we have revamped our workshops with the
                                                                    have aimed to supply something fresh and new……….thus
aspiration of providing an enhanced service. We now have a really
                                                                    avoiding predictability! We are confident that all guests will enjoy
well-balanced model able to cater for all areas of professional
                                                                    a memorable few days and derive both business and personal
development. Many of our workshops are now built onto the
                                                                    benefit from this high impact experience.
PDMs thus reducing the travel costs and time in supporting the
forums. We have also designed multi-provider workshops giving
advisers exposure to the often contrasting views of different
                                                                    Training and Development Needs Analysis (TDNA)
experts.                                                              Once again it is time to consult all our advisers to get ideas and
The key highlights for the remainder of 2008 include:               suggestions for our development programme. Our TDNA is
   - Post retirement                                                unrivalled in the industry and allows us to remain sensitive to the
   - Offshore investments                                           needs of our advisers. The results will inform the nature of our
   - Investment sales                                               plans for 2009 and feed into both the PDMs and also the
   - WRAP & Platform                                                workshops. Please take a few moments of your time to complete
  For further details please refer to the Events section of the     the questionnaires when they arrive in November.
                                                                      For further details on any of the above please don’t
NEW Event Centre                                                    hesitate to contact the Events team on 0113 239 0011 or
  Our Extranet site offers a living library of all our              email
 16 - industry landscape                       issue 29 autumn 2008

    Regulatory update
                                                 ell, that’s summer      from information gleaned during the visits by T&C Supervisors

                              W                  been and gone!
                                                 What a damp squib
                                                 that was!
                                 Despite the gloomy summer we
                              have just experienced, there are some
                                                                         or Field Compliance Officers since the start of this year. The
                                                                         message from this article is that it is still not too late to put
                                                                         together a coherent action plan and embed it into your businesses
                                                                         and the aim of these meetings is to assist you to get to that point
                                                                         in very short order, if we might still find that insufficient action
                              positives that we must grab hold of,       and the necessary evidence is in place. Obviously, we hope that
                              even in the current economic climate.      this will not be the case and many firms have embraced the
                              Although it has been said many times       whole concept of the TCF initiative with absolutely
                              before, and therefore it does sound        commendable commitment and we add, finding the process
                              like a cliché, it is also very true that   helpful in their business planning models. TCF is a positive way
it is at these times IFAs really earn the trust and respect of their     of re-evaluating what direction you wish your businesses to follow,
clients by being ’visible‘ and in regular contact with their clients.    which is why our TCF ’toolkit‘ issued at the very start of this year
As you know, this is very much a fundamental part of TCF i.e.            begins with Mission Statements and Visions etc..
providing an ongoing service and doing exactly what you say you             Continuing with the subject of TCF, the most fundamental
will do in your initial meetings. I guess you all knew it wouldn’t       aspect of the whole TCF initiative is of course to ensure that
be long before those three letters appeared in this article!             clients get the most suitable advice at all times, applicable to
   We are now in the final straight for embedding TCF into our           their means, circumstances and needs. One of the key areas for
business as the 31 December deadline approaches very quickly             many of our member firms is involvement in switching pension
now. Please allow me to signpost the All Member Memo that                funds or lump sum investment providers i.e. bonds or collectives
was issued on 29/7 titled ’TCF Update Summer 2008‘ which is              for clients. As you know from the mass of guidance we have
now on the Extranet under the Information Hub section for                issued on this subject over the last couple of years, this is an area
Bulletins and Memos. This included amongst other things, a very          that can be quite complex and it is important that our guidance
comprehensive checklist to help you work through some of the             is followed very closely and precisely. In particular, all
activities that almost certainly could still be applicable in your       recommendations to switch pension providers must be clearly
business. Whilst the focus of the checklist was aimed at helping         documented including a strict ’like for like‘ comparison on
you in the event of your firm being chosen by the FSA to be              projections and where performance is used as the main
subject to an onsite visit, the checklist is a consolidation of all      justification for such switches, that this is backed up by
the suggestions and ideas we have put forward over the last two          supporting evidence. Where clients are recommended to switch
and a half years as practical examples of things you can do in           into a more expensive product to meet their performance
your business.                                                           requirements, this must be clearly pointed out to them and
   By now, some of you will have received a letter from Jeremy           replayed in the Suitability Report with a clear justification as to
Smith, my Field Competence and Monitoring Manager,                       why it is still recommended as a course of action. The most
explaining that you will be contacted by a Field Compliance              recent guidance was issued as part of the June 2008 Regulatory
Officer with a view to coming and discussing your progress with          and Compliance Update (Issue 11) now on the Extranet under
the TCF initiative. This is again an attempt to assist members           Compliance Publications in which a checklist with guidance notes
who are perhaps still struggling to meet the standards expected          on replacement business was issued. I urge you to ensure that
in terms of actions and also evidence of actions linked to               you and all your advisers (where applicable) are following this.
improving service to your clients. Yes, I know the tone of this          The Business Assessment Team will be concentrating on
letter is quite ’heavy‘ but there is no time now for a ’head in the      monitoring a bigger percentage of replacement business over the
sand‘ approach and unfortunately, we have had to take action             next few months and we will be aiming to ensure that the
against a couple of firms who have been unwilling to progress the        standards embodied in this type of business are as high as they
TCF initiative in their firms. We hope this will not apply to any        can possibly be.
others but I must impress upon you now, that we will be looking             By now, many of you will have been seen by your T&C
to see progress made for those firms that we have identified as          Supervisor to discuss these standards and I hope that these
being higher risk in relation to a TCF assessment. This risk             sessions have been useful.
assessment is based on your self-assessment questionnaires and              On a much more positive note, we have launched our new
                                                                     issue 29 autumn 2008            industry landscape - 17

Development Supervisor Team reporting in to my Training and              certain criteria which I will not go into detail on here but it would
Development Manager, Neil Price, and have had a very positive            obviate the need for firms wishing to bring on trainees becoming
response from firms wishing to avail themselves of this additional       member firm supervisors. Some firms have already taken
coaching and development service. For firms who may not have             advantage of this and although it is early days, it seems to be
seen it, it was issued on the 12/8 and is entitled ‘New Training         proving a very successful initiative. Your recruitment team can
and Development Programmes’ again in the Information Hub                 provide an initial view as to whether we can assist in this with
section of the Extranet. We have only allocated a relatively             any prospective new trainees.
small?? something missing here?? of resource to this work at               I look forward to seeing many of you in the forthcoming PDMs
this stage but obviously if we find that it is fruitful for you and us   and at the Annual Conference in a couple of months’ time.
together, we hope we may be able to expand the team in due                 Good luck in your endeavours to provide your clients with the
course.                                                                  best possible ongoing service as I am sure we will all see the long-
   Finally, again on a positive note, this is just to remind you that    term benefits from this ethos.
for firms who are thinking of bringing new trainees into your
firms and the industry, we do have an external third-party firm
we are working closely with, who can provide ongoing supervision         Mark Decker
in the early months i.e. field observations etc. This is subject to      Director of Network Compliance

                              RDR update and further support
                                The next stage of the RDR was            for their service under the principles of customer agreed
                              due to be published in October but         remuneration (CAR) - Sales Advisers act as an agent for one or
                              due to a reshuffle at the FSA and the      more product providers and are usually remunerated by
                              appointment of Jon Pain as managing        commission.
                              director of retail markets, the               Qualifications - there is wide acceptance across the industry of
                              feedback statement has been moved          the need to raise the current qualification level to QCA 4 and the
                              back to November to enable him to          CII’s Diploma in Financial Planning is considered to be the most
"fully engage with the process" before delivering the next stages.       popular route to achieve this. Although recommendations have
   Although the FSA have more pressing issues to occupy their            been made to consider a dividend for experienced IFAs, exams
time at present, the RDR remains one of the most significant             like J05 enhance an advisers service proposition when reviewing
projects in the retail agenda and the intention is that it will bring    retirement needs and as such we strongly encourage everyone to
about lasting improvements for consumers and firms in the retail         start the journey sooner rather than later. Our training
investment market. The regulator has recently stated that they           department are available to offer guidance and support and we
anticipate no slowing down of the overall programme of work and          will shortly be adding further support to our Professional
expect to meet the revised timetable.                                    Development Programme. Please also refer to recent
   The position for IFAs generally remains positive with the ‘back       communications regarding the support offered by Norwich Union
to basics’ approach to create a clear distinction between                and Scottish Widows.
Independent advice and Sales advice. Feedback suggests however,             As soon as the feedback statement is issued we will update you
that it is unrealistic to expect consumers to understand when            accordingly.
advice does not involve sales or when a sale does not include
advice. We welcome the recognition that IFAs are at the top of           Keith Richards
the advice chain and act as an agent of the client charging a fee        Group Distribution & Development Director
                                                                            issue 29 autumn 2008            industry landscape - 19

Electronic authentication in the fight against
financial crime
   The new Money Laundering Regulations 2007 have been recognised as            it must be checked and verified. This is becoming harder as the
an important tool in the fight against financial crime. However, compliance     number of fakes and forgeries increases. There are numerous
with this directive threatens to slow down the customer acquisition process.    websites that sell fake documents under the guise of ‘novelty
James Blake, Data Authentication expert at Experian, says that                  items’. The challenge doesn’t stop there though as many genuine
organisations should use electronic authentication to confirm an individual’s   documents are also being used for fraudulent purposes. The
identity and perform anti-money laundering checks.                              Identity and Passport Service (IPS) had 16,500 fraudulent
   Last year, identity management came under the spotlight with                 applications for passports during the 12 month period to
the introduction of the new Money Laundering Regulations 2007.                  September 2006, 10,000 of which went undetected.
The regulations require that all accountants and firms practising
‘accountancy services’ reassess their customer authentication                   A modern approach
procedures. This is a directive that has been supported by                         Electronic authentication is helping organisations to combat
industry bodies such as the Institute of Financial Accountants,                 identity fraud and money laundering in a way that works for
who recognise it as ‘added security to the public and a form of                 their business. Electronic identity checks verify and validate in
regulation to the accountancy profession’.                                      seconds that the customer is who they say they are.
   When it comes to establishing identity there are two different                  So how does it work? An individual’s biographical data, such as
methods. As set out in the regulations, you must undertake                      name, address, previous address, date of birth, etc is compared
’customer due diligence‘ before entering into a business                        against databases that contain financial/transactional data. It looks
relationship with an individual. This means verifying the identity              at the number of electronic records the individual can be
of customers using documents or data/information obtained from                  matched against, how far back in time they go and the processes
a reliable and independent source. We refer to these processes                  that were in place when the records were created. The data is
respectively as paper-based or electronic authentication. It is                 then analysed to identify potential fraudsters or high risk
important to establish identity at this point so that the necessary             individuals. A yes/no/refer score is then returned that indicates
Anti-Money Laundering (AML) checks can be performed with                        how confident you can be that the person is who they say they
the knowledge that the person you are dealing with is who they                  are. In terms of compliance, organisations are able to provide the
say they are.                                                                   regulator with an electronic audit trail that shows how the
                                                                                decision was made.
Problems with the paper-based approach                                             An added feature is that information is also screened against
   Traditionally, paper-based authentication, via documents such                sanctions data to check that the individual is not a politically
as a utility bill, passport or driving licence, was the only way that           exposed person or has a known history of money laundering.
you could prove that the individual is who they say they are.                   As a result there is no need for two separate business processes
While this approach does achieve the tick in the compliance box,                to confirm identity and screen for money laundering.
there is evidence to suggest that electronic authentication is
safer, cheaper and more customer-friendly.                                      Time for change
   Experian commissioned research into identity management                        Whilst national and international regulation is forcing
processes in autumn 2007. Fifteen hundred consumers were                        organisations to review their authentication procedures, the more
interviewed and 68% said that providing paper documents, such                   savvy organisations have put themselves in the shoes of their
as passports and driving licences, to prove identity was either                 customers and have realised that it’s not just about compliance.
inconvenient or very inconvenient. It is rare that each individual              Tackling fraud and financial crime opens up opportunities for
will have all the necessary documents to hand, so either you ask                businesses to strengthen their fraud prevention systems and at
them to return with the documents or send them via the post.                    the same time streamline their customer acquisition processes.
A large proportion of financial services organisations still do the               The key is to achieve a seamless process for your customer
latter, putting their customers’ data at risk. Should the                       ensuring they get what they want quickly while also peace of mind
documents go missing in the post and fall into the wrong hands                  for your organisation that the interaction took place securely.
then they are a prime target for identity fraud.                                  For more information on electronic authentication please
   Even when the relevant documentation has been obtained,                      e-mail or visit
 20 - investment special                      issue 29 autumn 2008

   The decline in the FT-SE and other world stock markets has           investments over a period of time by initially investing the
dealt a major blow to investor confidence, with many IFAs and           majority of their money in cash-based assets and transferring
product providers reporting significant reductions in investment        the balance in to say equity- linked assets over a period of time.
volumes over the last twelve months.                                       Tenet Group offers a range of cash funds where regular
   Difficult market conditions provide a challenge to professional      transfers can be easily arranged. The transfer can be made into
investment advisers at exactly the time when their clients most         funds selected by the IFA, using Tenet model portfolios or the
need advice.                                                            Sinfonia fund range. Simply click on the following links to see
   Client reaction to a short term decline in market performance        further details.
is often to run to cash – human nature but obviously taking the
risk of missing opportunities to buy into the market at what in         Bold investor:
the long-term will hopefully be very attractive prices.                    The perfect investment involves buying at the bottom of the
   One of the key challenges for the professional adviser is            market and selling at the top – excellent advice in theory but as
whether to follow the client’s natural instincts and provide a          they say…’it’s all about timing’.
range of cash options rather than lose clients to banks and                Many investors understand and like the theory, but are too
building societies. The reality is that this may be exactly the right   risk averse to take action. For others, the attractions of higher
approach for some clients, but there is a genuine client need to        potential returns enable them to consider this as a real
challenge the natural instinct and consider a range of investment       opportunity that they wish to try to take advantage of.
strategies to take full advantage of the long-term opportunities.          Tenet provides a wide range of support and offers to IFAs
   The Tenet Group provides a range of solutions linked to the          advising such clients, with a range of investment styles that can
four main strategies that are appropriate to current market             be linked to a wide range of client’s attitude to risk. Click on the
conditions.                                                             following link for further details.
                                                                           The research team provides a wide range of recommended
Run to cash:                                                            funds which can be selected on an individual basis or as part of
  While other options should be considered, this may well be            the Tenet model portfolios. In addition, Tenet has recently
the best option for the more risk averse investor – especially if       launched its own investment proposition – Sinfonia Asset
nearing the realisation of their original investment objective.         Management. Sinfonia combines expertise and technology to
                                                                        provide a range of investment funds that are selected and
Capital protection:                                                     managed against client’s specific attitude to risk. In addition,
  A relative newcomer to the options available, we are seeing an        it provides flexible pricing and special benefits to IFAs that can
increasing number of providers offering ‘structured products’           be taken into account when agreeing the right fee for the service
where the capital invested is protected from any losses – with          provided. Click on the following link for further details.
potential growth achieved by linking the investment to track the
performance of equity-type investments.                                 In summary
  In effect, the investor is often only risking the interest they         Challenging market conditions provide even greater need for
would otherwise have achieved from the investment for a                 professional investment advice – and the best advice often
potential share in the growth of equity linked investments.             involves challenging pre-conceived ideas to establish the best
                                                                        long-term investment strategy.
Spreading the risk:                                                       No one solution is ever right for every client and in recognising
  Some investors might see the potential associated with buying         this, Tenet Group provides a wide range of investment options
when prices are relatively lower – but might not want to take a         within the four principle investment approaches that can be
view on the best time to invest. Adopting a ‘pound cost                 adopted in current market conditions.
averaging’ approach enables these clients to spread their               Log on to the Extranet to see solutions available for each category.
                                                                    issue 29 autumn 2008                  investment special - 21

Striking a balance through
absolute returns
   When constructing balanced portfolios for clients, IFAs want to     offer a cost-effective, quick and practical way of switching
deliver investment rewards without taking too much risk.               between asset classes, avoiding the high costs involved with
Traditionally, the way to do this is to diversify investments across   dealing in conventional assets.
a range of asset classes, including equities, bonds and property.         A practical example of where we use derivatives is in isolating
However, funds investing in these asset classes only reward            stock selection. The European equity market may fall 5% over a
investors when markets go up and penalise them when they fall.         given time period, but our European equity fund manager’s
In volatile conditions, as we have seen in the last year, this can     portfolio only loses 2% due to their stock selection skills. In this
lead to short-term losses.                                             case, we can convert the 3% outperformance into a positive
   As a result, absolute return funds are increasing in popularity.    return by investing in the fund manager’s portfolio alongside
This type of fund has provided institutional investors with            a short index future that protects against the market fall.
consistent returns for some time but is only recently accessible          Therefore, what sets GARS apart is our ability to utilise
to retail investors. There is now a range of absolute return funds     investment strategies across a range of asset classes. Some
available, with a wide variety of objectives, investment strategies,   absolute return funds have a narrow focus, investing in just one
asset allocations and performance.                                     asset class, e.g. equities or bonds, or one specific area. However,
   At Standard Life Investments, we recently launched our              we can scour the globe, leaving no stone unturned in finding
Global Absolute Return Strategies Fund (GARS), which aims              those strategies that will deliver the required performance.
to deliver consistent, positive returns in a variety of market            In addition, by using derivatives skillfully and methodically,
conditions. Using cash as a benchmark, we seek to deliver a target     we can generate positive returns even when markets are falling.
return of LIBOR +5% p.a. (gross of charges) over rolling three-        The key to doing this consistently over time is a robust and
year periods.                                                          repeatable investment process, which allows proven and talented
   In doing so, we apply a dynamic multi-asset approach using a        fund managers the freedom to invest in their best ideas with
diverse array of return-focused investments. This includes:            conviction, and without the constraint of staying close to a
• Market returns from traditional asset classes, such as equities,        Our institutional GARS Fund has delivered a 7.3% annualised
  bonds and property                                                   return.* We have achieved this within our anticipated volatility
• Opportunistic investment strategies: market opportunities            and in particularly challenging market conditions, at a time when
  which we anticipate will deliver positive returns on a three-        many other assets have suffered significant losses. This was down
  year view, such as credit spreads, inflation and duration            to the skill and expertise of our multi-asset team, which contains
• Relative value opportunities between or within markets               over 20 talented individuals from across the investment industry.
• Stock selection, generating performance through the proven           Their achievements were recognised when we were named
  stock selection expertise of our asset class managers.               Multi-Asset Manager of the Year at the UK Pensions Awards
  We also routinely use derivatives to implement these strategies         Overall, the competitive and diversified returns on offer also
in a cost-effective and timely manner.                                 make GARS an ideal basis for a portfolio. IFAs can then employ
  The merest mention of derivatives can often be enough to put         a core and satellite approach, with GARS at the core while adding
off advisers, who associate them with hedge funds and deem             value for clients by selecting satellite funds in individual asset
them as too risky. However, this need not be the case.                 classes. Alternatively, GARS can help to diversify a client’s
Used carefully, derivatives offer an effective means of                existing portfolio, adding an absolute return element to sit
implementing market views and managing risk.                           alongside traditional investments.
  For GARS, we generate returns by investing in those strategies       * Source: Standard Life Investments – institutional pension fund, from inception to
offering the best return prospects at any given time. Derivatives      31/07/08.
 22 - investment special                     issue 29 autumn 2008

        and wrappers

  Platforms ~ A collective phrase covering wraps and                  need to make sure that it does not simply increase complexity
fund supermarkets. Fund supermarkets tend to offer a wide             and costs to your clients without giving them new services they
range of unit trusts and OEICs, whereas wraps replicate               value in return.’
this, and also offer access to a number of other products
too. Wraps also often offer support to IFAs wanting to agree          Why wraps will never be the whole solution
their own remuneration with clients rather than take a                   Platforms in the UK market will be finite, with constraints
commission.                                                           coming from both provider and IFA perspectives.
                                                                         It’s strategically important for platform providers to be
Are wraps the future?                                                 supporting IFA distribution in their migration to platforms.
  Platforms have long been heralded as the revolution in the          This is because profits from the provision of platforms are
UK financial services market. High levels of usage in the US          directly related to scale, and IFA distribution is currently the
and Australian markets are often sited to give substance to this      main route to winning market share and building scale. But this
prediction. Yet in the UK, although momentum is building,             could change. One issue is that the UK market is oversupplied.
uptake is significantly slower, and penetration is less widespread    Consolidation is talked about, and maybe necessary to reap the
than pundits predicted. In short the revolution hasn’t happened       returns on investment that platform providers seek.
yet. The question is will it ever?                                    It will allow the financially strongest providers to buy market
                                                                      shares in the future. Additionally, platforms are not cheap to
Holistically, what are the barriers to change?                        create, and should providers fail to achieve expected returns on
   The UK financial services market place is the oldest and most      significant investments made into this marketplace, there is a
established in the world. As a result, it is oversupplied,            real risk of dis-investment.
fragmented and has more pronounced behaviours than many
other geographic markets. For example, many markets have an           For the IFA there is a set of different issues.
independent distribution sector, but in the UK this is not only          The biggest benefits to IFA platform users of efficiency, time
the dominant distribution channel, it’s also predominantly made       and costs can be reaped from the adoption of a single
up of fiercely independent firms and individuals. This brings         wrap/platform solution, which meets the majority of the IFAs’
potential benefits to clients in terms of delivery of genuine         clients’ needs. The problem is that IFAs have not built client
independent advice. Conversely, it also limits the ability to drive   banks over the years with this in mind – most IFAs have a wide
behavioural change at industry level.                                 range of client types. In addition there is also a reluctance to
                                                                      commit to a single platform provider as it is perceived to threaten
Specifically, why are wraps being more slowly                         IFAs’ independence, evoking fears of being owned by platform
adopted?                                                              providers or being too dependent on one manufacturer. These
  No one is denying the obvious benefits that wraps and               factors combined mean that a large number of IFAs often use
platforms can bring to advisers - reduced costs and increased         more than one platform, which brings some efficiency but will
efficiency gained from slicker administration, and the increased      not optimise their gains. This is impacting on the benefits IFAs
access to information and updates via online portals, all of which    are seeing from the adoption of platforms in the early years, and
combine and translate into a potentially enhanced service to the      potentially will impact on the levels of business held on platforms
end client.                                                           in the future.
  The issue here is not whether platforms are a good concept             An additional consideration is the level of training and support
or not, it’s about appropriateness – and that means appropriate       required by IFAs in order to adopt a technology-driven solution.
to the IFA’s business model and the needs of the end client.          The level of complexity and completeness of platform
                                                                      propositions is increasing all the time, and this correlates directly
As the FSA’s Platforms fact sheet puts it:                            with the level of IT skills required to operate and exploit the
  ’Using platforms could improve your administration and,             functionality of the technology to the full. With mobile phones,
through this, the services you can offer your clients. But you        most users utilise a fraction of the functions provided and
                                                                      issue 29 autumn 2008           investment special - 23

therefore never really see the benefits of the full range of            both fee-earning potential of the client to the IFA and client
features. Wraps are no different. Providers like AXA are offering       involvement, which can best be described as the amount of time
an 11-week training course for IFAs wishing to adopt their new          they have available to be involved and their level of interest in
wrap platform. IFAs need to be completely convinced of the              their investments.
benefits the wrap can deliver to their business and clients given          For many lower-value clients, represented by the two left-hand-
the amount of time, and potential income, that needs to be              side quadrants, investments solutions are relatively simple and
sacrificed in order to become a competent user. For many this will      straightforward. It is questionable whether they will benefit from
be a barrier to adoption.                                               the additional functionality that a wrap offers in terms of
   Let’s not forget that while platforms make life easier to            investment choice and tax wrapper available. This creates a
manage, they don’t take away all the pain. Key to this is the issue     dilemma for the IFA. Where relatively low trail fees are paid in
of setting up and managing model portfolios. While the provision        relation to the value of the funds under management, regulation
of online planning tools and a trading platform make                    and client demands can require a level of service that the fee
set up and management much simpler, the wrap does not negate            does not cover. The IFA either needs to agree a revised
the need to create the paper trail that sits alongside such model       remuneration package, or provide an alternative service.
portfolios i.e. research, gaining client agreement to deals,               Equally for those in the bottom two quadrants, who typically
transacting deals online etc. Nor does a platform update the            have low levels of time to spend managing their investments,
investments portfolio any more often than the adviser can afford        and/or have low levels of interest, the construction of model
the time to sit down and review it. So what are the genuine             portfolios may be an overly complex and involved solution to their
benefits that platforms offer clients and who should they really        financial needs. These clients will often seek financial advice as
be aimed at?                                                            much for the removal of the ‘hassle’, as for the specialist advice
                                                                        they receive. For the higher net worth clients in this bracket,
Who are wraps right for?                                                there could still be reasons to select a platform proposition as
   In its simplest form a platform is an internet-based service         opposed to a product-based approach in order to benefit from
used by IFAs to view and administer investments. Attached to            having all investments viewed and managed from one place.
this basic functionality are usually a range of tools which allow          Clearly the strongest synergies with the solution provided by a
the adviser to view and analyse the client’s overall portfolio and      platform sit with the higher net worth group, who also have high
to choose tax wrappers and investment options for them. Often           levels of time and interest in their investments. Here the wrap
the client can be given access to all or some of these functions.       truly supports the need for a wider range of investment options
   Lets start by looking at the benefits to clients. Clients can        and tax wrappers, and easy access to information. In addition to
see all their holdings in one place – regardless of what product        this, the IFA is highly likely to be able to agree appropriate
wrappers have been selected. This means that understanding of           remuneration with this type of client.
the holistic picture is easier from a client perspective, and can
be particularly useful in terms of preparing for tax returns. In        So if not platform, then what?
addition to this, active management of portfolios within certain          This approach leaves a number of clients for whom the benefits
tax wrappers can be done more effectively than before, without          when weighed up with the costs and complexity of a wrap are not
creating potential tax charges. Additionally, a single investment       justified. Other investment solutions such as a risk-rated fund of
strategy can easily be applied over a range of investment               funds portfolios are often an appropriate proposition to meet
products. From a practical perspective, it can make the trading         these clients’ needs, who either have simplistic needs or require
associated with managing a model portfolio less time consuming          a hassle-free, yet actively managed and diversified solution.
for the adviser, and allows him to offer this service to a wider          Sinfonia Asset Management lead the way in providing a
number of his clients than he might have done before. Lets not          comprehensive fund of fund-based proposition, targeted at
forget, what it does not do is eradicate the burden of paperwork        exactly these groups of clients.
for either the IFA or the client.
   So given this, what are the benefits to clients, who will really     What is Sinfonia?
value the increased services a platform can offer?                      First of all – it’s not just another fund of funds offering.

                                                                           Sinfonia has designed an end-to-end investment process that
                                                                        can be used to satisfy investment growth and income needs, and
                                                                        is available as an OEIC, ISA and SIPP. Using an intelligent
   Client time                                                          investment needs analysis tool it directly links the client to one
     level in                                                           or more of the IFSL Sinfonia sub-funds in order to meet their
  investments                                                           defined needs. The sub-funds are actively managed on a fund
                                                                        of funds basis – meaning that the fund structures and underlying
                                                                        fund investments are constantly realigned to ensure that
                                                                        investment objectives are achieved.
                                  Fee earning potential                    What makes Sinfonia unique is the pulling together of the
                                     of client to IFA                   component parts of the proposition that support every stage of
                                                                        the advice process – from needs analysis through to conducting
  Consider this simple matrix approach, which divides clients by        regular reviews with the client.
 24 - investment special                      issue 29 autumn 2008

   Traditional propositions in the marketplace have focused              Use appropriate experts at
more on supporting and rewarding the IFA at point of sale –            each stage of the investment
Sinfonia seeks to provide sustainable support and reward to the        process and knowledge that their
IFA throughout the lifetime of a client relationship.                  investment is actively managed on an
   Sinfonia offers a range of benefits to the IFA, including an        ongoing basis. It also provides value for
enhanced investment process supported by the relevant experts          money – a competitively priced product,
at every stage, reduced exposure to regulatory risk through the        clearly showing product pricing and IFA costs.
provision of an ongoing end-to-end process and the ability to
automate annual reviews.                                               Will the wrap revolution ever happen?
   On top of this, it allows the IFA greater flexibility in agreeing     One size does not fit all, and it is unlikely that
the right level of service and fee with individual clients, and puts   platforms will ever be adopted in the UK to the scale
a greater share of the value chain on the table for consideration      they have been in the US, for example.
in this decision. This is initially through the waiving of Tenet         We should expect a further increase in use of platforms –
retention fees and in the longer term through acquiring a share        where it’s appropriate to clients’ needs, particularly for higher
in the value of the business they place with Sinfonia.                 net worth clients who have high levels of involvement with their
   For clients, Sinfonia enhances an IFA’s offer through the
                                                                         But, also expect to see increased usage of solutions like
provision of a truly end-to-end investment process.

you with
a Clear
   Current economic circumstances and key decisions around             several hundred advisers. If you missed this, you can still view the
initiatives such as RDR mean that we are at a pivotal point in         event at: where you can
the development of independent financial advice.                       watch some or all of the following:
   Successful IFA businesses are likely to be those that can
differentiate themselves from other advice or distribution routes      • Climate Change - A New Opportunity for Enhanced
through their higher knowledge and greater quality of service.           Performance? - Virgin Money
There are certain sectors of advice that particularly lend             • UK Equities - The Current Landscape, Invesco Perpetual
themselves to this opportunity and we believe that one of those        • Money Markets - The Future - New Star
is investment. Greater volatility and investor uncertainty along       • Fear and Opportunity: Where is the smart money going? -
with the ever growing range of investment vehicles and options           Sinfonia
increase the need for advice. Those advisers who have the              • Why have Market Volatility when you can have Absolute
necessary skills and knowledge will therefore be ideally                 Returns? - Clerical Medical Insight
positioned to take advantage of this position.                         • Investing for Income - Schroders
   Clear is designed to assist you with specific investment
solutions including the Sinfonia range of funds and the OBSR-            Our next scheduled event is 11 December, where we will
driven model portfolios.                                               feature more top speakers from the likes of Investec, Henderson,
   However, it is also a source of education which is why we have      Threadneedle, Martin Currie, M&G, Schroders and New Star,
secured the support of a number of leading fund managers, who          so watch out for further communications nearer the time.
are a part of our programme of Virtual Investment Forums this            As we all know, knowledge is power, and what more efficient
year, where Richard Romer-Lee, the founding director of OBSR           way to improve your knowledge than interaction with the leading
and the manager of the Tenet Clear investment portfolios,              experts in fund management without the need to leave your
interviews a panel of expert fund managers.                            own office.
   Our last event was screened on 15 July and was watched by
                                                                    issue 29 autumn 2008             investment special - 25

Building for the future

   What a difference a year makes! Eighteen months ago, retail          The bear necessities
investors were investing heavily in commercial property funds,             With the UK market having recently fallen more than 20%
attracted by their relatively high and stable incomes, capital          below last October’s peak, some commentators have suggested
growth potential and diversification benefits. However, the             that we are now officially in a bear market.
onset of the credit crunch in August last year saw UK commercial           So is this true and if so how long will it last? Without a crystal
property experience its most significant falls in capital values        ball it is hard to say for sure, but some are predicting depressed
since the early 1990s.                                                  prices for the next couple of years.
   The change in sentiment towards real estate has been                    There is a silver lining to this cloud, however. Compared with
dramatic, leading to a sharp increase in redemptions from               the last bear market at the beginning of the decade, retail
property funds. Financial markets remain volatile and capital           investors now have far more options to help them ride out a
values are likely to remain under pressure for the rest of this         falling market.
year. So investors should avoid them like the plague, right?               Until recently, retail investors were largely restricted to four
   Not according to ING Real Estate Investment Management,              asset classes: equities, fixed interest, property and cash. However,
part of the world’s largest property investment group and               new regulations allow investment managers to hold a wider range
manager of the Skandia Property Fund. It believes that the key          of assets as well as using derivatives to create ‘short’ positions in
attractions of property funds remain firmly in place.                   assets that they think will fall in value.
   Rental income traditionally makes up around 50% of the                  Skandia offers three exciting solutions that can work well in
returns from property and tends to become even more important           current market conditions. Importantly, unlike some ‘bear market’
during periods of low or falling returns. The underlying nature         solutions, all have the potential to produce attractive returns over
of UK leases (typically with long duration and upwards only rent        a full market cycle.
reviews) has enabled income returns to remain remarkably stable.           The Spectrum range of six risk-rated funds, available
Indeed, income growth has remained positive even during                 exclusively through the Skandia platforms, includes several
economic recessions, such as in the early 1990s.                        managers investing in cash as a strategic asset class. It also invests
   IPD (Investment Property Databank) figures show that the             in the Fulcrum Alternative Beta Plus Fund, designed to provide
average initial yield on UK commercial property rose to 5.48%           the benefits of hedge fund investing without the usual drawbacks
in April 2008 from a low of 4.57% last summer. At this level,           such as cost and opacity.
property yields are beginning to look attractive, particularly when        The Alternative Investments Fund offers access to ten
compared with equities and Gilts. This is stimulating renewed           ‘alternative’ investment strategies and asset classes, while its
demand, particularly from overseas and institutional investors,         exposure to equities is approximately halved through a ‘short’
who have been active since the start of 2008.                           position on the component parts of the MSCI World Index.
   There will not be a return to the exceptional performance of            The UK Strategic Best Ideas Fund, launched last September,
recent years.                                                           is an equity fund that invests in the best ‘long’ and ‘short’ ideas
   Instead, following the current price correction, the manager of      of ten outstanding managers. Each has the freedom to range
the Skandia Property Fund anticipates that property will shortly        between ‘100% long’ in a raging bull market and ‘market neutral’
revert to its traditional role of providing relatively stable returns   (i.e. 50% long/50% short) in extreme bear market conditions.
and diversification benefits to a client’s investment portfolio.
For full details, please ask your Skandia sales consultant.             For full details ask your Skandia sales consultant.
 26 - investment special                         issue 29 autumn 2008

The effect of cash on the overall ISA risk/return                             This scenario may be something that many would be
measures                                                                    uncomfortable advising on. However, the transfer regulation
   From 6 April 2008, new ISA regulations allowed cash ISAs to              changes have enabled a more moderate alternative – reducing
be transferred to stocks and shares ISAs. There was great                   the proportion held in cash while taking on a slightly higher
expectation that given the potential benefits, significant amounts          proportion of equities.
would move across into stocks and shares ISAs; however, five
months later investors still appear to be holding back. As                  Meeting expectations
transferring cash to stocks and shares is a one-way process,                   Taking a holistic view regarding the split between cash and
caution arising from the recent market downturn is likely to be             stocks and shares ISA holdings, may reveal that a client’s overall
a major factor.                                                             investments do not match their risk appetite and are failing to
   Of course, individual circumstances affect any transfer decision,        reach their full potential.
but it is vitally important to assess the balance of cash in the               It is important to review clients’ portfolios to ensure that funds
context of the ISA portfolio as a whole – and to ensure the                 are performing as expected and remain within their risk
portfolio continues to adhere to the client’s expectations.                 expectations. Skandia’s online investment tools allow you to do
                                                                            this at the touch of a button.
Reducing volatility                                                            *Risk 5 portfolio assumes £4,000 invested annually, Selestia Risk 5 asset
   Low volatility asset classes can have a dramatic effect on the           allocation model (48% UK fixed Interest, 18% UK Equity, 9% North
overall portfolio volatility. Cash and fixed interest enjoy much            American, 9% Europe, 5% Japan, 3% Far East ex Japan, 3% Emerging
lower volatility than most equities, and when included in a                 Markets, 5% Global Specialist). Performance is based on the IMA sector
portfolio alongside equities can reduce overall volatility significantly.   performance on a bid-bid gross total return basis from 1 January 2000 -
   Figure 1 shows how the overall risk level decreases as the level         1 June 2008. Cash returns assume £3,000 invested annually and
of cash increases. With just 8% overall held in cash, the Skandia           performance in line with Bank of England end month average interest rates,
Risk level drops from five to four. It then drops to Risk level 3           cash ISA account – Building Societies' (IUMWSIS).
with 25% cash overall, and to Risk level 2 when cash reaches                   Figure 1 – assumes Risk 5 mid-range volatility, 10.29%. Cash volatility
46% of the portfolio.                                                       data is provided by Watson Wyatt.

Risk adjustment
   Taking a holistic view of a client’s assets can have a dramatic                                                                               Risk 6
effect. Take for example a Skandia Risk level 5 client investing
                                                                                                                                                 Risk 5
into ISAs. If since the advent of ISAs they had fully utilised their        10%

annual ISA allowances, their stocks and shares component would                                                                                   Risk 4
have grown to approximately £45,000, while cash would have                   8%

grown to over £33,000* ignoring the impact of wrapper and                                                                                        Risk 3
dealing charges.                                                             6%

   Cash represents 42% of this combined ISA portfolio, which
                                                                                                                                                 Risk 2
produces overall volatility very close to the bottom end of Skandia          4%

Risk level 3. This could result in underperformance compared to
the potential returns associated with Risk level 5. To have                  2%
                                                                                                                                                 Risk 1
achieved overall performance in line with their accepted risk
level, the equity investment risk would have to increase to                  0%
Skandia Risk level 10 in order to counterbalance the low volatility
of cash.                                                                                                     % Held in Cash
                                                                  issue 29 autumn 2008            investment special - 27

What if you could offer your clients both security
and growth potential?
   What if you could offer your clients both security and growth      growth in the FTSE 100 Index over five-and-a-half years or 30%
potential? Zurich logo                                                gross interest if the FTSE 100 grows by 30% or more at the end
   The current economic situation, with high levels of volatility,    of the first three years.
profit downgrades and concerns over future market growth, is             What’s more, if your clients are concerned the FTSE 100 Index
causing individuals to re-evaluate their appetite for risk. With      may fall, this account guarantees they’ll still get back all of the
this as a backdrop, clients can either see this as an opportunity     money they invested.
or a threat.                                                             They can also receive some of their interest tax-free by using
   For those customers seeing this as an opportunity and prepared     their Cash ISA allowance for the 2008/09 tax year and/or transfer
to accept the risks, Zurich offers a wide selection of funds within   in existing Cash ISA money.
its Pension and Investment tax wrappers to choose from.
   For customers seeing this as a threat, and therefore, unwilling    This is a limited offer!
to take any risk, Zurich offers the Guaranteed Capital Account 20       GCA20 is only available until 23 October 2008. Dunbar Bank
(GCA20).                                                              must receive your client’s application form by this date.
                                                                      For more information, please call your Zurich Intermediary Group
Security and Growth                                                   consultant on 0500 546 546.
  GCA20 is a deposit account that gives your clients 120% of any

  Green Guaranteed Account 2 open for business
     Energy has been a hot topic recently and no wonder.                    What’s more, the GGA2 also offers
   From escalating costs of traditional fuels to the impact of           customers peace of mind and security with our
   global warming, it’s becoming increasingly important for the          100% money-back guarantee. And they can also receive
   world to find alternatives. And there are some innovative             some of their interest tax-free by using their Cash ISA
   companies doing just that. They’re often called ‘green                allowance for the 2008/09 tax year and/or transfer in existing
   businesses’.                                                          Cash ISA money.
     The GGA2 is a five-year deposit account. The account
   gives customers two options of any growth in the ‘RBS                 Key dates and an Early Bird Bonus!
   Green Index’. The ‘RBS Green Index’ brings together 30 of               Make sure you contact your clients as soon as possible as
   the largest companies operating in green business sectors             we are offering an Early Bird Bonus of 0.33% on applications
   globally. These companies operate in a variety of exciting            received before 29 September 2008. This can be paid either
   and challenging new ways; including biotechnology, biomass,           into your client’s account or an equivalent contribution
   hydroelectricity, solar energy, wind energy, energy                   made to a carbon offset fund on their behalf.
   management services and materials for energy-use
   reduction.                                                            This is a limited offer!
                                                                           GGA2 is only available until 28 October 2008. Dunbar
   A choice of savings options:                                          Bank must receive your client’s application form by
   Option 1 – will give customers the higher of a guaranteed             this date.
   minimum return of 15% or 60% of any growth in the Index
   Option 2 – has no guaranteed minimum return but gives                 For more information, please call your Zurich Intermediary
   customers 100% of any growth in the Index.                            Group consultant on 0500 546 546.
                                                            issue 29 autumn 2008           business development - 29

The all new Member Extranet
  As covered in the last edition of Connected, we have been             During the re-build, we have also undertaken a cleansing
undertaking a project over the last couple of months to               process, which in essence involved the removal of old and ‘dead’
completely rebuild the group’s Extranets and I am pleased to          material and links, ensuring you only have the most up-to-date
say that this has now been completed!                                 information at your disposal.

                                                                        On top of this, you will also notice from the moment you log
                                                                      on, that we have added a number of sub- divisions to the home
                                                                      page, which will allow you to access the support you need as
                                                                      quickly as possible – with the addition of a few little extras to
                                                                      help make life that little bit easier.

So – what’s new?
   Well, the most obvious thing is a new look and feel!
   We have taken this opportunity to give the site a fresh new
look, which is not only more aesthetically pleasing, providing a
consistent look throughout the site, but enables us to reposition
some of the key messages.
   While adding regular content to the site is a good thing, it can     The new site is built on a new high-tech Content Management
often mean that visitors are not sure what is new or indeed what      System (CMS) which means that each department within Tenet
is of importance. So the new home page provides a good platform       can now update their own area, providing you with an even
from which to highlight the latest initiatives.                       quicker and more robust service.

                                                                        All of this should mean you can find what you want more easily
                                                                      and to make sure this is the case, a new site map and search
                                                                      engine have also been added.

                                                                        Work is already underway to look at the next phase of
                                                                      development, designed to make the sites more dynamic and
                                                                      interactive, something which we have kicked off with our first
                                                                      ever Online Member Forum. The forum is designed to offer
                                                                      members an informal way of swapping ideas, sharing experiences
                                                                      and asking each other questions.

                                                                      To access the forum visit
 30 - special feature                   issue 29 autumn 2008

Creating the right image
  Does your identity do you justic

            n an ever changing and challenging                                We often hear about enormous sums of money spent on simply

    I       market place correct positioning of your
            business is essential but how do you get
            passed the ‘smoke and mirrors’ world of
corporate identity and brand marketing?
                                                                           ‘a logo’ – if only life was that easy!
                                                                              Exhaustive research and development as well as literally 1000’s
                                                                           of deliverable items go into a major brand and projection and
                                                                           guidance for at least 5 years into the future is the norm.
                                                                           On a more relevant scale we all know that products and services
                                                                           evolve and adapt continually as does human nature so how come
Connected asked Leeds based agency                                         so many advisors within the financial industry don’t reflect this in
Open Door Design for their observations and                                their corporate identity or marketing material and are still using
                                                                           the basics that sufficed many years ago?
views and gained a few tips along the way.                                 The answer is quite simple – they
                                                                           have not really had to worry about
   Working within the financial sector for over 16 years now – we
                                                                           it too much until recently!
have seen massive changes in brand positioning, product offerings
and routes to market. However one thing experience has taught us             We believe independent
it that if you stay true to your instincts, core values and personal       professional services such as
beliefs you stand a good chance of success!                                lawyers, accountants and financial
   Corporate identity and good positioning strategy are in our             advisors were very late into the
opinion simply an accurate reflection of your business ethos mixed         marketing arena and once the major
in with product offering and a bit of personal opinion! It becomes         players promoted brand values,
more complicated when we consider outside influences such as               competition increased, the public
competition, regulation and market trends but the basic foundation         became more aware and the gloves            Dean Evans
of a good identity still remains at the heart of all marketing activity.   really came off!!                           Chairman of
                                                                                                                       Open Door Design

Top Tips for Creating a Better Brand
1. Identify your existing and potential target audience –                     those with a proven track record – does not necessarily all
   this leads to a focused brief                                              have to come from within the industry we can learn from
2. Document your unique sales potential and most profitable                   other successful businesses
   products/services – reduces the ‘fishing’ exercise and saves            5. Involve your team – this needs to be a joint effort but don’t
   time and money                                                             design by committee – it’s expensive and takes too long!!
3. Analyse your resources for marketing activity (both                     6. Give examples of things you like – this is where the personal
   financial and human) then develop a plan – little point                    element comes in
   spending money in areas you either do not require or                    7. Be creative in your thinking and keep an open mind – some of
   cannot materialise                                                         the best ideas need looking at once or twice and may not be
4. Seek input and advice wherever possible, preferably from                   the ones you expected to get back!
                                                                             issue 29 autumn 2008             special feature - 31

  Key Elements/
  Health Check
  There is a logical order to brand creation and development and
  the creative process should be transparent. A suitable time
  scale and budget should be agreed prior to commencement.

  This process does not have to be expensive and as painful as is
  often the belief and if undertaken correctly (by both parties)
  the end result will pay dividends.

“ We believe independent professional
  services such as lawyers, accountants
   and financial advisors were very late
   into the marketing arena and once the
   major players promoted brand values,
   competition increased, the public
   became more aware and the gloves
   really came off!
  Logo/Brand Identity                                                     Added Benefits
  Does your current logo correctly portray and reflect your               The main benefit and fundamental objective of this whole
  business? Do all the elements work together, do you have a              process (if correctly organised) is to consolidate existing business
  positioning strap line if necessary and are all the fonts used clear,   and generate growth in new business. The added benefits are
  coherent and work across all platforms?                                 substantial for any size of company including areas such as clear
  Have you access to your identity whenever required – An agency          definition of goals, improved team spirit and staff motivation.
  provides a useful ‘hub’ for your activity or can simply provide         Support from suppliers and partners alike will improve and also,
  your Brand to you in many formats.                                      as a consequence, you will experience increased pride and
                                                                          enthusiasm throughout the business.
  Marketing Tools
  Do you have sufficient tools to do the job?                             Visual proof of your efforts is a nice tangible reward but finally
  Stationery, sales literature, newsletters, promotional items,           it’s a great reason to contact all your existing and potential clients
  advertisements. Recent developments in print technology                 – bringing them up to speed with your current offering.
  now provides a lot more for your money (and lower quantities
  if required)

  Web/On-line Activity
  Undoubtedly one of the most powerful brand awareness tools                  To find our more about brand and positioning or
  available but unfortunately over time we can lose sight of the              simply explore some ideas contact Richard Ardron
  target audience and our objectives. A good website is an                    Head of Group Marketing on 0113 239 0011 or
  extension of your identity and the end user should always come              Dean Evans on 0113 270 1600.
  away feeling valued and with a good impression.
  Lots of news, products and services and the facility for plenty of
  input and interaction throughout the site will help differentiate
  you from your competitors.
                                                                              To find our what’s new at Open Door Design
 32 - non-investment special                         issue 29 autumn 2008

                                                                         Guardian are currently presenting at the LIME roadshows
  on-investment s
                                                                       which are now underway. Also supporting the roadshows is
 N                                                                     Chris Cummings, Director of the Association of Mortgage
                                                                       Intermediaries (AMI). Chris’s session has been particularly well
   The latest from LIME                                                received and is very topical in this current climate. This session
                                                                       further highlights the many benefits of being a member of AMI,
                                                                       some of which are
             n an economic downturn, with rising inflation and

  I          living costs, consumers are being forced to tighten       •    Regular industry updates
             their belts. It comes as no surprise that some people     •    Newsletters
             are finding it difficult to manage their budgets and      •    Fact sheets
             the need for support/guidance continues to rise.          •    Member website
             This could be as simple as a review of income and         •    Helpdesk
expenditure, to worst case scenario where they are simply unable
to meet their current commitments and need to take action.                Please don’t forget that as a LIME member you automatically
                                                                       receive free membership to AMI and details of how you can
  With this in mind we have added an additional service and            register can be found on the LIME Extranet.
network guidance on how you can offer your clients help in this        It is our objective at LIME to be forward thinking and ensure our
area. You may want to offer assistance to your clients as to how       service offerings develop in line with industry changes and
they can help themselves or utilise the services of a Debt             consumer needs, keeping you fully informed. More in-depth
Management Company who are experts in the field. LIME have             information can be found in our quarterly publication
appointed to panel Guardian, an established Debt Management            LIMELIGHT, on our member Extranet and through regular email
Specialist, through which you can refer your clients.                  updates should this be of interest to you.

                                                                       have a concept of Whole of Market, its equivalent status is Fair

  Elite                 - Whole of Market
                        Protection Panel
                                                                       Market Analysis – which is the basis for the new Elite Panel.)
                                                                         The current 6 Providers are AEGON Scottish Equitable, AXA,
                                                                       Friends Provident, L&G, Norwich Union and Zurich. These have
                                                                       been carefully selected using the following criteria:
   In response to feedback from the membership we were
delighted to announce the relaunch of the Elite Protection Panel       1.   Financial Strength
as a ’Whole of Market‘ proposition on 5 August 2008.
                                                                       2.   Service
   The new Elite Protection Panel offers members the best
of both worlds thereby receiving the benefits of enhanced              3.   Product Comparison (Qualitative and Pricing)
commission rates for protection, yet maintaining the Whole of          4.   Deal Flow
Market ethos.                                                          5.   Final Assessment and Placing

Best Providers and Products                                            Best Process
  The Elite Protection Panel has been constructed by our highly          By having the ‘foundation research’ carried out in identifying
regarded independent research team to comprise some of the             the Elite Panel, there are fewer providers to deal with, saving
best protection providers in the marketplace, offering the very        time on process, compliance justification, research and
best in protection solutions, with competitive pricing structures      underwriting, with all parties agreeing a faster underwriting and
through Fair Market Analysis. (Whilst Pure Protection does not         application process, along with increased tracking accuracy.

Superior Remuneration
  The comparison table below provides a real indication of the typical increases in commission provided by Elite:

                                         NON-ELITE                                       ELITE

                                                                                                                        Typical Gross
                                                           Earnings                                     Earnings      Commission Uplift
   Elite Provider               Lautro         API          Period          Lautro         API           Period          Percentage

   Scottish Equitable           165%          184%           4 year         170%           190%          4 year              3.03%
   AXA                          169%          189%           4 year         180%           201%          4 year              6.51%
   Friends Provident            158%          186%           4 year         170%           201%          4 year              7.59%
   Legal & General              155%          173%           4 year         165%           185%          4 year              6.45%
   Norwich Union                160%          189%           4 year         170%           201%          4 year              6.25%
   Zurich                       165%          195%           4 year         170%           201%          4 year              3.03%

For further details on how to apply for Elite, please contact your Support & Development Manager or visit the Elite section on the Extranet.
                                                                      issue 29 autumn 2008      non-investment special - 33

Protection Adviser
  Norwich Union has improved the
support we provide for Business Protection
and have now launched a new Business
                                                                                  Don’t leave
Protection Adviser Toolkit to provide
advisers with the tools to identify the
Business Protection needs of their clients.                                       your clients’
  The toolkit includes:
  • Online Business Protection Toolkit
  • A Business Protection Adviser Guide
                                                                                  critical illness
  • A Business Protection Client Guide

Online Business Protection Toolkit
                                                                                  cover to chance
   Visit or the Business Protection
area on the Norwich Union Adviser Sales Centre for access to all of
the tools and advice you will need to grow your business and help your            If one of your clients is unfortunate enough to be
clients protect theirs. Our online toolkit includes:                              diagnosed with a critical illness, the last thing they’d
  •    Advice on how to profile your existing client base                         want is to find that their condition isn’t covered.
  •    Help in identifying your clients’ needs                                    That’s why we’ve improved our critical illness
  •    Prospecting letters                                                        proposition.
  •    Information on overcoming objections and conversation starters
  •    Case studies
  •    Access to the Norwich Union Business Protection                              We now cover 36 conditions, including five new
       document library                                                             illnesses:
  •    The information you will need when your client needs to make                 • rheumatoid arthritis
       a claim
  •    Contact numbers for the Norwich Union Business
                                                                                    • encephalitis
       Protection specialists.                                                      • open-heart surgery
                                                                                    • primary pulmonary hypertension
Business Protection Adviser Guide                                                   • systemic lupus erythematosus
   This guide aims to deal with any concerns that you may have
around the complexity of Business Protection. Inside you’ll find:
                                                                                     But it’s important to remember that the best critical
  •    Descriptions of the different types of Business Protection                 illness policy isn’t simply the one that covers most
  •    How life insurance can be used as a solution in protecting your
                                                                                  illnesses. That’s why we’ve also enhanced three of our
       clients’ business
  •    Information about taxation                                                 existing definitions to ABI+, giving us four ABI+
  •    Help in identifying potential leads from your existing                     definitions in total.
       client base
  •    Case studies
  •    Useful information about the Norwich Union underwriting
                                                                                    We’ve also:
       and claims process.                                                          • launched a support helpline for
                                                                                       policyholders through Care First
Business Protection Client Guide                                                    • reintroduced guaranteed rates for stand-
   A client-facing guide intended to assist you in your discussions
around the need for Business Protection with your clients.                             alone critical illness protection
Alternatively, leave this behind when you are arranging follow-up                   • removed three standard policy exclusions
appointments. The guide covers:                                                     • introduced new claims criteria for overseas
  •    Why Business Protection is important                                            claims
  •    Information to help clients appreciate the need for                          • increased our maximum term from
       Business Protection
                                                                                       25 to 40 years
  •    Case studies
  •    The service your clients can expect from Norwich Union.
                                                                                    Our changes mean that more people will potentially
Business Protection from Norwich Union                                            be covered – and our definitions will be clearer. So it’s
 Norwich Union offer three types of Business Protection cover
                                                                                  easier for your clients to understand exactly what
  •    Key Person Protection                                                      they’re covered for.
  •    Share Protection
  •    Loan Protection                                                              For more information about our improvements,
  The products available are Level or Decreasing Term Assurance                   speak to your usual AEGON Scottish Equitable sales
with and without Critical Illness cover. You can access the Norwich               consultant or visit
Union Business Protection Adviser Toolkit by visiting or the Business Protection area of
                                                                                    This communication is for professional financial
the Norwich Union Adviser Sales Centre. Supplies of the Business
Protection Adviser Guide and Client Guide can be requested through                advisers only. It isn’t for private customers and
your usual Norwich Union literature ordering contact.                             shouldn’t be given out to, or relied on by, them.
 34 - non-investment special                                issue 29 autumn 2008

Norwich Union and                                                                Engaging The Business
Trigold join forces                                                              Protection Market
to offer Simplified                                                              Mark Jones - Head of Protection Proposition at Friends Provident
                                                                                    If your main income stream is protection sold off the back of a mortgage,
Life Insurance                                                                   the falling numbers of new buyers and reduced appetite for lending could
                                                                                 be cause for concern. However, it’s easy to forget that there is a world out
   Trigold are the UK’s leading mortgage-sourcing company. They have             there beyond house buyers! So while it may be an initial shock to the
over 26,000 subscribers to their ’Prospector AAA‘ mortgage-sourcing              system, now is a good time to look at other potential sources of income.
software - equivalent to 7-in-10 of the mortgage adviser market. They have       Why not look at other products that are less reliant on the mortgage market
now added Simplified Life Insurance into their software, making it easier        such as business protection? With an estimated 4.5 million businesses in the
than ever for mortgage advisers to sell protection.                              UK, the Business Protection market could provide you with huge
                                                                                 opportunities to generate additional income.
A specific version of Simplified Life Insurance has been created for use
with Trigold. Advantages include:                                                  If you are unsure how to start to tap into this lucrative market, there are a
                                                                                 number of steps you can take to identify and engage effectively with
  •    An indicative life insurance quote will be automatically produced         potential clients for Business Protection.
       when searching for a mortgage. There is no need to enter extra
       details to show the illustrative cost.                                       You should start by taking a look at your existing client bank. Many of
                                                                                 your mortgage clients and corporate or High Net Worth clients may also
  •    This will show the affordability of life insurance and will help you      require this type of cover. You may have already encountered many
       discuss protection needs earlier in the sales process.                    businesses when addressing Inheritance Tax (IHT) cover.
  •    It helps overcome the client objections that either (a) ‘I can’t afford      You will need to be able to identify as early as possible who is the key
       life insurance’; or (b) ’I don’t want to spend more time filling out      decision maker in the business so that your effort is focused in the right
       forms to get a quote.’                                                    direction. We have all heard of stories of hours and days of effort wasted
                                                                                 because the adviser had not been dealing with the appropriate person in the
  •    Simplified Life Insurance has been adapted for offline use – you can
                                                                                 business empowered to make the final decision. The decision maker could
       quote, apply and even get instant acceptance offline.
                                                                                 be, for example, the major shareholder, the MD, or the Finance Director.
  •    The full quote and application will be pre-populated with data from
       the client mortgage search.                                                  Use and improve your professional connections. Work closely with
  •    We have retained the speed and simplicity of Simplified Life              solicitors and accountants, the latter are nearly always the trusted adviser
       Insurance. The application is on the shortened question set and,          that you have to get onside to progress Business Protection.
       for joint life cases, the questions are displayed side by side making
       it even faster.                                                              Join and work through your local Chamber of Commerce
                                                                                 ( There is an extensive national network with
  •    Advisers will receive their full commission payments for business         a comprehensive programme of events that provides a great opportunity to
       submitted, based on their Agency agreement with Norwich Union.            network and promote your services. Read up on Trade Associations
  •    Sometimes we may need to collect answers to some additional               ( and use the Business Link Centre
       questions before a case can be submitted (e.g. about a disclosure).       (
       There is a choice in how to do this – either by online self-service or
       by passing the case to a Norwich Union telephone service.                    Before seeing a client you could obtain their company accounts from
                                                                                 Companies House (, giving you a better
  Please note:                                                                   understanding of their needs. Some providers offer a pre-application
                                                                                 service giving you the opportunity to discuss any issues such as medical
  1.   This will not affect the existing version of Simplified Life on the       disclosure, underwriting limits and tax implications before you have even
       Adviser Sales Centre and industry portals which remain open for           met your client.
  2.   This is not a single tie agreement. We are giving users a quick and          See your everyday business suppliers, like printers, caterers and
       easy way to start writing more Protection business; we are not tying      recruitment agencies as potential customers. Or check out local newspapers,
       them to using only Norwich Union. It will not affect any existing         Yellow Pages ( and Thomson’s Local directories
       arrangements with providers.                                              ( and hold seminars for local business owners,
                                                                                 perhaps arranged with the local Chamber of Commerce.
   For further information please contact your Norwich Union Consultant
or visit for a detailed user guide or for further                 These are just a few of the simple steps you can take to develop your
information on Prospector AAA.                                                   client relationships and start to tap into this market.

 Helping to increase your
 conversion rates                                                                You can use the questionnaire to gather detailed information from your
                                                                                 clients before you call our underwriting helpline. That means you’ll get
    How many times have you quoted ordinary rates for a client, only to          a more accurate pre-sale underwriting decision, helping you manage
 later find out that they have an unusual occupation or hobby? Or they           your clients’ expectations – and helping you get more business on your
 suddenly tell you about a previously undisclosed medical condition?             books faster.

    Then when their premium inevitably increases, they change their              You can download a copy of our questionnaire at
 mind losing you potential business? We know how frustrating and
 disappointing this can be – never mind a waste of time for you. So we’ve        To speak to an experienced underwriter for advice on any
 designed a new pre-sale underwriting questionnaire that could be just           protection query, call 0845 783 5473 or email
 the solution.                                                         
                                                                      issue 29 autumn 2008                    tenet community - 35

New Team and
               New Promises                                            Introducing the team formerly known as Administration…

Improvements from                                                        The New Business Support Team
The Commissions team have implemented a number
of improvements in the last 12 months to streamline
and enhance the services we offer.
  Provider cash receipts are matched and processed more
quickly since the introduction of a dedicated resource to the
chasing of provider statements in the appropriate timescales.
  The average turnaround time for queries raised by our
members has reduced considerably with 95% now being
completed within 24 hours.
  The level of complaints received from members is at an all-
time low with 99% being resolved within 3 days and we now
                                                                       (Names Left to Right) Melissa Bastow, Debbie Inman,
regularly receive positive feedback on the level of service            Sue Thornton, David Harris, Julie Spencer, Jenni Corrigan, Tracey Griffin.
provided by the Commissions team.
  Additional reporting via the Member System has allowed                 I am pleased to introduce the newly named New Business
members to access information on suspense items at a time              Support Team, formerly known as the Administration Department.
convenient to their own business schedules and reduced the             With over 45 years service between us, we have a wealth of
associated downloads from the Extranet and daily email traffic.        experience and knowledge.
  The decommissioning of the BIA system (BAS) in May                     Our role within Tenet is to ensure your New Business is
2008 has brought the full integration of BIA into                      processed quickly and accurately and to assist in the speedy
Interdependence Ltd to a close. This final step facilitates the        completion of policies. We will carry out random quality checks on
processing of all commission receipts for all our members via          your new business submissions and process all Group Scheme
OfficeNet both now and into the future.                                business on your behalf.
  The conversion of the provider statements from paper                   Each member of the team has their own panel of Product
                                                                       Providers who they deal with on a day-to-day basis, ensuring that
format to electronic files (via our third-party association with
                                                                       any correspondence received is issued to you within 24 hours and
IFA Dataflow) has been a great success. This process allows us
                                                                       keeping policy records in Office-Net updated with any changes.
to provide client and policy details on every transaction
                                                                         Our dedicated Help Desk is here to help you with any queries
wherever this information is available from the provider in a
                                                                       you may have, and in particular to assist you with using Office-Net
time-efficient manner.
                                                                       to obtain quotes, new business submissions, reporting etc. In
  We are constantly working to make further improvements               addition, we will also deal with requests for Administrator access,
and with this in mind, we would welcome any feedback on                applications for the Exchange and general help in finding your way
the services we provide now or could provide going forward.            around the Extranet.
Benna Brady                                                            Debbie Inman
Group Commissions Manager                                              New Business Support Supervisor

                                                               After 4 months of training, the 1 October marks the start of a 1085-mile unaided

  IT’S GOING                                                   journey from John O’Groats to Lands End. Only 90 miles a day should mean we
                                                               get this done in just 12 days.

                                                               Over a couple of beers, a good friend agreed to join me on this journey in aid of a

  TO HURT !..                                                  good cause, cancer research. This is no small task for me and I just hope that we
                                                               can raise enough funds to make it all worthwhile.

                                                               Donating through Justgiving is quick, easy and totally secure. It’s also the most
                                                               efficient way to sponsor me: Cancer Research UK gets your money faster and,
                                                               if you’re a UK taxpayer, Justgiving makes sure 25% in Gift Aid, plus a 3%
                                                               supplement, are added to your donation.

 Tenet’s own Head of Sales,                                    We all know someone who has suffered from this disease, so please sponsor me.

 Neil Burroughs, gets on his                                   To sponsor Neil, please visit
            bike for charity                         
 36 - equity release                 issue 29 autumn 2008

Thinking about your business plan and how to maximise
new opportunities? Equity release could present you with
a new and profitable income stream.
  Using equity release to support retirement plans is becoming           Secondly, new customers. As we have seen, the demand from
more popular. In 2007 total equity release lending for the year        consumers is growing. Therefore equity release can be a hook to
reached £1.4bn.* With falling pension provision, increasing life       attract new customers to your business. Make sure your website
expectancy and now the effects of the credit crunch more and           promotes equity release and use other marketing initiatives to let
more being felt by people at or in retirement, it’s easy to see why.   prospective clients know you can advise them on equity release.
                                                                       Also, update your IFAP entry if you have one.
  Advisers are engaging with this market, increasingly seeing
equity release as a solution to helping their clients meet their         Then there are other business contacts – not only solicitors and
retirement lifestyle expectations. So, what does it take to be         accountants but also in fact anybody in your local area, who deals
successful in the equity release market?                               with people approaching or in retirement, with whom you could
                                                                       form mutually beneficial business arrangements.
Understanding your clients
Knowing how those clients who use equity release think, feel and       Help for developing equity release business
act is a key to unlocking business potential amongst your clients.        Depending on the size and structure of your business, you are
Typically, equity release clients will be in one of the following      likely to have different plans in terms of how much business you
groups:                                                                want to write. But the critical fact is – you must have a plan and
                                                                       a clear set of actions to support achieving your goals.
1. Average – getting by, but need to generate extra cash or
   income to meet the rising cost of living                               For help, visit the Just Retirement online equity release
                                                                       resource area located in their Adviser Centre at
2. Aspirational – their income is more than sufficient to meet There you will find a range of useful
   their needs, but they want to be able to access cash to             tips and advice on running marketing campaigns, plus a wealth
   enhance their lifestyle and perhaps make home improvements          of information and insight on the market.

3. Astute – wealthier customers who are maximising the use of            With increasing interest in equity release, make a commitment
   all their assets and may often consider gifts to help other         to service your clients’ needs, because if you don’t – there is
   family members like children or grandchildren.                      always somebody else who will!

Where to generate interest and enquiries:
   Start with your own client base. Most advisers find their                  For more information, please contact Just
existing client base is predominantly people aged 50+. They are               Retirement IFA support on 0845 302 2287
likely to be planning for their retirement and many will have                 or email:
substantial property assets. In other words, perfect prospects for
equity release.                                                        *Source: Key Retirement Solutions Equity Release Market Monitor, January 2008.
                                                                                           issue 29 autumn 2008                  tax planning - 37

                Loan trusts – your flexible friend
                Brian Murphy Senior Financial Planning Manager AXA Sun Life

                            With effect from 9 October 2007, the ability to         estate, but one very important feature of this type of planning is that all
                         use on death any unused portion of a deceased              the growth under the plan will be outside the estate for IHT purposes.
                         spouse’s nil rate band was introduced. This along
                         with remarks made by the Conservatives about               An example makes this clearer:-
                         dramatically increasing the nil rate band or even          • Assume your client purchases a bond for £100,000.
                         abolishing inheritance tax (IHT) altogether have           • No withdrawals are taken and a gross 6% growth rate is achieved.
                         caused some people to think again about the need           • After 10 years, the bond would be worth £160,000. If they were to die
                         for IHT planning. Of course, this thinking is basically        at that time, the IHT liability on the bond would be £64,000.
flawed as the transferable nil rate band on death has not given individuals         • However, if the bond had been written subject to a loan trust then, on
any more than they could have achieved previously by using a discretionary              their death, only the amount of the outstanding loan (£100,000) would
will trust on the first death. And, despite the current opinion polls, it is by         be added back into the estate on which the IHT liability would be only
no means certain that the Conservatives will win the next election or even              £40,000 – a £24,000 saving.
carry out these proposed IHT reforms if they do.
   So we at AXA believe that IHT planning should continue to be very                  It may be that your client would want to take withdrawals from your
important in the future. There are many different types of plan available to        bond each year.
suit your clients’ personal circumstances. We know that there are a                 • If 5% withdrawals were taken, the value of the bond after 10 years
significant number of people, often entrepreneurs who have sold their                   would be £96,900.
businesses or perhaps people who have inherited money from deceased                 • The IHT liability, assuming the bond withdrawals were spent, would
parents and are sitting with large amounts of cash in their bank accounts.              be £38,760.
Whilst they recognise that they need an IHT mitigation strategy, they are           • If you were to pursue the same strategy under a loan trust, and 5%
not comfortable with losing all access to capital. If your client falls into that       withdrawals were taken each year as part repayments of the loan, then,
category, the answer could well be to consider a loan trust.                            should your client die after 10 years the outstanding loan would be
                                                                                        £50,000 on which IHT of £20,000 would be due, giving a saving of
These plans work as follows:-                                                           £18,760.
• Establish a trust, appointing your client and other persons as trustees.
• Then make an interest-free loan, repayable on demand, to the trustees                Of course, as your client gets older and circumstances change, they may
   of this trust.                                                                   well feel that they can afford to make gifts. If this is the case, they can
• The trustees use the loan to purchase a single premium bond.                      execute a deed to waive part or all of their entitlement to the loan
• The trustees then take withdrawals from the bond which they pass                  repayments. This course of action would involve making a gift for
   back to the client as part repayments of the loan.                               inheritance tax purposes and they would need to survive seven years before
                                                                                    the gift falls out of account for IHT purposes.
   From an IHT viewpoint, the granting of an interest-free loan, which is              Loan trusts have been around for a long time – but as you can see from
repayable on demand is not a gift and therefore there are no IHT                    the above, they can still have an important role if your client wishes to take
implications. Depending on the type of trust your client decides to use,            income from their investments but still have access to capital. Or simply
there may be an IHT charge on the tenth anniversary of the creation of the          where they wish to take some action to mitigate IHT but are not certain of
trust and when capital is taken out, but with the correct advice these              their future income and capital needs.
charges can be avoided.                                                                For more information on IHT planning speak to your usual AXA
   On your client’s death, any outstanding loan will form part of their             representative or visit

                        Using Whole of Life                                         guaranteed and reviewable whole of life plans. Guaranteed plans
                                                                                    will pay out a set sum designed to meet an expected future tax
                        to mitigate IHT                                             liability, and premiums are fixed from the outset. A plan such as
                                                                                    Zurich’s, which offers no surrender value, falls into the ICOB
  As a nation – and despite the current recession – we have been                    regime. Reviewable plans run the risk that premiums could
becoming wealthier.                                                                 increase if certain assumptions fail to materialise, such as
  We often hear of the ever-growing number of millionaires in our                   anticipated investment returns (being lower) or actual mortality
midst. Many have worked hard for what they have, and will have                      results being worse than expected. Thus, despite our plan having
plans to leave a legacy to children and grandchildren. They are                     no surrender value, it still feels like a more complicated product
unlikely to have anticipated the potential tax liability on their                   which is why it’s covered under the COB regime.
estates or the various planning options to avoid this.
                                                                                      Zurich has created a powerful tool helping advisers through the
  IHT mitigation is most certainly a growth area within financial                   fact-find process, assessing customer needs and providing an
services. And there is even greater potential, given the relatively                 advice audit trail. If you would like to know more about this
few intermediaries who are involved.                                                market – or simply save yourself time and money – call your local
  A simple life assurance solution may be appropriate, in which                     Zurich Intermediary Group consultant or ring 0500 546 546 for
case there are two life products that can help in this area –                       more information.
 38 - retirement special                    issue 29 autumn 2008

  Retirement Special
The ‘3rd Way’ Retirement Revolution
   The ‘3rd Way’ is the latest catchphrase in the Retirement           rules), and represents a solution that provides a high level of
Solutions arena, with many industry publications currently             flexibility.
debating this topic. However, is there truly a need for a ‘3rd Way’,      However, Income Drawdown does have a downside - client
and do consumers fully understand what is currently on offer in        exposure to risk. In order for the remaining fund to experience
the marketplace?                                                       potential growth, it is necessary for the fund to remain invested in
   At retirement the consumer wants an income. We know that a          the market. For many individuals approaching retirement, this may
large proportion of the population have underestimated their needs     be considered a risk too far.
at retirement and are therefore ill-prepared. This may be the             This uncertainty has paved the way for the introduction of
reason why, when selecting an annuity (the 1st Way), many              Guaranteed Income, or the ‘3rd Way’, which has become hugely
individuals choose a level annuity – providing them with the           popular in the United States and Japan. For those consumers who
highest available income at the outset.                                require flexibility and freedom in their retirement but with the
   Annuities remain the solution that a large proportion of the UK     added bonus of security, Guaranteed Income would appear to be
population use to provide an income in retirement. Annuities have      the ‘Way’ forward.
traditionally offered good value; but in a time of rising inflation       The future of Retirement Solutions surely includes the ‘3rd Way’
that particularly affects those in retirement, an ageing population    as an option; an option to assist you when planning retirement
and the need for retirement income to be more flexible, are            income, an option that offers consumers and advisers the best of
annuities alone still the best solution?                               both worlds, and an option that could ultimately prove to be the
   We then come to Income Drawdown (the 2nd Way). Historically         bedrock of your client retirement portfolios.
considered to be the solution for the wealthier consumer, an              Standard Life are currently developing a guaranteed income
Unsecured Pension enables clients to take a lump sum, increase         option, available via the SL SIPP. More information on this new
and decrease regular income levels (in accordance with GAD             feature will be released later in the year.

Standard Life's SIPP is evolving
  Standard Life’s SIPP is evolving, offering you and your clients      under Government legislation changes.
more options and support than ever before. Here are some of the
enhancements available now, or being added over the coming months:     Retirement Manager
                                                                         The new holistic planning tool from Standard Life, helping
Increased investment choice                                            you to manage your clients' finances both leading up to, and in,
  FundZone, Standard Life’s mutual fund supermarket, is now            retirement.
available through its retail and group SIPP, offering an increase in
investment choice for both advisers and customers while offering       Safer Haven Investment Solutions
an innovative pricing approach. This continues Standard Life’s           A range of less volatile solutions available to both new and
development of its market-leading SIPP proposition, having already     existing customers.
announced that protected rights can be invested from the 1
October in the SIPP.                                                   SIPPZone
                                                                         You can quote, submit new business, track progress, and trade
Benefits include:                                                      funds at the click of a button on SIPPZone:
• Access to over 1,000 funds from Standard Life Investments and
  other leading fund managers at attractive rates
• All funds available at Net Asset Value (no initial charge)           Coming soon - Guaranteed Income Plus
  meaning advisers can agree transparent remuneration levels              There is a new way of taking an income from pension funds
  with their clients                                                   which aims to give the client the best of both worlds from
• Innovative pricing approach with large fund discounts and a          annuities and drawdown. Guaranteed Income Plus is being
  discount on the yearly administration charge based on the            developed as a new feature on the Standard Life SIPP, and will
  combined value of insured funds and mutual funds on FundZone         offer clients more opportunity to invest and take their income,
• Online fund trading to ensure accurate and timely execution          with confidence.
                                                                          Further details on the enhancements to our SIPP can be
Protected Rights                                                       found in the latest edition of Pensions News:
  Your clients will be able to transfer and invest their existing
protected rights pension pots into Standard Life's range of SIPP          If you have any questions or require anything further
products from 1 October 2008 - the first date this will be allowed     please contact your local Account Manager
                                                                        issue 29 autumn 2008                   retirement special - 39

                                                                           Once the investment growth is protected, and the guaranteed
Delivering on                                                            income stepped up, that income can never go down.

a Promise                                                                A clear benefit
                                                                           Some commentators have queried whether these products can
  The UK’s Baby Boomers and their financial advisers are faced           deliver on their promises. Central to this argument is cost and its
with a unique set of retirement challenges - longer life expectancy,     impact on the potential for step-ups.
greater market volatility and rising inflation.                            But a typical Hartford Platinum with GRIP policyholder is
  Since their introduction to the UK, there’s been much debate           charged at approximately 2.5% p.a. and not the 4% that some have
over ‘Living Benefits’ products. Some questioned who these               quoted. We’ve also analysed historical scenarios to examine how
products are suitable for and whether they can deliver on their          many times an investor would benefit from a guaranteed income
promises.                                                                step-up, and can demonstrate a very real benefit.

A growing concern                                                        Dispelling the myths
   Until recently, the only way to guarantee an income in                  We back-tested a number of 10, 15 and 20-year scenarios to
retirement was through an annuity. Whilst this guarantees your           examine how many times an investor would benefit from a
client’s income for life, income may not keep pace with inflation.       guaranteed income step-up. Using a 50/50 equity/bond split we
   Income drawdown doesn’t guarantee your clients income for life,       found that investors could have benefited from a guaranteed
but does provide greater potential to outpace inflation. But,            income step-up, on average, approximately one year out of every
because markets can fall as well as rise, your clients may risk          two.* This is quite an impressive statistic
running out of money.
                                                                         What does the future hold?
Improved choice                                                             ‘Living Benefits’ products are set to radically change the way we
   A key point from the introduction of ‘Living Benefits’ products is    think about retirement planning. As Cazalet Consulting reports:
consumer choice. Annuities should remain popular, due to the                “Unit-linked life funds – with flexible, transparently-priced and
limited size of many pension pots. Equally, income drawdown              relatively low-cost ‘Living Benefits’ attached – could transform
remains attractive to those with very large investments.                 existing product structures and enhance advisers’ financial planning
   However, there’s a large section for whom a pension with a            capabilities in areas such as retirement income planning.” **
‘Living Benefit’ guarantee would provide the flexibility and                To have the opportunity to guarantee a minimum income for life,
security they’re looking for.                                            with the potential to increase this income over time and lock this
                                                                         in to help outpace inflation, is a significant product innovation.
An innovative solution                                                      For more information about Hartford Platinum with the
  These products typically work in the same way as existing              Guaranteed Retirement Income Plan, please contact the Hartford
income drawdown plans, except that clients can add the optional          on 0800 028 6767 or visit
‘Living Benefit’ guarantee.
  With Hartford Platinum and the Guaranteed Retirement Income
Plan (GRIP), a 60-year-old can withdraw a guaranteed income of
5% per year based on their initial fund value.
  At the end of each year, the Hartford calculates whether the           *   Limitations: Step-ups do not stop at age 75; income is a flat 5% and higher or
fund value has increased above its previous highest level. If it has,        lower rates have not been considered; GAD limits and rates and the resetting of
we lock in up to the first 10% of the investment growth to increase          income at GAD review dates have not been considered; although data has been
guaranteed income.                                                           compiled for a number of time series they are not entirely independent due to
  If the investment growth is more than 10%, the fund value will             overlapping time series.
increase by the full amount. It’s just the guaranteed income and
death benefit that lock in up to the first 10%.                          ** Cazalet Consulting. ‘Living Benefits – The Investment Holy Grail’, 2007
 40 - retirement special                    issue 29 autumn 2008

Flexible adviser remuneration                                           Free transfer service
                                                                        AEGON Scottish Equitable’s transfer team will:
from AEGON Scottish                                                     • chase up funds from ceding providers, and any outstanding
Equitable – paying you for                                              • make sure annuities are paid as quickly as possible
                                                                        • with your permission, contact your clients direct to obtain any
the work you do                                                             age or relationship evidence required
                                                                        For more information on AEGON Scottish Equitable annuities,
                                                                        products and services or to get a quote, email them at
Flexible adviser remuneration means you can now be paid for   
annuity business by commission or on a fee basis. You can:
• receive up to 3% of the annuity purchase amount, or
• give up the standard commission rate to increase your client’s        AEGON research reveals the
    annuity and they can pay you a fee
                                                                        changing face of retirement
What does it mean for my clients?
This new flexibility means your clients:                                   AEGON research,* released on 13 August 2008, reveals a
• get the full advice they need                                         significant shift in the way 50 to 65-year-olds are viewing
• could receive higher annuity payments for life, thanks to your        retirement, showing how role models such as Harrison Ford and
   advice                                                               Madonna are turning the ‘baby boomers’ into a generation of
• can pay for the advice they receive in the way they want              ‘grandad-olescents’.

Making annuities simple                                                   • 87% want some form of guaranteed income in retirement
  AEGON Scottish Equitable have plenty of ways to make your               • 61% expect to either carry on working in some capacity after
annuities business quicker and easier too.                                  they reach retirement age or pursue further education or
                                                                            charity work
Online applications                                                       • 42% have no clear idea what income they will have in
   You can already complete a quote with them online – now you              retirement
can turn that quote into an online application and submit it straight     • 22% fear running out of money in retirement
to their annuities team. All you need to do is print a copy, get your
client’s signature and post it to them.                                    AEGON surveyed over 2,000 people between the ages of 50 and
   This gives you the benefits of less admin, greater accuracy within   65 to gauge their attitudes towards retirement and to see what sort
the form and less time spent going over information in meetings.        of financial provision they have in place. The study shows
                                                                        retirement is becoming a second adolescence, and is more likely to
Online tracking                                                         include flexible working or a new career, than a carriage clock and a
  They’re offering you access to a new online tracking system so        pair of slippers.
you can keep a close eye on any business you have with us from             Interestingly, 33% are relying on their pension alone, with no
quote to completion.                                                    other savings or investments. While these figures wouldn’t seem to
You’ll have access to four different types of reports:                  indicate a comfortable retirement, 86% say they would at least “’get
• quotes submitted                                                      by‘ financially if they were to stop working at retirement age with
• applications submitted (including details of any additional           only 14% saying they would struggle to cope financially. This may be
    information we’re waiting for)                                      because 47% of respondents don’t expect to have a mortgage or
• final quotes                                                          other outstanding debts at retirement.
• completed cases                                                       Perhaps understandably in these times of rising prices and
This means you can spend less time chasing information, answer          falling stockmarkets, securing a guaranteed income during
your clients’ questions quickly and manage your own cash flow           retirement is at the top of the wish list, with 87% of
more efficiently.                                                       respondents saying this is most important to them.
                                                                         issue 29 autumn 2008             retirement special - 41

Income in retirement                                                      • A choice over where to invest their pension fund
During these times of rising prices and falling stock markets, it is      • The opportunity to see their guaranteed income rise if
understandable that securing a guaranteed income during                     investment returns are good
retirement is at the top of the wish list. Income for Life offers a
third way for taking an income in retirement, by providing an             Guaranteed solutions
unsecured pension plan with a guaranteed income. The fund can                Income for Life is just part of AEGON’s range of innovative
rise with the stockmarket but the level of income doesn’t fall. And       guaranteed solutions, to find out more, visit
the story doesn’t end there. Even if the value of a pension fund falls You can also watch our video webcast
to zero, we’ll still guarantee an income for life.                        of Rachel Vahey, Head of Pensions Development, talking about why
                                                                          guarantees are so important in the current climate.
What can Income for Life offer your clients?                                 Alternatively, contact your local AEGON Scottish Equitable
• A guaranteed income for life                                            consultant or phone access on 0845 61 000 61.
• The opportunity to leave an inheritance from their pension fund
  when they die                                                             *To get details of the full report, visit

A toast to income withdrawal
Your clients can avoid getting their fingers burnt by the                 where there is no requirement to take any income. Additionally,
inflexible annuities market through focusing on pension                   on death, family members could benefit from the remaining pension
income withdrawal.                                                        fund (less tax).
   In the current market, annuities are on the slippery slope to
becoming less popular. Recent years have seen a decline in the            Measured risks
acceptance of the requirement to buy an annuity with pension                 Retaining control over investment strategy and risk management
funds, dropping from 57% in 2001 to 30% in 2007*.                         is a key element of income withdrawal. Overall performance is
   This trend shows a growing demand for flexibility, and there           affected by the amount of income and frequency with which it is
are a number of products designed to meet this. However, the              taken, but the principal risk of income withdrawal is that the fund’s
value of existing income withdrawal schemes should continue               total value will fluctuate depending on the value of the client’s
to be considered.                                                         investments.
   With a wide range of options, advisers need to pick and choose
the best fit for their clients. Critical to the advice and decision-         There is the potential for gains, but also for losses and your client
making process is the client’s retirement plan. A final retirement        will need to accept some level of investment risk. It is vital that the
strategy should do more than just look at pension wrappers; other         investment is closely monitored over time to ensure it continues to
assets such as ISAs should be considered, along with possible tax         meet the investor’s requirements. Once in withdrawal, the client’s
benefits.                                                                 attitude to risk may change with the performance of their funds.
                                                                             Risk-matched funds can also be a way to manage a client’s
Accumulation and decumulation                                             investment. Portfolio construction is increasingly focusing on
   A pension has two broad phases in its lifecycle, accumulation and      understanding a client’s attitude to investment risk. Advisers need
decumulation. During the accumulation phase, clients and advisers         to know how much of a loss their clients can tolerate and ensure
need to regularly consider the retirement strategy of the client.         this is reflected in asset allocation.
Factors such as residency, taxation and whether to continue funding
a pension should be continuously examined in order to ensure tax            Income withdrawal is not necessarily going to be appropriate for
optimisation.                                                             everyone, but it is important to consider as an option so clients
                                                                          don’t miss out. As part of the flexibility and control offered by
   The decumulation phase is the time to start enjoying the rewards       income withdrawal, it is possible to take the pension commencement
of all that effort. In the past that meant compulsory purchase of an      lump sum and no income. This may be useful for those clients who
annuity, providing a guaranteed annual income for the rest of the         have other sources of income and either wish to manage their
person’s life. Clients who decide not to purchase an annuity need to      income tax liability or only require the lump sum payment.
allocate assets accordingly, taking into account how they will
decumulate and over what time frame.                                        This doesn’t mean that annuities will disappear entirely. It is all
                                                                          about client choice, suitability and meeting the client’s needs; with
   Income withdrawal allows the pension fund to remain invested           so many options available there is a clear opportunity for advisers to
and income to be withdrawn from it. Unlike an annuity the investor        add value. The ‘at retirement’ market continues to become even
can retain control over the investment, tailoring it to suit their        more sophisticated and complex, and Skandia believes it has quickly
circumstances and requirements.                                           become a highly specialist area. The need for permissions,
                                                                          qualifications, or alternatively, the potential to outsource advice to a
  Income withdrawal offers flexibility and choice – income can be         specialist will become increasingly critical. Decisions made at
varied monthly and an annuity can still be purchased at any time, if      retirement can have a dramatic effect on financial security in later
so desired. Furthermore, tremendous flexibility exists regarding the      years, so the need for advice is paramount.
level of income that can be selected, particularly prior to age 75,       *Retirement Planning Monitor 2007, Marketing Sciences ltd.
 42 - retirement special                        issue 29 autumn 2008

                           Assuming too                                  Cash equivalent
                                                                           Trustees can adjust the initial cash equivalent value to take into
                           much?                                         account options which would reduce it (e.g. commutation).
                                                                         Adjustments must consider the proportion of members likely to
                           Updating you on the basis of                  exercise such options. For final salary schemes, the initial cash
                           calculation of transfer values from           equivalent must be calculated on the guarantee date. Currently in
                           final salary pension schemes.                 certain circumstances, trustees can extend the period for providing
                                                                         the cash equivalent to three months. From October this will be
   A ‘scheme-specific’ approach is to be adopted for the calculation     extended to six months.
of transfer values from final salary schemes. The new approach,
which will apply from 1 October 2008, is based on the expected cost         For members of defined contribution schemes who leave after at
of providing the member’s accrued rights, had they remained in the       least three months, with less than two years’ pensionable service,
final salary scheme. Trustees will determine the calculation             regulations currently require cash transfer sums to be calculated
assumptions on a ‘best estimate’ basis. They will be responsible for     when the member retires. The initial cash equivalent can now be
calculating and verifying transfer values and could pay a higher cash    adjusted to allow for investment performance from termination of
equivalent than the minimum (with employer consent).                     pensionable service to the date of transfer.

   The regulations do not define the term ‘best estimate’, with          Summary
trustees and advisers left to determine what is suitable to the             Transfer values should remain broadly as they would have been
circumstances of the scheme. For example, in choosing a discount         under an unamended GN11. However, a wider range of transfer
rate a scheme should take account of the membership investment           values may be quoted by salary-related schemes, depending on the
strategy. Therefore if a scheme will back the payments of members’       variation in assumptions used by trustees. At this early stage, it is
pensions by investment in gilts or bonds, that should be reflected       difficult to judge the impact on the transfer market.
in the post-retirement discount rates.

Cash interest rates on SIPPs
Ian Naismith, Head of Pensions Market Development, Scottish Widows

                              One side-effect of the information         Typically, positive cash balances in SIPPs will attract interest of
                           revolution in the UK is that we have          about 1% below bank base rate, although in some cases the interest
                           become a nation of switchers. It is now       added is considerably lower than this. However, by shopping
                           very easy to compare different providers      around it is possible to obtain interest as high as base rate on
                           of services ranging from utilities to         positive cash balances.
                           mortgages to internet access and to move         This can be significant. With a SIPP fund of £500,000 of which
                           our custom if we believe we can get a         10% is held in cash, a 1% change to the interest rate can make a
                           better deal elsewhere. For many (though       difference of £500 a year, which either increases the investor’s fund
                           by no means all) of the population finding                                                   .
                                                                         or adds to the effective charges for the SIPP This could be more
                           a better rate has become more important       than the total of other charges that are explicitly disclosed.
                           than customer loyalty or service quality.        However, any money held in our Retirement Account’s unique
                                                                         control account will receive a positive balance adjustment
   This switching mentality has, of course, extended to bank             equivalent to the Bank of England base rate. That means that right
accounts as well. Many people gain significantly better interest rates   now your client will receive 5%.
by moving, often to online banking facilities. Most of us have little       But don’t just take our word for it. Our decision to pay base rate
or no personal relationship with our bank manager these days, so it      on any cash holding in our Retirement Account was highlighted in
makes sense to maximise the interest we can earn.                        the July 2008 issue of Investment Life & Pensions Moneyfacts, as
                                                                         comparing favourably across each of the investment levels.
   Surprisingly, the search for the best available interest rate often
appears a lower priority for those investing in self-invested personal      The FSA expects SIPP operators to consider whether prospective
pensions, where the rates available on funds left in cash can vary       members are likely to be interested in the level of charges on
considerably. There will frequently be large amounts held on             interest-bearing accounts, and if so would expect them to be
deposit waiting for more active investment, but it is not uncommon       transparent. It is difficult to see how investors could fail to be
for as much as 10% of the total to be held in cash long-term.            interested if they are concerned about cost, and so it is important
This percentage can increase substantially during income drawdown        that the treatment of cash balanced is appropriately highlighted by
(unsecured pension) when it is common practice to hold income for        providers and advisers. It may not be the main factor in choosing
the following year, or even two years, in cash to guard against the      one product above another, but it should certainly be an important
risk of a market crash.                                                  consideration.
                                                                          issue 29 autumn 2008            retirement special - 43

    Wha t 2010 means
    to your clients
From 6 April 2010, the minimum age at which pension                        Maximising the opportunity
scheme members will be able access their pension                           • Identify those clients born between 6 April 1955 and
benefits will jump from 50 to 55.                                            5 April 1960.
                                                                           • Next review the finances and personal circumstances of this
   This raises significant planning issues for those clients currently       group to find out whether any of them will need to access their
between the ages of 48 and 53, as this group will have the option to         pension in the near future.
access their pensions restricted if they don’t act before 6 April 2010.    • And finally ensure that they are in a pension vehicle that allows
   Of course not everyone in this group will need to access their            them to receive the benefits required – this may require them
pension immediately and some may be able to defer taking benefits            to transfer to a new pension plan before 6 April 2010.
for up to 5 years. But what about those clients who do have a
genuine short-term need to access their pension, whether for a
lump sum or a regular income? How will they feel if they find out          Find out more about Income Release:
they could have accessed their pension benefits if only they’d acted         If you'd like more information about Income Release and how it
before 6 April 2010?                                                       can help your clients plan for their retirement, please contact your
                                                                           usual Scottish Life representative or call us on:
Scottish Life's solution - Income Release
   Income Release is a fully integrated drawdown facility available
through our Pension Portfolio product (personal pension/SIPP) that
allows your clients to access their pension benefits at a time and in
                                                                           0845 60 40 800
                                                                           or go to our website
a way that suits them from age 50 onwards.

Features of Income Release include:
• Available on plans worth £20,000 (excluding any self-invested
    assets) plus
• Base AMC from just 0.7%, which is reduced by a rebate of
    0.25% on funds above £21,600.
• Wide range of investments – both insured funds and self
• Pension Commencement Lump Sum (PCLS) and income from
    both Non-Protected Rights and Protected Rights funds.
• PCLS and income usually paid within 5 working days.
• Up to 7.5% up-front commission on transfers plus 1% FBRC
    based on total fund.
• PCLS, income and commission paid on completion of each
    transfer payment.

To top