APTA

Question 1

Process of APTA

Answer 1

Must be carried out before a personal recommendation is made.
Can incorporate both behavioural and non-financial analysis.
Can include Critical yield if a firm thinks this is a valid approach.
Includes new requirements to consider…
Impact on a clients tax position and access to state benefits.
A reasonable period beyond life expectancy.
Trade offs in a broader sense.

Question 2

FCA requirements for APTA

Answer 2

Rates of return used must reflect the investment mix of the transferred funds.
Use the assumptions set out in COBS to illustrate the income likely to be paid from ceding scheme at the point of retirement.
Take into account the impact the proposed transfer will have on the clients tax position. - Death in 2 years IHT.
Take into account the impact the proposed transfer will have on the clients access to state benefits.
Compare income from scheme to desired income.
Plan of a life expectancy beyond the average.
Consider how the ceding scheme and proposed scheme would meet the clients income needs.
Consider how the ceding scheme and proposed scheme would meet the clients death benefits needs.
Should consider the trade offs that may occur when prioritising client objective.
Must take account of all charges, inc charges that will occur regardless if the transfer proceeds.
Must include a transfer value comparator.