Chris Rayburn Flashcards
Recommendation not to Proceed with DB Transfer
What are Suitability Report Requirements in FCA COBS?
Suitable Advice
In Writing
Advantages and Disadvantages of recommendation
Any Material Information
Analysis of Financial Implications
Take reasonable steps to ensure Client understands the comparison and how it contributes to the personal recommendation
Recommendation not to Proceed with DB Transfer
Outline 3 Key Steps FCA expects when advising an insistent Client
Always provide suitable advice following normal advice process
Risks and Implications of alternative action should be reconfirmed
Clear statement that they are acting against advice
APTA - Client
Impact on Clients Tax Position
Impact on any means tested benefits
Impact assuming longer life expectancy than average
APTA
Ceding and Receiving Scheme
Compare pattern of benefits taken under each
Compare how both can meet Client’s income needs
Compare how both can provide required death benefits
APTA - Adviser
Trade off when prioritising Client needs
Rate of return based on asset mix recommended for transfered funds
All charges, including those that will occur whether or not transfer takes place
APTA - FCA
Use assumption in COBs when illustrating income likely to be paid from ceding scheme at the point of retirement
Include a TVC
Factfinding -
What information required from Scheme?
Type of contract
Date Pensionable Service Started
Date Pensionable Service Ended
Accrual Rate
Final Salary
Revaluation in deferment rates
Escalation in payment rates
Any protected tax free cash
Rate of Guaranteed Annuity
Terms of Guaranteed Annuity
Any transfer Penalties
Availability of Flexibility Options
Charges
Where Funds are Invested
Plan Death Benefits
Full or Part years for revaluation
Outline the conditions that must be met in order for a member of a defined benefit scheme to have a statutory right to transfer their safeguarded benefits.
Have not made a request within the last 12 months
Must have ceased accrual / be a deferred member.
Make a formal application to transfer after receiving their statement of entitlement.
The request must be made at least one year before the scheme’s normal pension age.
They must transfer all safeguarded benefits within the scheme unless the receiving scheme is unable to accept GMP benefits
What are Flexible Benefits
Money Purchase Benefits
Cash Balance Benefits
Third type benefits
What are Safeguarded benefits
Any benefits that are not :
Money Purchase Benefits
Cash Balance Benefits
What evidence of advice is required
Evidence must be in writing
From Adviser to Member
Specific to transaction
Required Authorisations
Firm’s FCA Reference number
Name of Member and Scheme
Timeline
Member applies for Statement of Entitlement
Trustee informs member of need to seek Financial Advice - within 1 month
Trustees set Guarantee date - within 3 months of request for SOE
Trustees provide SOE within 10 days of Guarantee date
Member to apply for transfer in writing - within 3 months of Guarantee date
Member to provide proof of Independent Advice - within 3 months and 10 days of Guarantee date
Trustees make transfer - within 6 months of Guarantee date - having checked that member has received independent advice
What is the Timeline for Client : Statutory Transfer Process
Client Applies for SOE
Client must apply for Transfer to proceed - in writing - within 3 months of Guarantee date
Within 10 days of submitting Application form Client must provide evidence of independent advice received
What is timeline for Trustees : Statutory Transfer Process
Within 1 month of Client application Trustees must inform Client of need to seek Financial Advice
Trustees must provide Guarantee Date within 3 months of Client application
Within 10 days of Guarantee date Trustees must provide Client with SOE and inform him of deadline for receiving confirmation of advice given
Within 6 months of Guarantee date check advice had been given, verify status of adviser and receiving scheme & execute the transfer to a registered pension scheme
Nomination Form
Not Binding - purely guidance for Trustees
Trustees must investigate
If not nominated the only option on death is a Lump Sum — No access to regular income / Flexibll Benefits
One Solution would be to nominate each child at 1% each
