Financial Advice Processes – Fact-finding

Question 1

State the additional information that a financial adviser would require to allow them to advise Joshua and Amina on their financial situation. (31 Points)

Answer 1

Current expenditure/childcare costs/surplus income/are they claiming tax-free childcare/willingness, ability to economise.
* What age they expect the children to be dependent for/desire to financially assist them.
* Any further children planned.
* Intended retirement date/expected income and capital needs in retirement.
* Views on inflation.
* Any inheritances/capital sums expected?
* Priority of objectives.
* State pension entitlement/BR19s.
* Any scope for further matched contributions for Amina.
* Details of their pension schemes/normal retirement date and target date on fund/asset allocation/charges/fund choice.
* Willingness to make further pension contributions/tie up funds long-term.
* Pension death benefit nominations.
* How are current pensions contributions for Joshua structured – employee/employer split?
* Required/desired emergency fund.
* Are they making regular savings into ISAs?/have they used their allowance?
* Interest rate/access terms on the cash holdings.
* CFL.
* Asset allocation/performance/charges on the funds.
* Platform/how are funds held?
* Views on ESG investing?/has Amina considered ethical banking?
* Any surplus funds within the company?
* Views on Joshua’s decision with regards to the company.
* Does he have plans to expand his business in the future?
* Why is he drawing only £65,000 from the £90,000 turnover/what is the annual profit?
* Why has he structured his earnings in this way?/has he ever received advice on this issue?
* Views on taking on someone to help with administration?
* Is the mortgage protection policy payable on first or second death?
* Term/monthly repayment on the mortgage.
* Amina’s sick pay entitlement/any other employer benefits.
* Premium on mortgage protection policy.

Question 2

State the additional information that Joshua and Amina’s financial adviser would require to advise on their objective to improve their existing protection arrangements. (18 points)

Answer 2

• Affordability of contributions/regular expenditure.
• Smoker status/family health/medical history.
• Any other debts/plans to move to bigger property/capital expenditure needs.
• Does Amina intend to remain with her employer?/Amina’s sick pay entitlement.
• Any inheritances expected.
• Value of Joshua’s business/surplus cash holdings.
• Priority of protection needs.
• Assistance available from family/childcare costs/are they claiming tax-free childcare?
• Term of mortgage/plans to move.
• Views on inflation/increasing cover.
• For income protection would they prefer own/any occupation definition.
• Requirement for waiver of premium.
• Intended retirement age.
• Pension death benefits available/nominations.
• Premium for current decreasing term assurance.
• State benefit entitlement/NICs history.
• Expected dependency of children.
• Any further children planned.

Question 3

State the additional information that Joshua and Amina’s financial adviser would need to obtain in relation to their pension arrangements to enable them to advise on their objective to improve their retirement savings provision. (15 points)

Answer 3

• Details of the provider/financial strength.
• Trust/master trust/contract based.
• Level of matched contributions available for Amina.
• Vesting options.
• Death benefit options before/during retirement/nominations.
• Target date on Joshua’s plan.
• State pension entitlement/BR19.
• Charges/held on platform.
• Performance.
• Fund choices available.
• Can salary sacrifice be used for Amina’s bonus?
• Asset allocation/geographical/sector weighting for Joshua’s fund.
• Projected entitlement.
• Contribution history.
• Nomination forms completed?