And just for fun
posted Thursday, 29 October 2009
We had to smile when researching exactly what defined an "unregulated collective investment scheme". Thinking we'd go straight to the source of all wisdom on this, the FSA handbook glossary, we established - wait for it - that it's "a collective investment scheme which is not a regulated collective investment scheme". Ever helpful!!
Retail Distribution Review (RDR)
There's been a fair amount written about the RDR over the last few months but probably one of the more helpful documents was published by the Prudential. It helps set out the scope of the RDR and sets out some of the key implications for firms to consider including the advice process and fees & commissions.
You can get a copy form Pru's website (or let us know and we'll e-mail you one), if you haven't as yet spent much time considering the impact that these proposals will have, you could do a lot worse than starting by looking through it.
Complaint data published by Financial Ombudsman Service.
We thought this made interesting reading. For the first time FOS has published figures relating to individual named firms. The figures cover the period from 1st January to 30th June 2009 - it received 69,841 complaints about 142 firms (out of over 100,000 firms covered by the scheme). FOS upheld 61% of banking related complaints, 41% of mortgage related complaints, 70% of general insurance and 42% of investment related complaints.
Some predict it may focus those firms minds on the reputational risk - the figures make it apparent how these firms, responsible for some 90% of FOS' workload, deal with complaints. Apparently FOS has already privately been providing figures as feedback to the firms concerned, but this has had (perhaps unsurprisingly) no real effect. FOS hopes that making the information public may provide a little further encouragement - lets hope so!
Pensions Update
Many clients may be unaware of changes to the minimum age at which they are able to take their benefits. Currently the minimum age at which they can take benefits is 50; however, this will change to 55 with effect from April 6th 2010. This may affect the retirement plans of anyone who is currently aged between 50 and 54, so it may be worth contacting those clients who fall within this age bracket to ensure they are aware of those changes if you think there is any chance they may wish to take benefits. Remember this will include any clients contemplating unlocking tax free cash, as well as any thinking of retirement proper. Don't however think we're suggesting writing to clients en masse and suggesting a "fire sale" scenario to encourage them to "unlock" their tax free cash before the opportunity is postponed - too many firms have been substantially fined for doing just that!You may receive queries from clients currently in phased drawdown who would like to know the position regards taking additional funds from their uncrystallised elements. AMPS (Association of Member-Directed Pension Schemes) have confirmed with HMRC that a customer will, in these circumstances, now have to wait until the age of 55 to be able to take further designations.
Revised ISA Limits
With effect from Tuesday 6th October, ISA limits increased to £10,200, of which up to £5,100 can be saved in cash with a cash ISA provider. This increase applies to all investors who are already aged 50 or over, or will turn 50 between October 6th 2009 and April 5th 2010.
You should also be aware that from April 6th 2010, all ISA investors aged over 18 will benefit from the increased ISA allowance.
Solicitors told not to refer clients to tied advisers.
Guidance recently issued by the Solicitors Regulation Authority says that clients who need investment advice should only be referred to independent financial advisers, not tied or multi-tied advisers.
The new ruling clarifies the Solicitors' Code of Conduct 2007, which states clients must only be referred to "independent intermediaries" for investment advice. The term "independent intermediaries" was left undefined, but the SRA has now declared it to be the same as the Financial Services Authority's term "independent financial adviser" i.e.an adviser who can advise on investments from across the whole of the market, and who offers the option of working for a fee paid by the investor rather than taking a commission from a financial product provider. Clients who specifically ask their solicitor to refer them to a tied or multi-tied adviser should be told that the solicitor is not allowed to do so, says the SRA. The new guidance is not mandatory, but the SRA may use it in disciplinary proceedings. Practitioners who do not follow it might have to show they complied with the rules by some other method.
The clarification was issued because some aggressive financial institutions are said to have been promoting themselves as eligible to receive referrals from solicitors
