Annex A. (Data request for firms providing financial advice results)

Transcription

1 Annex A (Data request for firms providing financial advice results) Purpose of this data request As part of our general supervision activities we are conducting a piece of work to better understand the scope of services provided by retail financial advisers. The information provided will supplement the existing data we collect on ongoing services through the Retail Mediation Activities Return (RMAR). The questionnaire covers information under three main themes: Charges associated with services Description of services Delivery of services Instructions on how to complete the online questionnaire The answers to your questions will be saved automatically every time you navigate to a new page. If you wish to exit the survey and complete it at a later date the answers you have entered will also be saved. The link to the online questionnaire can be shared with colleagues within your firm, and multiple colleagues can fill it out, though only one person at a time can use the online questionnaire. Your answers may be d at any time before submission. At the end of the survey you will have the opportunity to review your answers and print in PDF format. To submit your response, please press the Submit button at the end of the questionnaire. Please ensure you have reviewed your responses before clicking Submit.

2 Note on content Some questions ask for data on your firm s activities this information needs to be extracted from your firm s records or systems. In questions asking for numbers, please provide round numbers only. In all questions asking for monetary values, please provide them rounded to the nearest with no pence. When asked for values in percentage terms, please use integer numbers to indicate percentage points i.e. when the value you want is 5%, enter 5 rather than 0.05, for 0.05%, enter 0.05.

3 For ease of reference, the text relating to the questions posed and the results obtained have been colour-coded as follows: the text of the original questions is shown in black, the data relating to the firms submissions are in red Although 40 firms provided a submission, the number that answered each question varied. We have provided the number of firms that responded to each question in blue brackets, except where the number of firms that responded is already noted against the options available. The aggregated responses for each question are noted except for questions 8, 9, 11 and 12. Please see the notes at each of these questions for the basis of these results. Section 1: About your firm 1. Please confirm the name of the firm and Firm Reference Number (FRN) to which your responses relate to. Not to protect identity of firms. 2. Please confirm the number of retail investment clients who paid an adviser charge during the year ending 31 March (40) Independent Restricted 51424

4 Section 2: On-going services charges information 3. Please provide details of the advisory services provided by your firm during the year ending 31 March Please provide information below for the three most popular service levels e.g. if you provide four different service packages based on the frequency of reviews please provide the three service levels provided to the most clients. Service Service name Numbers of clients who paid for this service Total value of assets under advice for these clients ( ) Charging structure applied to the highest number of clients Number of clients on this charge structure for each service Level 1 Not to protect identity (39) 9,856,887, fixed fixed (39) of firms (39) monetary 35 - fixed percentage 0 - tiered 2 - banded 0 - hourly 1 - other monetary fixed percentage 0 - tiered banded 0 - hourly 45 - other Level 2 Not to protect identity 5827 (30) 1,084,240, monetary fixed (30) of firms (30) 24 - fixed percentage 0 - tiered 0 - banded 2 - hourly 3 - other monetary fixed percentage 0 - tiered 0 - banded 26 - hourly other Level 3 Not to protect identity 843 (18) 509,262,893 (18) 3 - fixed 44 - fixed (18)

5 of firms monetary 11 - fixed percentage 1 - tiered 1 - banded 1 - hourly 1 - other monetary fixed percentage 9 - tiered 44 - banded 4 - hourly 6 - other *Tiered one percentage rate applied to all of client assets depending on the total value of the portfolio **Banded different percentage rates applied to each band of client s portfolio For example: Client has 200,000 of assets. Charge rates Value Rate Less than 50, % 50, 000 to 99, % 100,000 to 249, % On a tiered basis client would pay - 0.5%= 1000 On a banded basis client would pay - 1.5%= 750, 1.0%= 500 and 0.5%= 500 Total = 1,750 (an overall rate of 0.875%) 4. Please provide details of the revenue received by your firm for each service level, as named in Question 3, for the year ending 31 March Service Total revenue received for each service level Level 1 41,207,117 (39)

6 Level 2 6,431,298 (30) Level 3 3,064,669 (18) 5. Please provide the standard adviser charge for each service level at the noted value of client assets. Service Value of client s assets For each stated value of client s assets please provide the standard adviser charge payable annually in monetary terms for each service e.g. if your charge is 1% please enter 500 against the 50,000 value. charge d in the last 2 Level 1 50, (35) 6 - Increased 1 - Decreased 32 - no 100, (34) 5 - Increased 1 - Decreased 33 - no 500, (35) 5 - Increased 1 - Decreased 33 - no Level 2 50, (27) 4 - Increased 0 - Decreased 28 - no 100, (28) 4 - Increased 0 - Decreased 28 - no 500, (27) 4 - Increased 0 - Decreased 27 - no Level 3 50, (18) 2 - Increased 0 - Decreased 21 - no

7 100, (17) 2 - Increased 0 - Decreased 21 - no 500, (22) 2 - Increased 0 - Decreased 21 - no Section 3: On-going services services provided 6. Please indicate which services are in the advisory services charge and those available at an additional cost. Please also confirm if services in the charge have d in years. Service level Level 1 Level 2 Level 3 Service Update of fact-find and attitude to risk following interaction with client (e.g. face-to-face meeting, phone call, ) 00 - quart 05 - six mth 28 - annual 01 - every 03 - other d in 39 - no 00 - quart 05 - six mth 21 - annual 03 - every 01 - other d in 03 - quart 05 - six mth 06 - annual 01 - every 00 - other d in If not at any of the service levels, is it available at additional cost? 10 yes 02 no

8 Review of product/fund suitability following interaction with client (e.g. face-toface meeting, phone call, ) Review of product suitability without interaction with client Rebalancing of existing investments on an advised/nonadvised basis (i.e. not a discretionary investment management service) 02 - not 01 - quart 04 - six mth 28 - annual 01 - every 02 - other 03 - not 02 monthly 01 - quart 02 - six mth 11 - annual 02 - other 21 - not 01 - quart 04 - six mth 22 - annual 01 - every 03 - other 39 - no 39 - no 39 - no 01 - not 00 - quart 06 - six mth 19 - annual 03 - every 01 - other 02 - not 01 monthly 01 - quart 01 - six mth 11 - annual 01 - every 01 - other 14 - not 00 - quart 04 - six mth 15 - annual 02 - every 03 - other 05 - not 02 - quart 06 - six mth 06 - annual 00 - other 06 - not 00 - quart 04 - six mth 04 - annual 01 - other 11 - not 02 - quart 05 - six mth 04 - annual 01 - other 09 yes 02 no 07 yes 09 no 13 yes 02 no

9 Providing performance updates/ market updates/newsletters to clients that are produced by your own firm (i.e. not produced by product/fund/platfo rm/discretionary investment management providers) Review of third party service providers used by client e.g. platform, discretionary investment managers, other consultants 08 - not 01 monthly 06 - quart 05 - six mth 15 - annual 03 - other 09 - not 01 - quart 04 - six mth 24 - annual 02 - other 09 - not 39 - no 40 - no 07 - not 03 - quart 08 - six mth 09 - annual 01 - every 03 - other 07 - not 02 - quart 03 - six mth 13 - annual 01 - every 02 - other 10 - not 08 - not 05 - quart 06 - six mth 02 - annual 02 - other 05 - not 04 - quart 00 - six mth 05 - annual 02 - other 09 - not 07 yes 07 no 11 yes 03 no Service level Level 1 Level 2 Level 3 Service d in d in d in If not at any of the service

10 Provision of inhouse discretionary investment management service 03 yes 35 no 37 - no 02 yes 28 no 30 - no 02 yes 17 no 19 - no levels, is it available at additional cost? 02 yes 23 no Advice to the client to add new money to an existing investment (e.g. top-up to existing pension/isa) 25 yes 14 no 38 - no 19 yes 12 no 11 yes 09 no 16 yes 02 no Advice to the client to switch an existing investment (e.g. selling out of one product/fund and investing in an alternative) Arranging implementation of new money/switches i.e. submitting the business Review of client cash flow forecast 31 yes 08 no 23 yes 16 no 20 yes 19 no 38 - no 38 - no 02 - added 36 - no 22 yes 09 no 16 yes 15 no 13 yes 18 no 01 - removed 30 - no 01 - added 30 - no 12 yes 08 no 10 yes 10 no 11 yes 09 no 01 - added 19 - no 10 yes 03 no 16 yes 03 no 10 yes 07 no

11 Client access to adviser at any time with queries Client access to paraplanner/other staff at any time with queries 37 yes 0 no 30 yes 09 no 28 yes 20 yes 03 no 00 no 38 - no 38 - no 24 yes 07 no 01 - removed 30 - no 17 yes 03 no 03 yes 02 no 02 yes 05 no Service level Level 1 Level 2 Level 3 Service Provision of report/letter to client to confirm outcome of the review 22 in all instances 02 - for all buy recommendat ions only 10 - for all buy and sell recommendat ions only 04 - ad hoc 01 - not provided d in 01 - added 37 - no 20 in all instances 01 - for all buy recommendat ions only 05 - for all buy and sell recommendat ions only 03 - ad hoc 02 - not provided d in 01 - added 30 - no 08 in all instances 01 - for all buy recommendat ions only 05 - for all buy and sell recommendat ions only 02 - ad hoc 04 - not provided d in If not at any of the service levels, is it available at additional cost? 07 yes 02 no

12 7. Please provide details of any other services within the service charge not captured above. Not as comments were varied and specific to each firm. 8. Please provide the approximate breakdown of clients and value of assets in each of the following investment solutions. For the Percentage of clients we have provided the number of firms that had noted their highest percentage of clients in each investment solution. The Total value of assets is the total of all the assets noted under each solution, not just the value of assets related to the highest percentage of clients for each firm. Investment solution Percentage of clients Single fund e.g. multi-asset fund 7 firms noted the highest percentage of their clients in this solution (27) Non-discretionary portfolio 28 firms noted the (including model portfolios) highest percentage of their clients in this solution (37) Discretionary investment services 5 firms noted the highest percentage Total value of assets ( ) 1,817,643, (27) 3,050,659, (37) 1,763,530, (22)

13 of their clients in this solution (22) 9. Is there any difference in your charge where your clients receive a discretionary investment management service (in-house or by 3rd party)? *These are all the individual responses to these questions. Adviser charge Number of clients Most frequent applied to the adviser charge (%) Increased 0 0 No 2502 (17) 0.25,0.50,1.00* Decreased 148 (3) 0.35,0.50,-0.25,0.5* Section 4: On-going services - delivery 10.For each service level please provide the following details on the delivery of services. For reviews/rebalancing intended to occur more frequently than annually, please count each incident that did not occur. Service Number of scheduled client reviews that did not take place during the year ending 31 March Please include instances where the client declined to attend or did not respond to the offer. Number of advised/non-advised rebalancing exercises that did not take place (or not completed correctly) at the intended time during the year ending 31 March Please exclude any instances where a rebalance was scheduled but was not required as the asset allocation was not out of line. Level (27) 338 (8) Level (18) 127 (6)

14 Level 3 37 (4) 19 (2) 11.Please provide an overview of the top 3 reasons why intended reviews did not take place and the number of missed events for each reason. In this instance, the numbers of events have not been recorded as the totals for each of the top three reasons as entered by the responders. All reasons provided were grouped into 3 categories and the numbers provided relate to these categories. (30) firms provided a response to this question. Reason for reviews not taking place Number of events Responses summarised as client declines 1994 Responses summarised as reason unclear 228 Responses summarised as firm/adviser reason Please provide the top 3 reasons why intended rebalancing did not take place (or complete correctly) and the number of events applicable to each reason. Please exclude any instances where a rebalance was scheduled but was not required as the asset allocation was not out of line. In this instance, the numbers of events have not been recorded as the totals for each of the top three reasons as entered by the responders. All reasons provided were grouped into 3 categories and the numbers provided relate to these categories. (10) firms responded to this question. Reason for rebalancing not taking place or completing correctly Number of events Responses summarised as reason unclear 282 Responses summarised as client declines 103

15 Responses summarised as firm/adviser reason Please provide the following details for each service during the year ending 31 March Service Number of complaints received related to services Number of clients who cancelled their service/charge Number of clients who had their ongoing service/charge terminated by you Number of clients who switched from this service to another Level 1 35 (5) 2948 (19) 627 (8) 30 (5) 27 (6) Level (5) 1 (1) 11 (3) 4 (1) Level 3 2 (1) 3 (2) 1 (1) 7 (1) 3 (2) Number of clients who received a refund on ongoing service charges 14.How frequently are the following re-disclosed to the client in a written format (excluding in relation to any new business conducted): Description of your services provided to the client Rate of the service charge 00 - more than once per annum 19 - once per annum 01 - less than once per annum 13 - only when there is a 06 - only when new business is conducted 01 - don t re-disclose 00 - more than once per annum 22 - once per annum 02 - less than once per annum 08 - only when there is a 07 - only when new business is

16 Monetary cost of the service charge conducted 01 - don t re-disclose 03 - more than once per annum 18 - once per annum 02 - less than once per annum 05 - only when there is a 11 - only when new business is conducted 01 - don t re-disclose Section 5: Additional information 15.Please describe any additional costs, not captured above that your service clients may incur, apart from discretionary, product or platform charges. Not as comments were varied and specific to each firm.