Migrating your clients to our new product administration system

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1 This document is for investment professionals only and should not be relied upon by private investors. Migrating your clients to our new product administration system Account Information report

2 Migrating your clients accounts to our new product administration system Since October we have been moving your clients eligible accounts to our new product administration system. In this short guide, we will cover: Understanding when your clients accounts will be migrated The migration process Migration eligibility The impact to your clients and how we will communicate with them Additional important information The migration process The first phase of the process will include most ISAs, Junior ISAs and Investment Accounts. The following accounts will move at a later date and we will communicate with you separately about these arrangements: FundsNetwork Pension accounts Company and Pension Trustee accounts (non-individual accounts) Investment Accounts for private individuals with trusts Non-UK residents accounts Accounts with in flight corporate actions Accounts in the name of a deceased client will not be migrated until the assets are passed to a new beneficiary. The migration process will usually take place over a weekend and dealing will be restricted at this time. We will endeavour to move as many of your clients eligible accounts as possible, but when we cannot, we will try to move them as quickly as we can. How will I know when my clients accounts are migrating? We will notify you by and also by way of the post-login welcome page once we have started migrating your clients accounts. It is important to remember that for a period you may have clients on both the old and the new systems. You can use our Account Information report to keep track of the migration progress of your clients. If you have any saved quotes in the latest version of client management, we will migrate the quote at the same time as the account to which it relates. You may be required to make minor updates to the quote at the time of submission, for example where the quote contained ISA cash park. For accounts that have been migrated successfully you will be able to transact using our new functionality at that point. If your client has any pending instructions on their account at the time of migration, then that account cannot be migrated until the next available migration point. In-flight transactions include: pending re-registrations or cash transfers unsettled or unpriced deals monthly savings plan or withdrawal plans for which the process has already started Please note: for clients who have regular instructions, these may need to be migrated on a later weekend due to collection dates and settlement times.

3 Which of my clients are eligible for migration? In order for you to understand which clients accounts will be included in the first phase of migration, we have a new report which is available, weekly on Tuesdays, through our normal Reporting services area of our website. You don t have to request this report as we have made this available to you automatically. The Account Information report is designed to support you before, during and after the movement of clients accounts. It will help you to: Identify the clients that will be migrated Understand what communication they will receive from us Prepare for any changes that are being made to clients accounts See which clients accounts have been migrated and the ones that are still pending Identify where there has been a change to an account number so you can update your records. Ineligible assets We cannot migrate Fidelity fund holdings in an Investment Account where a client has not provided consent or non-gbp denominated holdings. Any accounts in either or both of these categories will be split out towards the end of the year. The ineligible assets will be moved into a new account which will remain on our existing system. No new assets will be allowed into the account, and assets can only be sold over the phone. Switching will be limited to the minimum legal requirement as set out in the fund prospectus. We will write to your impacted clients a month before their account is split and again after the split to confirm new account numbers. Your clients can still provide consent by completing the form which is available under the administrative forms section on client management. Most of our Fidelity funds have GBP share classes available and you may want to consider switching your clients non-gbp share classes into the equivalent GBP version. Alternatively, you may be able to select funds across the rest of the fund range available. Identifying clients accounts eligible for migration Using the Account Information report you can identify eligible clients by filtering on the MigrationEligible column or column I. Will you be writing to my clients? In December 2016 we issued our revised Client Terms to all of your clients. In addition to the new Client Terms, some clients will receive additional correspondence relating to specific actions that will impact their accounts. These will be sent separately.

4 Types of client communication Changes to our share dealing service Clients who hold investment trusts or exchange traded products will be provided with information about: The changes in charging The movement to whole share dealing, including selling partial shares during the migration The changes to corporate action notifications for these types of investments The most important change for these clients is the new charge for regular transactions (regular savings, withdrawal plans and phasing instructions) and income reinvestments. The charge for all of these will now be 1.50 per transaction, regardless of the value, rather than today s charge of 0.1% of the value. In order to avoid the charge for income reinvestment, you can instruct us to pay natural income into product cash. For corporate action notifications, clients will need to have registered for our online services in order to receive these. If the client is not set up online, but we do have an address for them, we will be able to notify them of corporate actions, but with less account specific information than is included in the online notification. You can identify impacted clients using our Account Information report and filtering on ETPs or column Q. This column shows where clients currently hold Exchange Traded Funds, Exchange Traded Commodities and/or Investment Trusts. Clients who have accounts with mixed remuneration Since the implementation of RDR and the move to adviser fees, there are still a number of clients who have assets in old commission pots, but also have some assets paying fees. On our new system, accounts can only be set up with a single fee rate. Any accounts where some of the assets are on fees, will be split at the time of migration, with the fee assets retaining the existing account number and fee rate. A new account number will be allocated for the old commission assets and the fee rate will be set at 0%. Any accounts with mixed remuneration where some assets are in a commission pot and some have a fee rate of 0% or 0, will not be split, but the entire account will be set up on a 0% fee basis. We will be writing to you and your impacted clients to provide you with the opportunity to review these accounts and assess the best course of action. To identify impacted clients with mixed remuneration, use our Account Information report and select MixedRemuneration and AdviserFeeRate or columns N and O.

5 Allocating new account numbers There are a number of instances where your clients may be allocated new account numbers at the time of migration. The account is split due to mixed remuneration, as explained above The assets set up with fees will retain the existing account number The assets set up in old commission pots or plan years will be moved to a separate account with a new number The account number includes characters that do not conform with our new system, such as apostrophes and spaces We will be writing to impacted clients prior to migration for their information and then again just after migration to tell them their new account numbers. These changes will not impact your clients ability to access their accounts online. Please note: if you are integrated with a back office provider, you will need to update your clients account numbers, if they have been allocated new ones. To identify clients with new account numbers (post-migration), use our Account Information report and select PreviousAccountNumber or column F. Clients with Regular Savings Plans When clients accounts are moved on to the new system, they will not be able to hold more than one regular savings plan within the same account that have different investment choices. We are writing to clients with multiple regular savings plan investment choices to ask them to review and update their account. If we do not receive an update from either you or your clients we will select the most recent instruction and retain this on their accounts. The most important change for clients with active regular savings is that it will take two days from the point the money is taken from their account to being invested. We will continue to collect payments on the dates currently set up, until you or your clients make a change to their regular savings plan. The new system has a choice of four different collection dates. To identify regular savings use our Account Information report and select ActiveRSP or column U. This will show you whether they have one or more active regular savings plans.

6 Different natural income preferences Currently it is possible for a client to hold multiple instances of the same investment within an account due to our plan year and fee segregation. Once accounts are migrated to the new system, there will only be one instance of any investment in an account. If there are currently different income preferences set up at an investment level, we will be writing to your clients to ask for their preference or we will set a default if they do not respond. The default is reinvestment for each investment choice. To identify these clients, use our report and select IncomeMismatch or column Z. Overseas clients Clients who are not normally resident in the UK, with the exception of British Forces or Crown Employees, will not be migrated until later in our migration programme. We will confirm the exact date closer to the time. Before we move these clients to the new system, we will write to them to let them know about dealing restrictions relating to any funds they may hold today. Depending on clients residency it may be possible to switch or top up these funds today; however once they are migrated they will no longer be able to transact on any funds other than to redeem them. To identify these clients, use Account Information report and select ClientResidency or column X. Then filter this column and deselect United Kingdom.

7 Important information where additional correspondence is not being issued Consent to move Fidelity funds to a nominee structure You may remember that when we converted assets on the platform into clean share classes in 2015, we also asked clients who held Fidelity funds in Investment Accounts to consent to move these assets into a nominee structure. This is necessary in order to migrate these assets to the new system. For clients who have not yet consented, you can provide them with a consent form that is available in the application forms section of our website - select Carry out an administrative task, then General to find the Fidelity Funds Consent Forms. If no action is taken, these Fidelity assets will remain on the current system. If an Investment Account holds both non-consented Fidelity assets and migration-eligible assets, then the Fidelity assets will be split out into a new account at the end of 2017, and this new account will remain on the existing system. The eligible assets in the original account will be migrated to our new system. Note that giving consent at this point will not result in these assets being converted into clean share classes, however a rebate will be applied to any bundled share classes. The client can still switch into the clean share class and until the account has been migrated, same day switching applies on the current system which provides the same outcome as a fund conversion. You can identify these clients by using our Account Information report and selecting ConsentStatus or column L. Accounts holding non-gbp denominated investments Accounts holding non-gbp based investments cannot be moved to the new system as the migration is at account level rather than investment level. If no action is taken, the non-gbp assets will remain on the current system. If an account holds both non-gbp assets and migration-eligible assets, then the non-gbp assets will be split out into a new account at the end of 2017, and this new account will remain on the existing system. The eligible assets in the original account will be migrated to our new system. You can identify these clients by selecting Non-GBPAssets or column M.

8 Deceased clients Where a client has passed away and the assets have not yet been sold or transferred to a beneficiary, we will not move these accounts to the new system and we will not write to the executors. At the time we receive an instruction to move assets to a new beneficiary, and the assets remain with FundsNetwork, we will ensure these are moved either into an account on the existing system and later migrated, or moved directly to an account on the new system if the beneficiary has been migrated. You can identify these clients by selecting DeceasedStatus or column P. Assets held in cash Any money held in a Cash Park today, will be migrated to our new product cash facility, within the relevant account on the new system. Each account on the new system will have product cash. Money held as part of an active phased instruction will be moved to a new Phased Cash facility within clients accounts. To identify any clients with cash in their account select CashAssets or column T. To see if the cash relates to a phasing instruction select ActivePhasingInstructions or column W. Lost contacts It is important to note that clients for whom we do not hold a current address will not receive any paper communications from us relating to the migration of their accounts to the new system. If the client is signed up to an online account, they may receive an online notification if their login details are still up to date. Please review any lost contact clients and notify us of updated contact details in order to ensure clients receive important information relating to their accounts. You can identify impacted accounts by filtering the Account Information report on the LostContact or column Y.

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11 For further information about our enhanced administration and investment services coming soon, please speak to your usual contact. Issued by Financial Administration Services Limited, authorised and regulated by the Financial Conduct Authority. FundsNetwork, and its logo are trademarks of FIL Limited. UK1117/20999/SSO/0118