Client Agreement - What we do & how we charge

Transcription

1 Client Agreement - What we do & how we charge We are a financial planning business, focused on helping you understand and plan for your financial future. This information is designed to give you an idea of: What we do and how we do it (our services) What it s likely to cost and how you can pay us This document should be read in conjunction with our Terms & Conditions which will have been provided to you no later than the start of any initial meeting you have with an adviser. This document provides details about our services to you and how we charge, so it s important that you read it fully. If there is something you don t understand please ask us to explain it. Our services Whatever financial decisions you make, the first step towards making the right decisions is to establish a clear understanding of your financial needs. People seek financial advice for many different reasons so it s important that we understand exactly who you are and what you want to achieve. At our first meeting, we ll gather information about you to help assess your needs and define your priorities. Our services include: Financial planning: It s important to identify what you might want to achieve and how you can do this. We can help you to identify your goals and create a plan for your finances to help you achieve them. Retirement planning: It s important to know whether the money you are saving towards retirement will provide you with sufficient funds to meet your retirement objectives. We can work with you to proactively plan for your retirement and help you decide on the options available once at retirement. Protection planning: Most of us want to protect the things that are important to us, our family, business and quality of life. Protection planning can help to provide peace of mind in the event of your income changing due to unexpected events. We can help you plan for the best way to protect you, your family or your business. Tax planning: Many traditional investments, such as pensions and ISAs, help to reduce tax. However, other investments may also provide tax advantages and, once we have assessed your objectives, we will discuss these with you and recommend them where we feel it is appropriate to do so. Client Agreement MiFiD II part 1 V Page 1 of 8

2 Our advice We offer independent advice. This means that we consider a wide range of financial strategies and products. We are constantly reviewing the market to ensure that the services and products we offer are appropriate for our clients. Where we recommend investment strategies and products to you, these will be selected based on your personal circumstances, financial goals and objectives. We ll consider many factors, including the services you need, the cost of investing, your objectives, how long you need to invest for, how much risk you are prepared to accept in an investment product and how much of a drop in its value you could withstand. The areas we can advise on include: Life assurance ISAs Investment bonds Unit trusts Pensions Open ended investment companies Annuities Investment trusts Phased retirement & income drawdown Exchange traded funds Term Assurance Enterprise Investment Schemes Critical illness Venture Capital Trusts Income protection Structured products, including structured deposits We don t provide advice in relation to individual share holdings. If this is something you need assistance with, we can refer you to a stockbroker. Nor do we provide advice on options, futures and other derivative contracts as we believe that these are unlikely to be suitable for our clients. Again, if you need assistance with these types of investments, we will refer you to a stockbroker. We are unable to assist with tax queries unless these relate to investments we have established. If you have general tax questions you should speak to an accountant. We can recommend one to you if necessary. Our charges The way we are paid for our services may depend on the type of advice given. Typically, this will be: Investment business: fees agreed and paid by you, either directly or from a deduction applied to your investment Insurance business: fees agreed and paid by you or by commission payable by the insurance provider, which is a percentage of the total annual premium More details on these options and how they are paid is found in the following sections on initial and ongoing charges & fall into the following categories: a) Initial charges: these are the upfront costs of our services. We offer several types of initial service depending on your needs. These are explained in more detail below. b) Ongoing charges: once your financial plan has been established it is important to keep it under review so it can be adapted, where necessary, as your circumstances change, and you are able to speak with your adviser or any member of the team whenever you need to. Our ongoing charge ensures that these important features can be provided. Further details of our ongoing services are included later in this document. Client Agreement MiFiD II part 1 V Page 2 of 8

3 Initial charges All initial advice will follow the same process, which is vital in ensuring we provide you with a financial plan that is specific to you and meets your objectives. The initial service is split down as follows: This service includes: An initial meeting to find out more about you or to update your existing information, the cost of which is covered by Independent Financial Solutions Agreeing your financial goals and objectives Establishing your attitude to and understanding of risks Reviewing your current plans, investment and assets Undertaking research to identify appropriate plans and solutions Providing a personalised report and recommendations, including all the associated charges A face to face meeting to discuss our recommendations Implementation of agreed recommendations Our initial charges relating to new work, such as a new client take-on, new and additional investments and periodic suitability assessment will vary depending on the time required to complete our research and present our recommendation, the complexity of the financial planning required and the level of administration required to complete our work. More details are shown in the following tables 3% initial advice fee highly complex planning and greatest due diligence requirement This is the standard fee for all tax privileged investments, such as EIS and VCT The minimum fee for this area of advice is 750 (+ VAT where applicable) with a maximum initial fee of 5,000 (+ VAT where applicable) Examples For an investment of 20,000, the minimum fee of 750 would apply + VAT where applicable. This is because our standard 3% fee would fall below our minimum ( 20,000 x 3% = 600) For an investment of 100,000, the fee chargeable would be 3,000 ( 100,000 x 3%) + VAT where applicable For an investment of 250,000, the fee chargeable would be 5,000 + VAT where applicable, as applying our standard fee of 3% would exceed our maximum ( 250,000 x 3% = 7,500) Client Agreement MiFiD II part 1 V Page 3 of 8

4 2% (sliding scale) initial advice fee complex planning and high levels of due diligence and administration For the first 75,000 invested, fee would be 2% For the next amount between 75, ,000 invested, fee would be 1% For any further amounts above 300,000 invested, fee would be 0.5% At Retirement Planning This is the standard fee that applies in the event of a pension crystallisation event (drawing your pension benefits). This will include drawdown (capped and flexi-access) and annuity purchase (standard or investment). The fee is applied after the tax-free cash has been paid for full drawdown or annuity purchase and on each transfer of funds into drawdown for phased retirement. Lump Sum Investments This is the standard fee for any advice relating to single contributions or transfers to an ISA, OEIC, Bond and any non-pension related investments, including investments which qualify for Inheritance Tax exemption via Business Property Relief that also fall into this category. The minimum initial fee for this area of advice is 750, with a maximum initial fee of 5,000 (VAT will not apply) Examples For an investment of 20,000, the minimum fee of 750 would apply, as applying our standard 2% fee would fall below the minimum level ( 20,000 x 2% = 400) For an investment of 75,000, the fee chargeable would be 1,500 ( 75,000 x 2%) For an investment of 150,000, the fee chargeable would be 2,250 (2% of the first 75,000, then 1% of the remaining 75,000) For an investment of 500,000, the fee chargeable would be 4,750 (2% of the first 75,000, then 1% of the next 225,000, then 0.5% of the remaining 200,000) Commission based initial advice lowest level of planning and due diligence but high level of administration Where we are paid by commission we will tell you the amount before we carry out any work for you. Although you do not pay us a fee, it does not mean the rest of our service is free. You pay us indirectly through the monthly premiums collected from you by the insurance company. Commission is now only paid on insurance products and is the only area of financial planning that Independent Financial Solutions advises on that pays commission. Full commission will be charged on all cases with an upper limit of 5,000. Commission payable above this level will be rebated back into the policy to reduce the premiums you pay. To attempt to reduce the number of cases that do not proceed on medical grounds or that must be re-submitted with another provider after underwriting we reserve the right to charge a VAT fee for non-disclosure of material facts Client Agreement MiFiD II part 1 V Page 4 of 8

5 Initial charges can be paid in a number of ways: Payment options Cheque or electronic transfer directly from yourself (unfortunately, we cannot accept payments by cash). Payment via deductions from the financial product(s) you invest in or (if relevant) deductions from the amount invested with a discretionary fund manager (DFM). Most product providers / DFMs offer this facility but using it will reduce the amount you have left to invest. For investments held on a platform (an online investment administration service) you may choose to pay our charges out of the funds held in the platform cash account, although it s important to maintain sufficient funds in the account to cover our charges as they become payable. If, because of our recommendations, you take out a regular contribution product, it may be possible to have our initial charges deducted from the product in instalments (where the provider is able to offer this facility). In such cases, our normal approach will be for the payment to be spread over a maximum of 12 months. Our standard fee is 400 for advising on and establishing an ISA or other, non-pension, investment plan and 750 for a pension plan. Example - based on a 200 per month pension policy: The initial charge for our service 750. The monthly charge over 12 months is 750 divided by 12 = Each month you pay your product premium of 200 but for the first 12 months your product provider pays us of that 200. For the first 12 months - 2,400 is paid to the investment, but 750 pays our charge, leaving 1,250 to be invested. Example - based on a 200 per month ISA: The initial charge for our service 400. The monthly charge over 12 months is 400 divided by 12 = Each month you pay your product premium of 200 but for the first 12 months your product provider pays us of that 200. For the first 12 months - 2,400 is paid to the investment, but 400 pays our charge, leaving 2,000 to be invested. Client Agreement MiFiD II part 1 V Page 5 of 8

6 Ongoing service & charges Our ongoing services are optional, but your financial objectives may change over time, due to changes in your lifestyle or circumstances. We believe is it essential to ensure that your portfolio continues to meet your lifestyle and investment objectives, so we therefore recommend that all clients choose to receive an ongoing service, either our Standard Service of 0.5% per annum, or our Enhanced Service of 0.75% per annum. Details of these Service Levels are set out below. Ongoing Service Level Annual Charge (% of holding value) Description of Service NONE NIL Standard 0.50% Enhanced 0.75% NO ONGOING SERVICES OFFERED AFTER COMPLETION OF THE INITIAL ADVICE (you are however welcome to contact us to arrange an ongoing advice service in the future) We will write to you once a year to see if there are any changes and to ask in the first instance if you would like us to make contact by or telephone to discuss any new requirements, PLUS You will have ongoing access to your adviser throughout the year You will be able to contact our office by telephone or during working hours for administrative support We will forward relevant correspondence to you to keep you fully informed We will send an investment valuation summary to you annually We will offer an annual face to face, or telephone consultation with your adviser to discuss your circumstances, & review your risk profile & objectives You can choose to pay for an extra face to face meeting at any time, if you wish to discuss any material changes in your circumstances, and to ensure your current investments still meet your needs We will write to you once a year to see if there are any changes and to ask in the first instance if you would like us to make contact by or telephone to discuss any new requirements, PLUS You will have ongoing access to your adviser throughout the year You will be able to contact our office by telephone or during working hours for administrative support We will forward relevant correspondence to you to keep you fully informed We will send an investment valuation summary to you annually We will offer an annual face to face, or telephone consultation with your adviser to discuss your circumstances, & review your risk profile & objectives We will carry out an interim 6 monthly telephone consultation to assess investment performance against the goals established at the annual review meeting. We will also update your circumstances & goals & assess the ongoing suitability of the plans we have recommended* We will also offer ONE additional meeting each year, in addition to the core annual review meeting, to be arranged at your convenience *We will need to make sure that the information we hold about you remains accurate and up to date. Once you have confirmed the information is accurate, we ll issue you with a report setting out the results of our assessment and, where relevant, any updated recommendations Client Agreement MiFiD II part 1 V Page 6 of 8

7 Ongoing charges The ongoing charge for our standard service is 0.5% per annum of the total market value of the investment funds that we manage on your behalf. The ongoing charge for our enhanced service is 0.75% per annum of the total market value of the investment funds that we manage on your behalf. Example Standard Service - For a fund of 100,000, the annual fee would be 500 ( 100,000 x 0.5% = 500) Enhanced Service - For a fund of 100,000, the annual fee would be 750 ( 100,000 x 0.75% = 750) The tax privileged investments, such as EIS and VCT, will each have a fixed ongoing fee payable to us, which will be subject to VAT, with the cost of the VAT met by us. These will be disclosed to you prior to any investment being recommended, but will never exceed 0.5% per annum. You can cancel the ongoing service at any time but we reserve the right to collect any unpaid fees. Payment options Ongoing charges can be paid in a number of ways: A regular fee, paid by standing order By deduction from your investment(s) on a monthly, quarterly, six-monthly or annual basis, where the product / platform provider or DFM is able to offer this facility For investments held on a platform (an online investment administration service) you may choose to pay our charges out of the funds held in the platform cash account, although it s important to maintain sufficient funds in the account to cover our charges as they become payable. Other charges Depending on the services we provide, there may be costs and charges (including taxes), not charged by us, but related to the financial products we arrange for you. These charges may be oneoff charges (payable up front) or charges payable on an ongoing basis. For example: Service costs: If your investments are held on a platform (an online investment administration service) or held with a DFM, the platform provider / DFM will make a charge for administering / managing your investments. Investment costs: These are the costs relating to the manufacturing and managing of your investments for example, fees charged by the investment fund manager, costs relating to investment transactions. We ll always disclose any third-party costs as part of our recommendation. Aggregated costs and charges Before we provide you with our advice we will add together all the costs and charges payable so that you are able to understand the overall costs of our services and recommendations. This is referred to as aggregated costs and charges information. These aggregated costs and charges will be set out in our advice letter, which will be sent to you before you make any decisions about how best to proceed. Client Agreement MiFiD II part 1 V Page 7 of 8

8 Protecting your personal information To provide our services properly we ll need to collect information about your personal and financial circumstances. We take your privacy seriously and will only use your personal information to deliver our services. Processing of your personal data is necessary for the performance of our contract for services with you. Generally, this is the lawful basis on which we intend to rely for the processing of your data. (Please see the reference to special categories of data below). Our policy is to gather and process only that personal data which is necessary for us to conduct our services appropriately with you. We adopt a transparent approach to the processing of your personal data. Sometimes, we may need to pass your personal information to other organisations. If you apply to take out a financial product or service we ll need to pass certain personal details to the product or service provider. We may engage the services of third party providers of professional services in order to enhance the service we provide to you. These parties may also need to process your personal data in the performance of their contract with us. The organisations to whom we may pass your details also have their own obligations to deal with your personal information appropriately. Our Privacy Notice is available on our website. This is a is a separate document which provides more information about the nature of our personal data processing activities and includes details of our retention and deletion policies as well as your rights of access to the personal information that we hold on you. Sensitive personal data Special categories of personal data: there are certain categories of personal data that are sensitive by nature. The categories include: data revealing racial or ethnic origin, political opinions, religious or philosophical beliefs, trade union membership and data concerning health. Depending on the nature of the products and services that you engage us for we may need to obtain your sensitive personal data only in relation to health. Our policy is that should we require any special category of personal data we will discuss this with you when we obtain it from you, we will only collect health information if it is necessary for the advice we will be giving you. If our advice leads to a contract whereby your health information is required this will be passed to the relevant insurance company only after you have signed the provider s application forms. If you have any concerns with regards to your personal data please in the first instance speak to your adviser or our Data Controller, Mike Reidy. Client Agreement MiFiD II part 1 V Page 8 of 8