Page 1

Official Magazine of the Institute of Financial Planning

October 2012 | £4.95 |

Financial Planner


Real Life Case Study Estate planning challenges | page 17

Avoiding the investment abyss Investment | Survey begins page 20

Technical Update The expat market | page 27

2012 IFP Conferen ce Preview page 8

The IFP’s next President Exclusive: Interview with IFP President-elect Rebecca Taylor FIFP CFP | page 24 CM

Contents | editor’s column

In this issue NEWS & COMMENT

8 | IFP IN THE NEWS IFP communication director Sue Whitbread gives a full Page 5: Conference preview of what Financial Planners can expect from this year’s almost upon us IFP Annual Conference “Inspiring Trust.” 10 | LETTER FROM WHITEFRIARS IFP chief executive Nick Cann on the parallels between the Olympic Games and Financial Planners in the run-up to RDR. 10 | LETTERS TO THE EDITOR 11 | BRANCH MATTERS: Craig Palfrey CFPCM Page 11: Branch chair Craig Palfrey CFPCM, chairman of the South Wales branch, CM on his logic behind a decision to hold fewer branch meetings. Craig Palfrey CFP 13 | TRAINING & CPD UPDATE All the latest training and CPD news for planners and those looking to move up the professional ladder.

INSIGHT AND ANALYSIS 17 | REAL LIFE CASE STUDY: Will complications Carl Martin CFPCM of Carpenter Rees recalls a real-life case study on the dangers of failing to write a proper Will. Page 17: Unravelling a complicated Will

24 | Interview with the incoming IFP President: Rebecca Taylor FIFP CFPCM Interview with President Elect of the IFP, Rebecca Taylor, on her plans to take over from Marlene Shalton FIFP CFPCM. 27 | TECHNICAL UPDATE: Expat Planning Tim Thornton-Jones from Berkeley Law offers advice on estate planning for expats leaving the UK.

Changes ahead as advisers prepare for the countdown to RDR implementation The IFP Annual Conference taking place in early October will mark a watershed in the history of Financial Planning.

5 | FINANCIAL PLANNING NEWS IFP Annual Conference update and why JP Morgan thinks advisers will struggle to offer an ongoing service post RDR.

20 | Cover feature: Investment Survey An investment survey by Sally Hamilton looking at what lies ahead for investors in the next 12 months and the after-effect of the Olympic Games.

Letter from the editor

It will be the last conference before the Retail Distribution Review comes into effect, marking the end of the commission-based financial advice system. Adviser charging will be the order of the day from next year but Financial Planners know that while the RDR is an inevitability the future is far from clear, certainly for many IFAs still reliant on commissions. For them the future is less than clear and many by now will have made their minds up whether to opt for a fee-based Financial Planning style approach or a more restricted model. Either way, commission-based IFAs face major upheaval in the way they do business while IFP members face a more certain future where the way they do business, while it will change, will not change as much. This is not the time, however, for Financial Planners to brag about the fact their model has been the favoured option by the regulator. For the fact is that Financial Planners have long stuck to their knitting, offering high quality, client-focused advice mainly paid for by a fee or a charge on assets under management. Because of this the IFP membership can look forward to a positive conference where the theme of “Inspiring Trust” and the desire to develop greater professional skills are foremost. The RDR is for most a sideshow, not a distraction. Whether you are attending the conference or not, you can keep up with all the conference news at www. where we will be running a daily news service. We’ll also be tweeting frequently @FPM_Online with conference news and background. We will, of course, also bring you a full round-up of the key news from conference and a picture gallery in our next issue published in mid-October. As ever we welcome your comments and suggestions so feel free to drop me a line to the email address below.

Page 24: Rebecca Taylor FIFP CFPCM


Kevin O’Donnell Publisher and Group Editor kevin.odonnell @FPM_Online

29 | IFP NEWS The latest news about Financial Planning Week and the final column from Marlene Shalton FIFP CFPCM. 32 | IFP EVENTS 33 | SPONSOR NEWS This month IFP sponsors Pershing and Vanguard explain why they are backing the IFP and Financial Planning.

Page 32: IFP seeking views on events

34 | DIARY Seven Investment Management take Harlequins Rugby players on a tour of the City and Financial Planners get sporty. The official magazine of the Institute of Financial Planning Financial Planner is the official journal of the Institute of Financial Planning. Founded in 1986, the IFP is the exclusive licensee of the CFPCM mark. Financial Planner welcomes articles and correspondence from both members and non-members of the IFP but cannot be held responsible for lost manuscripts. It is recommended that contact be made with Financial Planner’s editorial team before submitting manuscripts. Views, opinions or claims in this magazine are not necessarily subscribed to by the Institute of Financial Planning or Portfolio Publishing and regulatory due diligence is not performed on authors. The IFP and Portfolio Publishing can accept no responsibility for loss occasioned to any person on taking or refraining from action as a result of the material contained herein.

©Portfolio Publishing 2012 Contact & Publishing Details: Subscriptions: 01895 678629 Full contact details p34

Institute of Financial Planning, Whitefriars Centre, Lewins Mead, Bristol BS1 2NT 0117 945 2470 Fax: 0117 929 2214 search for Institute of Financial Planning @IFP_UK | October 2012 | 3









RS *

Bravo! Top talent worth applauding. Henderson Sterling Bond Unit Trust Henderson Sterling Bond Unit Trust

Quartile Ranking

1 Year

2 Years

3 Years

Since managing fund^

2 1 1 1 nd




Source: Morningstar at 31 July 2012, based on cumulative performance, mid-mid, UK sterling, net income reinvested for a basic rate tax payer. ^Stephen Thariyan and Philip Payne took over management of the Henderson Sterling Bond Unit Trust on 9 April 2009.

The Henderson Sterling Bond Unit Trust is top decile since Philip and Stephen took over management of the fund in 2009^ and has delivered a total return of 103.2%, outperforming the IMA Corporate Bond sector average by 51.8 percentage points*. Now that’s performance worth applauding. Henderson Sterling Bond Unit Trust: • Invests principally in investment grade corporate bonds • 3.6% distribution yield and 3.6% underlying yield, paid quarterly† • 1st decile over 3 years* • Expertly managed by Philip Payne and Citywire AAA rated Stephen Thariyan Past performance is not a guide to future performance. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested. Yields may vary and are not guaranteed.

Scan QR or enter short code to access more information:

0800 856 5555

It takes talent and expertise to achieve results and skilled fund managers Philip Payne and Stephen Thariyan are certainly top of their game.

Expect something special

This advertisement is for professional advisers only. *Source: Morningstar at 31 July 2012, based on cumulative performance, mid-mid, UK sterling, net income reinvested for a basic rate tax payer. ^Stephen Thariyan and Philip Payne took over management of the Henderson Sterling Bond Unit Trust on 9 April 2009.† Yields are shown gross. The Distribution Yield reflects the amounts that may be expected to be distributed over the next 12 months as a percentage of the mid-market share price of the fund at 31 July 2012. The Underlying Yield reflects the annualised income net of expenses of the fund as a percentage of the mid-market share price of the fund at 31 July 2012. Rating shown is as at 31 July 2012. Issued in the UK by Henderson Global Investors. Henderson Global Investors is the name under which Henderson Global Investors Limited (reg. no. 906355), Henderson Fund Management Limited (reg. no. 2607112), Henderson Investment Funds Limited (reg. no. 2678531), Henderson Investment Management Limited (reg. no. 1795354), Henderson Alternative Investment Advisor Limited (reg. no. 962757), Henderson Equity Partners Limited (reg. no.2606646), Gartmore Investment Limited (reg. no. 1508030), (each incorporated and registered in England and Wales with registered office at 201 Bishopsgate, London EC2M 3AE) are authorised and regulated by the Financial Services Authority to provide investment products and services. Telephone calls may be recorded and monitored.


Countdown begins for the IFP’s 25th Annual Conference at Celtic Manor There are just days to go until the UK’s biggest Financial Planning event, the 25th IFP annual conference, takes place in Wales. The conference, themed on Inspiring Trust, is taking place from 1-3 October at the 5 Star Celtic Manor Resort Hotel in Newport, South Wales. Over 600 people are expected to attend including Financial Planners, Paraplanners, exhibitors from IFP sponsor firms and journalists. Delegates will be able to enjoy an informative and thought-provoking programme, network with fellow professionals and focus on how they can differentiate their businesses by inspiring trust. Keynote speakers include Carl Richards from the Behavior Gap, Jacqueline Gold, founder of Ann Summers, Ian Taylor, chief executive of Transact, and Greg B Davies, head of behavioural finance at Barclays. As well as keynote speakers there are track sessions, personal development sessions and “fringe

sessions” to enable delegates to get the most out of their attendance. Topics covered will include creating capital value, behavioural finance, platforms, inspiring future professionals, coaching programmes and social media. Sessions are tailored to meet CPD categories. A full programme of speakers and events is available on the IFP website and delegates are advised to study this in advance to plan ahead. This conference will also mark one year of the Accredited Financial Planning FirmsTM initiative, which was launched at last year’s conference, and the corresponding Great Minds Think Alike campaign as well as Shane Mullins’ Question of Trust campaign which is backed by the IFP. The conference is lead sponsored by Transact and many firms will be exhibiting such as Aviva, Deutsche Bank, HSBC, James Hay and Pictet. Nearly 50 firms are taking part. Nick Cann, chief executive of the IFP, said: “Our conference theme

Celtic Manor, venue for IFP Conference of Inspiring Trust could not be more appropriate given the current environment. With this being our last opportunity for the Financial Planning profession to gather before the RDR, it’ll be intriguing to hear from the leaders of the profession both in the UK and from overseas.” See preview pages 8&9 plus Letters 10&11. Follow the conference via daily coverage with Financial Planner Online and look out for extensive coverage and photographs in the next issue of Financial Planner. @FPM_Online or @IFP_UK

Potential fee-based market should be “compelling” says JP Morgan report Jasper Berens, head of UK funds at JP Morgan Asset Management, has described offering feebased advice post-RDR as “no easy challenge.” His comments came after a report suggested that just 13 per cent of consumers will be prepared to pay for ongoing advice. His views form part of a report by the firm, a sponsor of the IFP, entitled ‘Winning Propositions: The consumer market post-RDR’ which questioned over 2,000 consumers with incomes

of over £50,000. Some 81 per cent said they were seeking expert guidance on their finances but just 13 per cent were willing to pay for an ongoing service. Some 75 per cent wanted to pay for advice on a task by task basis rather than 16 per cent who wanted to make a regular ongoing payment. The report suggested firms needed to focus on features such as insight, empathy and proactivity to achieve ‘trusted adviser’ status rather than

service features alone. Over 90 per cent of consumers said their adviser being a ‘trusted source of advice’ was valuable to them. The majority of consumers wanted to see their advisers face to face once a year or less, regardless of age or asset size. Instead, they preferred contact via email. The report added: “The transition to a fee-based advisory culture in the UK is going to be hugely challenging, but the potential market for firms that do deliver attractive and commercial propositions is undeniably compelling.”

Advisers feel FSCS penalises responsible firms and want to see more transparency A survey by PanaceaIFA, an online site for financial advisers, found 97 per cent felt the Financial Services Compensation Service unfairly penalised responsible firms for the malpractice of others. The survey of almost 500 advisers found the same amount called for the FSCS to demonstrate greater transparency by clearly showing Preview of IFP conference - see page 8

how its charges arise and how they are balanced. Over half felt their firm would be unable to pay increasing levies and 54 per cent felt those receiving FSCS compensation should have an excess deducted to discourage illegitimate claims. Derek Bradley, chief executive of PanaceaIFA, said: “Transparency should apply across all aspects of our

industry and the FSCS should not be exempt from this.” Keith Richards, distribution and development director at Tenet, suggested a premium tax on products and investments would be a fairer way of temporarily funding the FSCS. This would work by charging a percentage of the investment or product contribution.

Notice of IFP AGM: 1 October 2012 IFP members are invited to attend the IFP Annual General Meeting at Celtic Manor Resort, South Wales on Monday 1 October at 4.30pm. The results of the IFP Board elections will also be announced. If members have any agenda items for consideration, please contact Sue Whitbread by 20 September at:

Ascentric holding advisers workshops on CIPS Ascentric, an IFP sponsor, will be holding seminars in late-September for advisers looking to implement centralised investment processes and advice propositions. Firms such as Henderson, 7IM, Vestra and Defaqto will all be speaking at the event as will the FSA. Sessions will be held in Manchester, Bath and London from 25-27 September.

Treasury Select Committee reports on LIBOR failure The Treasury Select Committee has published its report into the LIBOR scandal. The report highlighted failures by Barclays management, the Bank of England and the FSA in the rigging of the Libor rate by Barclays. Committee chair Andrew Tyrie described the actions by those involved as “disgraceful” and said urgent improvements were needed to restore confidence.

Recommendations made on simple products The independent steering group set up by the Treasury has made its initial recommendations as to how to develop ‘simple financial products.’ This includes an easy access savings account, a 30-day notice account and a simple term life insurance product. The group is tasked with creating a range of financial products to help consumers engage with the complex financial services market.

Cazenove offers help with RDR preparation IFP sponsor Cazenove Capital has launched a range of materials to help Financial Planners prepare for the RDR. The new range from the investment business includes accredited gap fill and structured CPD materials to help advisers gain their SPS. | October 2012 | 5


Financial services firms train staff about FSCS HSBC, Nationwide Building Society and Royal Bank of Scotland have become the first financial services organisations to train staff about the Financial Services Compensation Scheme. New rules mean firms must inform consumers about deposit guarantee schemes.

Young Britons priced out of financial advice Young Britons feel they are being priced out of taking financial advice. Consultancy MRM questioned 2,000 20-29 year olds nationwide and says respondents felt they would need to be earning £32,460 before they could afford financial advice.

Higher rate taxpayers missing out on benefits One in four higher rate taxpayers do not contribute to a pension, according to Prudentia. Pru says 216,000 employees are missing out on up to £438m each year in pension tax relief.

IFP backs new scheme to boost the number of graduate Financial Planners The Financial Skills talent, preferring existing Partnership has launched advisers. a new scheme to help Firms such as Aviva, Just unemployed graduates Retirement and Scottish become Financial Planners Widows, all sponsors of with IFP support. the IFP, will help provide The new Graduate the training to ensure Foundation College creates its quality. Successful opportunities for 150 candidates will be offered graduates to increase their work placements with employability in small and participating SMEs and medium-sized advisory firms Liz Field of FSP many will then be offered (SMEs). SMEs make up permanent jobs. 90 per cent of the financial services Liz Field, chief executive of the FSP, sector but find it hard to train new said: “This visionary new idea will

give unemployed graduates access to rewarding careers in a sector which many young people have found hard to enter. The Graduate Foundation College will also provide SMEs with a pool of high quality candidates.” Sue Whitbread, commmunications director at the IFP, urged IFP members to support the initiative by mentoring and hosting graduates. She said: “Given that many financial advisers are over 40, we have to encourage more young people so that they can develop the skills to take the profession to the next level.”

RDR prompts more to segment clients The RDR will prompt more Financial Planning firms to segment their client bases, according to Defaqto. A survey by the financial research company questioned 161 advisers and found almost half who do not currently segment their client bank were planning to do so by

RDR implementation. However, 41 per cent of those who do not segment clients, said they had no intention of doing so. A further 15 per cent were undecided. Defaqto has published a guide to help those advisers decide on the best process for them entitled ‘Segmentation: The

key to a successful advisory business.’ It includes five methods by which client banks can be divided. These include client revenue, assets under management and service type. The paper is available from

Award-winning expertise. Need a new direction? Parmenion provides a full suite of intelligent investment services to help you embed a flexible investment process into your business. Putting you in control so you can focus on what you do best.

Parmenion is proud sponsor of this year’s IFP Conference Welcome Evening. Steer the right course, contact our experts today. Call: 0845 519 0100 Email: Visit:

6 | October 2012 |


Real life case study - see page 17


Direct proposition AXA Self Investor launched by IFP-sponsor AXA Wealth AXA Wealth has launched its new direct proposition AXA Self Investor in response to adviser demand. The service aims to be an ‘innovative non-advised investment service’ which works alongside an adviser’s existing proposition. It will enable advisers to provide investment support to clients who do not require or cannot afford a full financial advice service and will enable clients to manage their investments at

a time that suits them. engage with financial Key features of the services is changing as are proposition include six the ways in which advisers multi-asset passive funds are doing business. from Architas, around “This type of offering 170 funds, a funds-based will be essential to stocks & shares Isa, no firms who look to get initial charges and funds Mike Kellard maximum value from that are free to buy, sell their client relationships, and switch. especially post-RDR, and will help to Mike Kellard, chief executive officer address the advice gap we believe at AXA Wealth, said: “The way clients RDR legislation will create.”

Blackrock aims to support advisers in developing fee-based businesses Blackrock, an IFP sponsor, has developed an online transitioning tool to help advisers move to a fee-based business model under RDR. The Blackrock Transitioning Tool will help advisers with three key problems; the level of fees to charge, defining their value proposition and how revenues will be affected.

The tool enables advisers to determine the cost of servicing clients, establish a client servicing proposition and understand the benefits of client segmentation. It also allows them to model potential revenues, forecast how these revenues will evolve over the next three years and how a practice is valued.

Blackrock also has built an Adviser Centre with best practice insights from 30 leading financial advisers. Tony Stenning, head of UK retail at Blackrock, said: “The tool will help advisers to test out different fee and servicing scenarios in order to get a picture of what will be most suitable for their own business.”

Sir David Walker to replace Marcus Aguis at Barclays Barclays has appointed Sir David Walker as chairman to replace Marcus Aguis. He joined Barclays in September as a non-executive director and will take over the chairman role on 1 November.

New appointments at Sandringham Sandringham Financial Partners, a new national model for restricted advisers, has appointed Julie Dartington as compliance director and John Hayden as operations director. Ms Dartington joins from 2plan while Mr Hayden joins from Intrinsic.

Advisers failing to recommend property Financial Planners are missing an opportunity by failing to offer clients joint commercial property purchases, according to Sipp provider Suffolk Life. Just 38 per cent of advisers had recommended such an option to their clients.

looking to fill the gap? We have designed a range of accredited gap-fill and structured CPD materials to help you fulfil your Statement of Professional Standing requirements. Access these materials at

0800 015 9592 For professional advisers only. Issued by Cazenove Capital, the name under which Cazenove Capital Management Limited (registered no. 3017060) and Cazenove Investment Fund Management Limited (registered no. 2134680), both of 12 Moorgate London EC2R 6DA and authorised and regulated by the Financial Services Authority, provide investment products and services. This document does not constitute an offer to enter into any agreement nor is it a solicitation to buy or sell any investment therein. Telephone calls may be recorded for training and monitoring purposes. The responsibility for assessing the suitability of financial products remains solely with the financial adviser.

G12044_PMS_Advert_FP_Gapfill_IFP4.indd 1 Cover feature - See page 20

04/09/2012 12:47 | October 2012 | 7

Inspiring Trust – Looking ahead to the IFP Conference 2012 With yet another sell-out IFP annual conference in store, the biggest Financial Planning event of the year is now just weeks away. Sue Whitbread, IFP communications director, PREVIEWS what delegates can expect.

Jacqueline Gold, chief executive of Ann Summers

Carl Richards, author of The Behavior Gap

John Cremer, motivational speaker

For three days from 1 October, almost 400 of the leading Financial Planners and Paraplanners from the UK and overseas will descend upon the glorious Celtic Manor Resort in South Wales for the 25th IFP Annual Conference. They’ll be joined by almost 200 experts from a host of different organisations relevant to the needs of Financial Planning professionals who

will be contributing to the event as session leaders, exhibitors, journalists and in many other ways too. Nick Cann, chief executive of the IFP, sees this year’s conference theme as being a key theme for 2013. While the IFP supports the Question of Trust campaign, the brainchild of Fiscal Engineers managing director Shane Mullins, building trust is key driver for 2013.

He said: “In reality this theme should underpin all our businesses. Survey after survey and extended consumer feedback confirms that trust remains the single most important ingredient in a strong Financial Planning relationship. The programme we’ve developed will help Financial Planning firms to differentiate themselves from 2013 in key areas around building trust through client service and having effective business processes in place. It’ll get people thinking differently about what they do and how they do it. The sessions are designed to help delegates to deliver more as a business but also, most importantly, to deliver more for their clients.” For the first time, Transact will be lead sponsor for the conference. As Malcolm F Murray, head of marketing at Transact, explained: “The next 12 months sees the watershed of a new era in Financial Planning which we believe will epitomise the core values represented by the IFP, its members and Transact. It is fitting therefore, that we should mark this historic year with our sponsorship of

IFP Conference 2012: Outline timings Day one: Monday 1 October 2012 11:30 Registration opens 12:30 Lunch/Exhibition opens 13:45 ‘How to’ sessions start A pick & mix programme of 30 minute sessions where you will pick up specific action points to put into practice immediately on a variety of topics 15:45 ‘How to’ sessions finish / delegate free time 16:30 IFP AGM – members only 18:00 Welcome evening begins Drinks reception in exhibition hall, followed by informal dinner & entertainment Day two: Tuesday 2 October 2012 08:00 Registration 09:00 Sessions start 11:10 Exhibition re-opens 15:40 Exhibition closes 17:00 Day 2 ends 18:15 VIP and Accredited Financial Planning Firms’ reception 19:00 Gala drinks reception 20:00 Gala dinner & entertainment Day three: Wednesday 3 October 2012 09:00 Registration 09:15 Personal development sessions 10:10 Sessions start 14:00 Conference ends Source: Institute of Financial Planning 8 | October 2012 |

this outstanding Financial Planning conference.” So what have delegates got to look forward to at Celtic Manor? With almost 50 separate programme sessions, providing a significant proportion of an IFP member’s structured annual CPD target, there’s not the scope to go into detail here so do check online at financialplanning. for full details but here are some of the highlights you can expect (see timetable left). Following an exclusive session for Accredited Financial Planning FirmsTM on the Monday morning, the exhibition will open at lunchtime on 1 October. Monday afternoon sees a new introduction for 2012, a series of “How To” workshops. Whether getting to grips with social media, PR and working with the media or a host of other topics, you’ll find topics to suit your needs. There’s also an exclusive session for IFP Fellows. This is followed by the AGM, to which all members are invited. Attending the IFP AGM is a great opportunity for members to catch up with their professional body and something we’d encourage members to add to their schedule. The new look Welcome Evening moves away from the exhibition hall and, courtesy of sponsors Parmenion, should be lots of fun too. We’re keeping the details close to our chest at the moment, but it won’t disappoint. Keynote sessions from Carl Richards CFPCM, of Behavior Gap, Jacqueline Gold, chief executive of Ann Summers, Ian Taylor, chief executive of Transact and John Cremer are likely to be highlights. As Mr Cremer commented: “Relationships are key to any successful business. I’m looking forward to helping delegates by

Sue Whitbread communications director Since 2006 Sue has been IFP communications director. She co-ordinates the IFP’s communications activities to ensure that members and journalists are kept up to date with the opportunities provided by the organisation via email, print and online. Sue works closely with IFP event manager Katherine Morgans to ensure that the annual conference lives up to the extremely high standards that delegates expect. Real Life CAse Study - See page 17

NEWS FEATURE giving them tools to rapidly connect with new clients and deepen trust and rapport with existing clients. We have all heard the phrase “different strokes for different folks” well this is a way to get to know your folks and the right strokes”. However, the track programme has equally powerful sessions and speakers, including sessions designed specifically for Paraplanners. The full programme is at, although delegates are urged to

study the details before they arrive. It’s a packed agenda, so working out in advance which sessions you most want to go to makes things easier. As usual, there will be a host of awards presented which recognise the achievements of people and firms in Financial Planning. Perhaps the award most keenly sought after in recent years has been the David Norton “Building Excellence” Award. There will be more than 500 of the profession’s most talented individuals

gathering at the Gala Dinner, this year kindly sponsored by Succession Group. Simon Chamberlain, chief executive, said: “The management of Succession Group have been longstanding supporters of the IFP and indeed the chair of our investment committee is a past President. We are uniquely placed to understand its principles and values and share these ideas with our advisers, staff and clients.” The evening will provide the showpiece of the event, with great

entertainment, food and company. Online networking site Twitter will be a popular way to keep in touch whether you’re at Celtic Manor or not. As well as tweeting the news via @IFP_UK and @FPM_Online we’ll all be using the hashtag #IFPConf to find out what’s going. If you’ve not yet discovered Twitter, why not use conference as a time to try it? There will be lots of experienced tweeters on hand to help. I hope to see you there!

What are you looking forward to at IFP Conference? We’ve asked some of the delegates attending this year’s event what they are looking forward to. Some are regular attendees, others are attending for the first time.

Ian Brookes CFPCM of Critchleys FP 2012 will be my fifth Annual IFP conference and it is now a regular fixture in my diary. Over the last five years I’ve met and listened to many inspirational people who have genuinely added to my development as a Financial Planner. I’m particularly looking forward to the session from Carl Richards having recently read his superb book ‘The Behavior Gap’.

Anita Gatehouse Cre8 Wealth Management The quality of the speakers and sessions is of such a high calibre and also so varied, from the likes of Carl Richards (whose wonderful Behavior Gap drawings are beautifully simple yet powerful) to Jacqueline Gold (the founder of Ann Summers) who has something for everyone, especially those of us who have read Fifty Shades of Grey! Last year, as usual, was a great opportunity to listen to motivational

speakers, delve into technical areas and, probably as important, meet and mix with friends and colleagues within the IFP community who, without doubt, are some of the most generous and supportive people around. I can’t wait! The only bit of icing on the cake would be if some tall, handsome Financial Planner swept me off my feet on the dance floor in a tango…I can but hope; one year somebody will surprise me.

Phil Stafford CFPCM Stafford & Co. I registered immediately after I returned to the office from last year’s conference. I always find the conference very motivating, especially the practitioners from abroad who offer a wider perspective on business development and client relationships. It is also great for networking with other planners and hearing how they are tackling the issues of the day.

Janet Walford OBE, former editor, Money Management I am greatly looking forward to meeting old friends again and making new contacts at my first IFP conference. I hope also, as a new director of the IFP, that the conference

will give me plenty of ideas of how I can help the IFP and its members in the challenging times ahead.

Joanna Hague The Consultancy Group Since the first conference I took part in, I’ve been back each year. As a Paraplanner, it gives me the opportunity to focus my thinking on particular subjects, open my mind to new ideas and to meet new people who are willing to share their experience and opinions on Financial Planning. Over the years I’ve met several likeminded Paraplanners who go to the conference not only for technical and professional development reasons, but who are happy to network and share their thinking on areas we use every day.

Karl Lavery CFPCM Manse Capital I see the IFP conference as an opportunity to exchange views and ideas with peers in a sociable environment. We are also seeking to further evolve and grow our business through ideas gleaned in the sessions that may be of use to us and the networking which invariably takes place.

Claire Goodwin Paraplanner, Taylor Oliver I love the fact that the IFP conference offers such great networking opportunities and a chance to meet so many like-minded individuals, Paraplanners and Financial Planners. The choice of speakers looks well thought out to me; I look forward to coming back to the office full of ideas and with a renewed vigour for my job.

Colette Cook CFPCM Gem & Co Financial There’s a terrific programme this year with a good mix of relevant topics. Going by past experiences, the quality of speakers and attendees will be brilliant so I look forward to hearing new ideas and exchanging views in an extremely positive atmosphere.

Chris Williams CFPCM Ashcourt Rowan Conference is a superb opportunity to consider the real issues that matter across Financial Planning regardless of your firm’s size or background. Not only a series of inspirational presentations, it is a great forum to share ideas with some of our profession’s most creative thinkers.

A Fresh Start in Sussex Financial Planner, Brighton and Worthing

The role involves handling referrals from the Brighton and Worthing offices of our accountancy firm. Advice is likely to be focused on investment portfolios and all types of pensions. Dedicated administrative and report writing support will be provided. You are likely to be qualified to Level Four with support for you to progress to Certified or Chartered Financial Planner qualifications. The role may also suit a Paraplanner, keen to make the move to advice. The package consists of an attractive salary, benefits and a competitive bonus incentive structure. Financial assistance with relocation will also be available, if necessary.

Please submit your application and CV by email to Technical update on expat planning- See page 27 | October 2012 | 9

Comment Letters from whitefriars Exciting times ahead this autumn with IFP Conference 2012 and new training programme These are very exciting times. After a fabulous summer of Olympic success and optimism there is still the grey economic cloud hovering over us and the broader Euro zone. October will see us hosting the last IFP conference before the impact of the FSA’s Retail Distribution Review kicks in at the start of 2013. The rest of the Financial Planning world will also gather at the Celtic Manor between the 15 and 19 October to see how CFPCM certification and the profession of Financial Planning is developing around the globe. The autumn is always an exciting time as success is recognised at the many award dinners and conferences at the same time that plans are being drawn out for the challenges and opportunities ahead. This year the IFP will see a big change in its board with four new Directors being announced at the AGM on the 1 October. Over the last year the IFP has also appointed two independent Directors in Richard Antrum and Janet Walford OBE who are both bringing a tremendous amount of external perspective to how we think through the IFP’s strategy for the next few years. Meanwhile, the IFP is moving office premises at the beginning of January. While staying in Bristol the new premises are excellent and will allow us to deliver far more of our own courses and have an examination centre to bring much more flexibility and support to the membership. It will also allow the growing team an even better working environment to serve the needs of the growing membership. The new Integrated Financial Planning training programme for those who have reached level 4 and now need to further develop their Financial Planning skills with a view to perhaps moving onto the CFPCM certification is being rolled out after some successful pilots. This programme will be available to members from 2013. With conference only weeks away focus is firmly on this event where we will welcome leading Financial Planners from the UK and abroad. A great line up of speakers drawn from around the world will provide the framework for a great few days for the Financial Planning community. There may still be places left at the conference but you’ll have to be very quick as we may be fully booked by the time you read this. Delegates who regularly attend tell us that they have been impressed by the friendly, positive and sharing environment that they find. Those that have been to IFP events know that the content and environment is great but the real benefit is the amount of immediate learning that delegates get that can mean immediate and significant improvements back in the office. Time and money well spent and it would be great to see you there.

NicK Cann Chief Executive Institute of Financial Planning www.financialplanning @Nickcanncfp 10 | October 2012 |

Letters Financial Planner’s Letters to the Editor section is the place to have your say. Keep your letter to a maximum of 300 words. Include your full name, company name, IFP designation if appropriate, daytime telephone number and email address. You can email your letters to: Names may be witheld from publicaton on request.

Looking forward to IFP Conference 2012

Letter of the Month

Sir, Due to a maddening set of personal circumstances I wasn’t able to make last year’s IFP Conference at the Celtic Manor Resort. I remember watching the Twitter stream and fervently wishing I was there in person. There’s no way I’m missing it this year though as I have been asked to present a track session on creating trust through online content such as blogs, podcasts and videos. This is a real honour, though it’s amazing to me that anyone would want to hear me talk! As the financial services profession strives to repair the damage done by decades of commission-driven mis-selling and the wider mistrust borne of the constant banking scandals, it is refreshing to see that this year’s theme is Inspiring Trust. We have such a long way to go, and it is a privilege to be an active part of the Institute, which is leading the way in this regard. One of the many reasons I love this profession is the sharing nature of its participants. Financial Planners are always so keen to share best practice, experiences and personal mistakes to further the cause as a whole. This ensures the coming generation of planners and Paraplanners will be equipped to meet the ever-changing needs of a population that is largely failing at engaging with money. I look forward to meeting friends old and new, to being challenged to raise my own game, and to taking time out of the busyness of running my practice. The conference environment is energising and inspiring – I can’t wait. I would say to any IFP member who has never been to the conference that it is worth every single penny of the investment in money and time. Consider it an investment in your future and I’ll see you there! Pete Matthew CFPCM Managing director, Jacksons Financial Services Cornwall @PeteMatthew

Win £50 Voucher WIN A £50 training voucher from the IFP to be used against any IFP training courses in the next year. To enter simply send your letter (350 words or less) to Financial Planner Magazine. The Editor’s decision is final.

The importance of due diligence in business partnerships Sir, We are on the verge of a brave new world with the RDR. It is becoming increasingly clear that in this new era business partnerships will be key. In the past couple of years we have seen the emergence of specialists rather than generalists in both the adviser and provider market, with more focus on specific business types and the nature of the relationship. It is important the adviser’s requirements are matched to the product providers they choose to have a relationship with. The key to this is likely to be determined through carrying out due diligence and requires a meeting of minds as well as business needs. When this process is carried out and all parties come to an agreement, they will understand where they stand in the business relationship, how they will be measured and what the service standards are. An exit strategy should also be included. Undoubtedly there will be ‘unknowns’ following the RDR deadline, but

these could create real business opportunities for the advisers that have already established their business model and are working in true partnership with providers who can help realise their business goals for the long-term. The overall process can be broken down into a series of key elements: Create a clear vision of the business proposition, gain an awareness of available market solutions, match provider propositions against requirements, gain confidence of a solution and agree commercial arrangements and undertake regular reviews and due diligence questionnaires to ensure solutions are still fit for purpose. Once business partners are chosen, ensure it is important there is a good working relationship and both parties are aware of each other’s future plans so the relationship can develop profitably for each of them. David Thompson Managing Director, AXA Wealth

Comment Thanks to IFP Fellows for all their help after unexpected accident Sir, I’d like to say a huge thank you to my fellow Fellows for your concern and good wishes at the Fellows Day in June. After the traumatic night I’d just endured, your welcome as I entered the meeting room was the perfect “pick-me-up”. I’d been enjoying a very pleasant meal in the restaurant the previous evening, but started to feel unwell. I got up to go outside for fresh air, and the next thing I knew I was coming round on the restaurant floor. Dexter, the hotel manager and a long-standing client of mine, called an ambulance. That afternoon I’d met Dexter and his wife Claire at the hotel for their annual review. I’d shown them the potential shortfall in their desired retirement income - so maybe the wrong person fainted! I was checked over by the paramedics and eventually declared fit and well, but I realised I could hardly walk on my left knee. It’s suffered from osteo-arthritis for years and I must have fallen heavily on it. Eventually it got so bad that I had to summon help in the middle of the night, and the same paramedics arrived to take me off to Cheltenham A&E. I’m pleased to say I am absolutely fine now, no after-effects - except for the knee, which has definitely been more painful and less pliable since. I managed to get an appointment with my usual specialist, who confirmed that the knee has deteriorated since my last check-up. Full replacement is my only option but having read about the potential disadvantages of this procedure, I would rather cope with the discomfort. Thank you also for asking me to chair the Fellows Group. I’ll see you all for the Fellows session at Celtic Manor. Francis Klonowski FIFP CFPCM Klonowski & Co, Leeds

Up to Financial Planners to display professionalism in the industry Sir, I am not often compelled to write and support an article within our chosen profession, but appreciate the effort and research you have put into this argument (Planning as professionalism: August issue) I have spent the last seven years, prior to my current position, employed with accounting firms (two of the largest six) and have often questioned our recognition for “profession” status. Partly out of cynicism for what I have witnessed in behaviour and partly of the disdain I have seen from the client side. There are fantastic people in these organisations, but I don’t believe their current cultures fairly represent what we refer to as “professional”, and subsequently don’t agree they should be what we aspire to embody. I am all for increasing standards and subsequent trust within the system, but unfortunately at the same time, certain examining bodies deem it necessary to move to multiple choice exam models, effectively reducing barriers to entry and ultimately our own credibility through an easier and faster

process. This may be to retain advisors in the industry, but have you ever seen the Solicitor’s Regulating Authority, as an example, drop their standards in order to keep numbers up? In addition the arguments around commissions v fees are missing the point, when it really should be about open transparency and clear expectations – both of which represent professional behaviour. I have seen too many “professionals” track every minute of the day, and yet without having disclosed the expected fee up front with clients, create anger when the bill is represented. Often the recovery rate on work-in-progress is only 60 – 65%. Is that really the professionalism we want to emulate? Something is rotten and until examples as this are addressed, I fear our attempts for the recognition we deserve will fall flat. Surely we can do even better than that on offer? To end on a positive note though, I enjoyed the article and the thought put into it. Some good points raised and seems certain that good examples of what can be achieved are available. To be truly professional I think we have to move beyond the RDR proposals, often aimed at the easiest things to measure, rather than the inherently intangible behaviour we all need to instinctively display. Devin Smith Senior Consultant, Charles Stanley Southampton

IFP TV classes can help planners and their firms prosper post-RDR Sir, There are still a lot of firms working to get themselves in good shape come 1 January, 2013. To help, we’ve made 10 short video master classes available on IFPTV and on our own website, In our work as business coach to Financial Planning firms, we find the biggest areas people are still grappling with are how to go about charging for what they do profitably and getting the review process aligned with the clients’ real objectives rather than simply providing an investment update. Getting these basics right is fundamental to a firm’s success. Improvements in these two areas are greatly enhanced when firms complete the advanced segmentation exercise explained in number three of our master class videos where we consider the top five issues of each client segment. In all walks of life, the people that achieve greatness do the basics better than everyone else. Our master class video series covers the four crucial areas of know where you are going, provide the right services, to the right clients and at the right price. Each task faced is broken down into bitesize pieces of work that help to make the overall task a lot less daunting. I hope that advisers and planners will enjoy the series and hit 2013 full of confidence. Brett Davidson Chief Executive, FP Advance London

Branch Matters Members of the South Wales branch network welcome delegates to the IFP conference As us Welsh look forward to welcoming you all across the bridge for the 2012 IFP Annual Conference, I am delighted to share my thoughts on how my first year as South Wales branch chairman has gone. Following the Branch Chairs’ meeting in September last year I decided on two things 1 - To have longer, but fewer meetings 2 - To invite speakers I would want to listen to Looking at the list of South Wales IFP members I realised we were well spread out geographically. I felt that if I made the meetings three or four hours long, with a variety of speakers at each, hopefully the members, and non-members, would be prepared to block out half a day in their diaries to travel and attend. Thankfully that has proved to be the case with over 30 Planners attending each of our three meetings this year. In terms of speakers - I know we have some fantastic ones coming to the Conference, but the three main speakers we have had so far would not be out of place at all! For my first three I played it safe and invited individuals who I had seen before, but never grow tired of listening to, who were all great speakers, motivational, thought-provoking and could add value to members and non-members alike. David Batchelor from Wills & Trusts kindly accepted my invite to speak at our January meeting and went down a treat. The feedback was exceptional from all the attendees, as David demonstrated how we should all be using trust planning with our clients as the cornerstone of good Financial Planning. Nick Cann was a great warm up act talking about SPS, but David stole the show! The flamboyant Paul Armson was as entertaining as ever at our March meeting as he pleaded with us all to make sure we are adding real value to clients pre, and post, RDR otherwise we could be in trouble when the banks get their head around how to offer service! Our June speaker, Michelle Hoskin, came straight from MDRT in California. Luckily she lit up the room as she demonstrated how good systems can take a Financial Planning practice to the next level. With the founder of Financial Planning, Paul Etheridge, due in November and Justin Urquhart-Stewart lined up for January 2013, hopefully the format of a main speaker, with some great short slots around them will continue to keep the numbers coming. Special thanks to Steve Skelding at Brewin Dolphin for providing us with a great venue. When a member put in their feedback about a squeaky door, lo and behold, following meeting, no squeak! That is service.

Craig Palfrey CFPCM South Wales branch chairman Penguin Wealth 02920 450143 @penguinwm | October 2012 | 11

For Financial Advisers only

Because it’s easier to work with someone who

knows your business, we’ll give you a

dedicated administrator. Call 0116 214 6108 for details of your own personal administrator

we’re with you

Professional Development

Training & CPD IFP pilots new FInancial planning course for companies keen to focus their business models on providing clients with comprehensive financial planning

New IFP Integrated Financial Planning Course for individuals planned for 2013 The IFP is piloting a new two day Financial Planning course with a number of advisory firms which are keen to focus their business model on providing their clients with a comprehensive Financial Planning service. The course has been extremely well received so far and, on completion of the pilot, the IFP plans to run the course for individuals in 2013. The course is designed to support the Financial Planning Standards Board’s (FPSB) Financial Planner Competency Profile, which contains the various competences required to be a successful Financial Planner. The competency profile can be downloaded from www. These competences may equally apply to Paraplanners, depending on the exact nature of their role. The diagram below shows there are three high level competency areas – Knowledge, Abilities and Professional Skills. Rarely do advisers or Paraplanners have any problems meeting the requirements of the knowledge segment as most professional exams focus on this aspect. Indeed the FSA’s professionalism requirements mean that all retail investment advisers will in future be qualified as a minimum to QCF Level 4. However, even where advisers or Paraplanners are qualified at a higher level or have studied Financial Planning theory, there are often gaps in both the “abilities” and “professional skills” segments. This can mean not being fully equipped to offer clients a holistic Financial Planning service. The Integrated Financial Planning Course is designed to bridge these gaps by integrating Financial Planning theory and practice. It helps advisers and Paraplanners apply their knowledge and to develop their “abilities” and “professional skills”. There are three high level areas covered within the “abilities” segment; collection, analysis and synthesis. Collection refers to the

ability to identify all the relevant information required to develop a financial plan, both quantitative and qualitative, including determining the client’s attitudes and level of financial sophistication. Analysis focuses on considering potential opportunities and constraints and the ability to assess information to develop Financial Planning strategies. Synthesis is perhaps the most challenging part – the ability to prioritise a client’s Financial Planning needs and understand the inter-relationship between the various components and then pull everything together into a comprehensive Financial Plan. The course guides delegates through the six stage Financial Planning process starting with how to engage meaningfully with clients, then identifying their Financial Planning needs, objectives and goals, and finally delivering viable Financial Plans. It allows delegates, through the use of a case study and alternative scenario evaluation, to explore the art and science of practicing

Financial Planning and exercise associated skills such as listening, inquiry, engaging, committing and presenting. Delegate participation is encouraged throughout. By the end of the two days delegates will have worked on all aspects of a Financial Plan, bringing together all the components into a comprehensive financial plan for a fictitious client. This makes sure they are well equipped to put Financial Planning theory into practice for clients as part of their role. Having completed the course, delegates may then wish to proceed on to attempt the Level 6 CFPCM qualification. The assessment involves completing a comprehensive Financial Plan based on a case study provided by FPSB UK within a 12 week period, which meets the required CFPCM certification assessment standards. Attending the IFP’s day Preparation Day to focus on preparing for the assessment and meeting the required standards, will give candidates excellent support to help meet the challenge.


Interview with Rebecca Taylor- See Page 24

Training newS CPD requirements for 2013 All Retail Investment Advisers need to meet the new CPD requirements in 2013. Start now to think about what sorts of CPD are relevant to your role, the type of activities you will undertake and how you will record your CPD and keep relevant evidence of your CPD activities. The IFP is currently working on bringing a suite of CPD that enables you to meet the FSA minimum requirements as well as those of the IFP CPD scheme. Further details will be announced in due course.

RDR Submission Deadlines Just a reminder of two important IFP deadlines coming up. The deadline for submitting your qualifications and gap-fill to IFP for verification is 30 September 2012, and for applying for your SPS is 30 November 2012. We strongly recommend that you meet these dates to ensure you have your SPS in time for 31 December. We cannot guarantee that submissions sent after these deadlines will be dealt with in time. Our current turnaround times are 10 working days for verification and five working days for issuing SPSs.

Fellowship Training The IFP is running a two day workshop on 22 and 23 October to help candidates prepare for the Fellowship exams to be held in November. Day 1 of the workshop covers Personal Financial Planning and Day 2 covers Planning for Business Owners. Both days focus on key aspects including practising calculations and exam technique. Candidates can attend either or both days. The workshop costs £400 or £240 for just one day. To book your place, email:

Fast Track gap-Fill October and November

Source: Copyright ©2011, Financial Planning Standards Board Ltd. All rights reserved. Rev 1101-3

The final two fast-track gap-fill events for CFPCM professionals and Fellows will be held on 9 & 10 October in London and 6 & 7 November in Doncaster. These events will be the final ones to be held before the RDR deadline are there are only a few places left. For full details and bookings see the IFP website www. | October 2012 | 13

Professional Development Exam news

Multiple online methods to fulfil CPD

Interested in sharing your expertise? It is good to report that the number of candidates attempting the CFPCM qualification is growing. Recently two candidates passed on their first attempt. Some candidates run out of time and do not complete the assessment but a sizeable number still repeatedly fail their final submission. These candidates would benefit from the guidance of an experienced planner who can mentor them through the Financial Planning process. Candidates must write their own plan without assistance but some mentor support with understanding the standards could make all the difference. If you can help, please contact FPSB UK at qualification@

With a busy schedule, taking time out to attend seminars and conferences to fulfil your CPD requirements can be a challenge. Online learning is a flexible alternative, allowing you to carry it out when you like, fitting in with the time you have available. There are a wide variety of online learning activities available to members via the IFP with both structured and unstructured activities, from live

webinars to videos, downloadable documents, interactive e-learning and online questions. There is also a wide range of subject matter to choose from, including technical subjects and skills development. Some services are free on registration but a subscription is payable to access others. Technical Connection’s Techlink is an example of a subscription service, which is a great resource for technical knowledge. It contains a vast library

and provides regular bulletins and daily updates. Standard Life Investment’s Learning Gateway is free on registration and contains over 100 interactive modules on a wide variety of subjects. Another useful free resource is Prudential’s Professional Development Centre, which contains online courses and testing on some common various gap-fill areas, as well as on industry issues and support for building your business.

IFP Honours & CFPCM CERTIFICATION Passes The following have successfully passed the CFPCM Certification. Well done to all of them. Linda Boynton Rouse Limited

Fintan Lawlor Axa Global Distributors Ltd Joe Savage Alpha Financial Consultants (Somerset) Ltd Toni Fox-Bryant Campbell Fisk and Partners Ltd

Bhavika Desai Flightcentre Moneywise Limited Matthew Rich Alan Seward Financial Services Paul Jeremy Davies Grant Thornton UK LLP

Certificate in Paraplanning pass Debbie Farnworth Sanlam Private Wealth

Range of standards for Financial Planners It is worth taking a look at the range of standards FPSB has developed for Financial Planners. FPSB UK and IFP adopt these as far as possible in developing training, assessments, CPD requirements and practice standards. In particular, the Financial Planner Competency Profile is the basis of the case study assessment for CFPCM certification. These can be found at

Fellowship Examinations The Fellowship Examinations are taking place in Bristol on 21-22 November. The closing date for entry is 28 September. If you want to enter and sign up for the training days, contact qualification@financialplanning. as soon as possible.

Talking Training Would a mentor help you attempt Certified Financial PlannerCM certification?

contact, usually via telephone, to check on progress, discuss strategy and help with the implementation.

Since 2010 I’ve been delivering the CFPCM Certification Preparation Training Day for the IFP. This, plus my own 10 year experience in training and development, enables me to help others achieve their goals.

As a mentor I can offer a tried and tested process for being successful. What I cannot do is the case study for you! You still have to put in the time and effort required. It is also important to point out that I do not mark case studies and that the mentoring is not a pre-submission checking service for a guaranteed pass. Having said that, people have found the support invaluable.

CFP certification is very demanding and requires a dedicated and focused 12 week period to complete the case study. It takes energy and time to give the case study the attention needed to pass the rigorous assessment. Attending the two training days gives candidates a thorough understanding of what is required to succeed. However, once candidates receive the case study they are on their own for probably the most demanding assessment they will ever complete. I have therefore started a mentoring program to help candidates during this phase. Firstly we plan 12 weeks’ activity to ensure sufficient time is allocated to each phase of the financial plan. The program offers weekly

Cost is £295 and spaces are limited.

Neil Price CFPCM Neil Price CFPCM Financial Planner Oakleaf Financial Planning To book email or call 07557 784391

Tailored Platform Solution ● ● ●

Integrate a long-established investment management company into your proposition Model portfolios built and managed to your specification via wrap platform Fund selection process incorporates both the passive and active fund universe

Contact T 029 2055 8800 LONDON






JM Finn & Co is a trading name of J. M. Finn & Co. Ltd which is registered in England with number 05772581. Authorised and regulated by the Financial Services Authority. Registered Office: 4 Coleman Street, London EC2R 5TA.

14 | October 2012 |

IFP News - see page 29

Where do you think your clients will go for critical illness protection, if they can’t talk to you? We’ll help keep your clients in your office. Convincing your clients of the importance of critical illness can be difficult, that’s why Zurich’s got everything in place to help you: • Supportive underwriting

• Comprehensive product

with quick turnround


• Access to dedicated experts

• Marketing support with

• Outstanding service

compelling case studies

on large cases

• Online business submission

We’re passionate about protection and would like to help you make the most of the protection market.

NP713889001 (08/12) RRD

Speak to your Zurich consultant on 0500 546 546 or visit

For use by professional financial advisers only. No other person should rely on or act on any information in this advertisement when making an investment decision. This advertisement has not been approved for use with clients. Zurich Assurance Ltd. Registered in England and Wales under company number 02456671. Registered Office: UK Life Centre, Station Road, Swindon, SN1 1EL.

We may record or monitor calls to improve our service.

Working with professional connections is often compared to herding cats. Fortunately we know some pretty big cats. As a financial planner you’ll no doubt appreciate the potential benefits of referrals from professional connections. Developing your contact into a business relationship can be time consuming and difficult. At Thesis we have over 25 years of experience working with lawyers. Our unique understanding of how they work has helped us create Alternative Business Structures that are simple and attractive to the legal market. You can benefit from our experience and enhance your business from professional connections whilst minimising the hassle and frustration.

Visit our stand at the 2012 IFP conference from the 1st to 3rd of October to talk to us about how you can spend less time trying to herd cats and more time doing business with them.

2012 DFM (MPS)

Proud sponsors of the Institute of Financial Planning

Thesis’ personal investment portfolio service has received a Defaqto 5 Star Rating

Shortlisted for the Fund Manager of the Year Awards 2012

Thesis Asset Management plc is authorised and regulated by the Financial Services Authority.

Real Life Case Study

Where there’s a Will

Financial Planner Carl Martin CFPCM helps a family deal with the loss of two relatives and untangles a multitude of problems caused by one member’s poorly drafted Will Case Study Brief Siblings William and Bella came to see me following the death of their father and their older brother, Alan, within six months of each other. Both were married with dependent children. They were worried about their mother, Vera, who was just getting over the death of her husband only to lose her eldest son too. Vera had developed a drinking problem. They required help in making sense of Alan’s Will, his assets and their responsibilities as executors. Alan was an NHS surgeon, never married and with no children. He was not meticulous and he had a lot of policies to get to grips with. Alan’s Will left legacies to the children, family and friends and instructed that all other assets should go to his mother and he wanted the children to benefit following Vera’s death. The Will stated that the NHS Death in Service payment was to go to William and Bella equally. Bella was referred by her father in law, an existing client, following issues with other advisers. Both agreed to utilise me for the financial administration of the estate.

This is a real life case study. Names and some other details have been changed to protect confidentiality

Carl Martin CFPCM Consultant, Carpenter Rees Carl has been a Financial Planner at Carpenter Rees of Manchester for the last two years, having been a technical Paraplanner since 2004. Carl started his advice career with Brewin Dolphin and has progressed to become a Certified Financial PlannerCM Professional and a Chartered Financial Planner. Carl also assists the other consultants with technical work. Carl is a great believer in attaining professional qualifications that can be recognised by other professions and in the holistic advice process offered by his firm.

y first meeting with William and Bella was to gather information about Alan, his finances, the other professionals I would be liaising with and review the Will itself. There were several large files with various documents contained in each and gathering the information on each of these for probate purposes was going to take a long time. Included within this file was paperwork relating to the NHS pension scheme. Alan also had a home worth £400,000 with no mortgage secured against it. The Will was potentially a problem. It quickly became apparent that it was a very poorly drafted Will; put together by a company that churn them out for a very small fee but write themselves in as an executor for a fee of five per cent of the new estate value. On seeing this, I advised William and Bella to see if they could get out of this clause and use a professional solicitor. This would still be expensive but less than five per cent of the estate value. I reminded them to obtain a fee estimate in advance of authorising them to undertake any work. At this stage it appeared to be a simple enough task of gathering the assets and providing a summary to the solicitor with evidence so they could agree the figures to be provided to HMRC. We agreed a fee, signed authority letters and got to work. Three weeks later, we had most of the information and I called Bella to provide an update. She confirmed that they had been able to remove the executor company and asked if I could recommend a good solicitor to them to undertake the probate work; which I did and following an initial discussion they where happy with the fee

estimate. This was good news. A week later I had to report back some bad news. Bella came in to see me. It appeared that Alan had not completed a nomination form for the Death In Service benefit from the NHS scheme. Normally this would not be an issue but as the NHS scheme is not established under discretionary trust law, but under statute instead, any payments made without a completed nomination form (except to a spouse) must form part of the deceased’s estate. The payment from the NHS was for £480,000. As Alan’s other estate assets already exceeded the available Nil Rate Band, this entire amount would be subject to IHT at 40 per cent. We made a petition to the Trustees of the NHS scheme to follow the instructions of the deceased as per his Will – ultimately though; this was rejected due to the scheme rules. The executors decided to also make an attempt at reversing this by writing to the Secretary of Health – again this was rejected. As a final last-ditch attempt, I decided to contact the financial adviser of the deceased to see if any of this was ever discussed. The adviser confirmed that they had discussed it and had a copy of the completed nomination form and acknowledgment of receipt from the NHS and was more than happy to send the executors a copy. Upon presenting this to the NHS, they conceded to pay out the sum as per the copy form – although they confirmed that this was not usually the case as they insist on the presentation of the original form. With details of Alan’s estate gathered together I scheduled a meeting with the executors to present the details, hand back any original documents and

settle the agreed fee. During the discussion that followed, it became apparent that both William and Bella were concerned about Vera’s deteriorating health and the fact that she inherited most of the estate from Alan. Also, they were unsure what was best for the £240,000 each they were about to inherit. The whole family’s next financial step needed to be clarified. I confirmed that I would be more than happy to advise them all, either together or individually if they preferred, in order to help them meet their financial goals. It was agreed the first step would be to finalise Alan’s estate and then to schedule a meeting to handle their financial plan. Unfortunately, as should be expected when dealing with HMRC, a review was carried out on the estate of Alan. HMRC argued that as the NHS Death In Service payment was not made to a spouse, it was subject to IHT as it was paid into the estate. The executors argued that the trustees of the NHS scheme agreed it was not to form part of the estate and that is why they drafted a cheque payable to them personally rather than the executors of Alan’s estate. The trustees decided not to volunteer any information and just answer the questions they were directly asked in writing. As this point is still in contention, I advised William and Bella that they should keep the funds safe until a conclusion is reached and then we would look to discuss their personal next step which was advising Vera. Vera, prior to the inheritance from her son, had a total estate estimated at £1 million. Vera felt she had just the right amount of Continued on page 18 | October 2012 | 17

Real Life Case Study income to support her lifestyle and drew down on the capital for holidays and other luxury expenses. Vera’s estate benefitted from a total Nil Rate Band of £650,000 following the death of her husband, which resulted in her inheriting the whole of his estate. From Alan’s estate she inherited his home, which was valued at £400,000, and £100,000 of cash. Right at the start of our meeting, Vera confirmed to me that she wished to follow the spirit of Alan’s Will (that is that she could benefit from the assets but that they were ultimately to go to her grandchildren – of which there were four aging from one year old to 17 years old). We proceeded to talk about Trusts and how they could work in this situation. How they could protect the assets for the benefit of the children and even benefit any future grandchildren. I highlighted how the Trust could help stop the loss of assets on death or divorce. Most importantly though, as long as one particular type of trust was not used, the decision over when the children benefit from the trust is entirely in the hand of the trustees, people who Vera could choose. I then proceeded to highlight the benefits behind undertaking a Deed of Variation to change Alan’s Will to pass the assets into the Trust, thereby not utilising any of Vera’s Nil Rate Band for IHT purposes. Under this route, it would be possible to establish an ‘Immediate Post Death Interest In Possession’ Trust. Vera herself could be nominated as the ‘Life Tenant’ and reserve the right to draw upon any income produced by the Trust during her lifetime. The grandchildren would then be

listed as the ‘Remaindermen’ who only benefit at the discretion of the Trustees and only after the Life Tenant has died. I explained that this type of Trust would benefit from the advantages of the Discretionary Trusts (that is ability to accumulate income, trustees discretion over distributions to the remaindermen) but should not be subject to the high income and capital gains tax treatment of discretionary trusts (as the Trust pays at the basic rates and the beneficiaries pay the additional or reclaim under self assessment using HMRC R185 forms). The Trust should also be able to avoid paying and IHT under the relevant property regime as the entry tax charge is nil due to the

fact that it was set up post-death. We went on to discuss the disadvantages of using Trusts and the responsibilities of the Trustees throughout the life of the Trust. Also, the issues relating to holding a residential property in the Trust, the need to get this rented out in order to be seen to be obtaining a return for the beneficiaries, and the costs involved in running a rental property. I also highlighted the need to engage the services of a suitably qualified and experienced accountant to look after the tax payable by the trust. I went on to recommend they use the same solicitor to draft the trust deed and the Deed of Variation to Alan’s Will.

What happened next I saw the solicitor with Vera, William and Bella and presented our findings. The solicitor agreed that the proposal would suit everyone’s goals. Further to my private discussion with the solicitor beforehand, specific checks were made to ensure there was no undue pressure being put on Vera and that she was competent bearing in mind her current alcoholism. William and Bella signed up to be Trustees and the property and cash from Alan’s estate was settled successfully. While there we also arranged for the solicitor to draft up new Wills for everyone. We have also begun to speak of other ways of reducing Vera’s IHT bill but still generate the income she requires; and we have outlined a debt reduction and investment strategy for both William and Bella. From a Financial Planning perspective, it is very rewarding when you can engage with a family and doubly rewarding when you can successfully engage with other professionals who value your input. Key Points


Make sure clients are using professional firms.


Writing a Will is crucial. Dying without one can cause major problems.


The use of Trusts can prevent loss of assets on death or divorce.

Tax Planning Specialists Through our strategic partnerships, Professional Advice Bureau specialise in tax planning, specifically providing tax saving strategies and products. We specialise in reducing tax liabilities in the following areas: ●

Income Tax

Corporation Tax

Inheritance Tax

Stamp Duty Land Tax

Capital Gains Tax

As sponsors of the IFP we can help you to reduce the tax liabilities of your clients and increase your revenue streams. Contact us for more information. Come and see us at the conference in October, stand number 34, to find out more and have a go in our F1 Ferrari simulator. Please quote ‘PAB Financial Planner Oct 12’ in your correspondence.

t. 0871 208 8001

18 | October 2012 |



Advertising Feature

The biggest question about the Big Bubble The bull market in bonds may conceal hidden dangers and planners need to maintain their vigilance to ensure they do not expose clients to too much risk, says 7IM’s Justin Urquhart Stewart t’s not so much if, as when. We all know that the yields on certain nations’ sovereign bonds have dwindled down to record levels as the bull market in bonds has charged on apace to levels that even the bond market maestros think are unsustainable. We don’t have to go too far back to remember the phrase from Bill Gross, the CEO of Pimco the largest and most successful bond manager in the world, when he so graphically described UK government gilts as “lying on a bed of nitro-glycerine.” Only a year after that colourful phrase, he followed that up with some other colloquial terms to describe US Treasuries, and backed that up by selling his holdings accordingly. However, despite such earnest and serious warning, the yields on both these bond sets have continued to fall. Then, just to add the proverbial cherry to the already over-decorated cake, we have even seen some German Bund rates turning negative, such that investors appeared now to be willing to pay for the privilege of holding German ‘safe haven debt’. Year after year I am sure that we may all have had the discussions as to just how low could they go, as the records continued to be broken. The UK saw its cheapest cost of funding since Gilts were first issued back in 1694 to pay for our Dutch King William’s war against Louis XIV, and while we may not be actively contemplating a similar event, we need to consider not only that they may fall even further, but what may occur when the trend starts to reverse? In effect, what we have seen is a complete reversal of all that we have known in our investment training: UK government debt was always seen as a ‘no risk yield’, where we are now, it can be seen as a ‘no yield risk’. Thus many more cautious and defensive portfolios with significant holdings of Gilts and Treasuries may in fact be sitting not on a defensive portfolio, but rather a ‘ticking’ range of investments which may go off at any time. Just to add to the piquancy of the situation, perhaps we should also consider

UK 10yr benchmark yield

Source: Datastream that they might go even lower? After all, Japan’s yields are half of the current UK levels. For the past few years, heavily weighted Gilt portfolios have performed admirably, but for all the wrong reasons. The question should now be therefore “so just what should a defensive portfolio look like?” The answer to that will lie in the quality of other assets and especially corporate bonds, as well as equities, but it is going to fundamentally challenge some of the standard structures such as those relying upon their older stochastic modelling tools.

These rates are not just an aberration, but rather reflect quite clearly the state of mind of many institutional investors and that is one of fear and a lack of confidence. Until that changes, then we will stay in these exceptional times, but please have care here. These are exceptional times, although they may drag on for some time, and thus we all need to be aware that any hint of a change in fortune could lead to a sudden reversal of value and all those ‘defensive and cautious’ portfolios for those who cannot afford to lose any significant value in their assets, could look extremely exposed. So bubble or not, is not really the argument. The key issue is to maintain a rigorous asset allocation discipline and to be prepared to act swiftly to protect value.

So when will this change? There are probably three areas that we should be watching to give us some clues: When we start to see some more sustainable growth in the economies with some indications of demand and possible price pressure leading to seeds of future inflation Confidence. When the consumer, business and governments start to rebuild confidence and lose some fears. We need to watch for a change in the trend lines of the confidence and purchasing managers’ indicators which are often a very good forward signal. But beware – the markets will always try to anticipate, and so movements could be both swift and vicious. Better value. To state the stunningly obvious, in that investors will sell out of an asset class once they can find better value elsewhere.

Justin Urquhart STewart Co-Founder and Marketing Director Seven Investment Management

Company Profile Seven Investment Management (7IM) offers a unique combination of services to Financial Planners who wish to delegate investment management while keeping full control of the client relationship. 7IM provides an Investment Management Service delivered via our team of Relationship Managers, together with a range of multi-manager OEIC funds and a wrap platform to allow you to oversee all your clients’ investments. For further information on 7IM or any of our funds please contact us on 020 7760 8777 or; | October 2012 | 19

Investment Survey

Avoiding the investment abyss

The economy may be in the doldrums but has the Olympics managed to boost our fortunes? Sally Hamilton reports on investment sentiment and expert views on the future direction of key markets. ith a weak UK economy and the eurozone crisis rattling nerves and unsettling the stock market, what lies in store over the next 12 months for Financial Planners looking to build or protect the portfolios of their clients? “Oblivion”, “The Apocalypse” and even “World War Z”, apparently. Fortunately, such catastrophic scenarios are due to played out only on cinema screens over the next year as all three are titles of blockbusters planned for release in

2013. Even though the plot lines may provide an exaggerated reflection of current global anxiety, the road ahead will certainly remain bumpy for investors, according to Financial Planners and fund managers. The Organisation for Economic Co-operation and Development recently forecast that the UK economy, despite hopes for a positive Olympic Games effect, will likely contract in 2012 as the eurozone crisis and weak domestic demand continue to restrict growth.

Key Points


Equities, which are looking quite cheap, are the place to be in the coming months for investors willing to ride the volatility. But many will turn to equity income funds as a compromise, enjoying dividend yields that outpace savings rates either as income or reinvesting them in the hope of building their capital.


Government bonds are looking unappealing while strategic bonds funds are tipped as a better bet. Cash will continue on its lacklustre course but investors should think about keeping a cash reserve so they can grab better investment opportunities as they arise.

20 | October 2012 |


Multi-asset funds will play a significant role as smaller investors in particular and their advisers look to spread their investment risk across assets.

All this creates uncertainty as to where to invest client portfolios and, according to some opinion, has prompted some into making “irrational” choices. Simon Ellis, managing director of Legal & General Investments, believes the Olympics is likely to have a net zero effect on the UK economy and that the economic and political games in Europe will have more of an impact. He said: “Investors are in thrall to the eurozone crisis. Many are behaving irrationally, giving money to governments, which will guarantee them a loss.” Julian Chillingworth, chief investment officer of Rathbone Unit Trust Management, is also wary of government bonds, including gilts. He said: “Sovereign bonds are producing miniscule returns. Investors are buying them for a return of their capital rather than for a return on their capital.” Both he and Mr Ellis suggest better returns will be found from equity income or high yield corporate bonds. He said: “The high yield market is less subject to the gyration risk that is the interest rate risk faced by government bonds. They are attractive because corporate balance sheets are still strong. The problem is their popularity means there is not a lot of value at the moment in

Investment Survey Key indices From 03/09/2007 To 03/09/2012

15000.00 14000.00 13000.00 12000.00 11000.00 10000.00 9000.00 8000.00 7000.00 6000.00 5000.00 4000.00 3000.00 2000.00 1000.00 Q4

Q1 2008




Q1 2009




Q1 2010




Q1 2011



FTSE 100 PR GBP (NX) FC -8.82%

DJ Industrial Average PR USD (NX) FC -2.66%


FTSE Gilts All Stocks TR GBP (NX) FC 49.98%


Q1 2012



Source: © 2012 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied, distributed or combined with other 3rd party data without prior written consent; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

high-end corporate bonds. Strategic bond funds are an option as managers can move investments around more whereas corporate bond funds are constrained.” Danny Cox CFPCM, head of advice at Hargreaves Lansdown, also favours strategic bond funds for their freedom to adapt the portfolios’ exposure. He said: “If there is more quantitative easing then gilt prices will go up and yields down and gilts and bonds will be hit. The place to be if bonds are what you want is in a strategic bond fund. I like Jupiter Strategic, M&G Strategic Corporate Bond and M&G Optimal Income.” Dividend paying shares are also becoming increasingly attractive not only for income seekers but also with growth hunters who are prepared to re-invest the dividends. Frances Hudson, Global Thematic Strategist at Standard Life Investments, sees good value in these stocks. She said: “There are positive signs in non-financial companies who have their houses in good order, with balance sheets solid. The economic landscape has discouraged many from investing so they have plenty of cash. Rather than investing, companies are returning the cash to shareholders, leaving them to make their own decisions about what to do with the money.” Mr Cox said the advantages were clear: “With dividend yields of four and five per cent you are seeing better returns than in cash and if you

shelter them in an Isa there will be no further tax to pay. With dividend paying shares, if you are happy to accept the volatility you can reinvest the dividends for growth.” Patrick Connolly CFPCM at Financial Planners Bristol-based AWD Chase de Vere, warns against over exposure to the UK equity income funds, however. He said: “There is a perception that UK funds are safer because they are made up of large blue chip firms offering consistent dividends but the potential risk is that people will plough into these funds and find they are over exposed to just a few companies.” Lee Robertson, chief executive of wealth manager Investment Quorum, recommended spreading the risk by considering global income funds. He said: “There’s been a widely held belief that only British firms pay dividends but global companies also pay, especially those who have been stockpiling cash. We feel the total return model is returning.” Despite current volatility, equities in general are the place to seek growth because, as Mr Connolly said, “UK, European and US shares are pretty cheap.” As always, and particularly when clients are nervous, as they are now, then the best approach is to diversify with cash, equities, fixed interest and property, said Mr Connolly. There are mixed feelings on cash, however because of stubbornly lacklustre rates. However,

Ms Hudson said: “It can be worth a look if you can find something offering a real return, such as a one-year bond. But I would stay light on cash.” Mr Cox believes it is the place for clients who want to take no risk. He said: “They will protect their capital even if the return is little and they are then in a good place to act quickly if other opportunities arise.” Mr Robertson prefers to avoid cash because “we think it’s going backwards.” Diversification is unsurprisingly a key defensive message, with multi-asset funds likely to feature widely in the coming months but purchases will also be driven by time-pressured planners postRDR as well as by cautious investor wanting to spread their money across assets Ms Hudson said: “Multi-asset funds give you the freedom to be agnostic about where you get your returns from - you’re not tied to a benchmark.” Mr Connolly said: “There is the cynical argument that many advisers are trying to protect trail commission after 2012 as investors are unlikely to move out of a multi-asset funds. Even if a particular market or asset is hit they will stay in whereas if they had an individual fund in the problem area they might sell out.” Mr Ellis suggested the use of these funds is more of a business decision for a planner than an Continued on page 22 | October 2012 | 21

Investment Survey investment decision. He said: “They will appeal to those don’t have time to micro-manage investment decisions.” However, Mr Ellis urged caution using Mark Twain’s words of investment wisdom: “Put all your eggs in one basket: but watch that basket”. The golden days of commodities over the last few years produced great returns for many investors. And Mr Connolly suggested the recent falls in the value of certain commodities may provide a buying opportunity in this sector. But he warned: “They remain high risk. We don’t generally give clients direct exposure to commodities because exposure to the FTSE 100 also gives you a large exposure to commodities and energy.” Mr Ellis believes, “the easy money has been made” in this sector. He suggested the growth opportunities will be in alternative energy and clean technology. He said: “This is an undervalued area just now.” Both Mr Robertson and Ms Hudson point to agriculture as the commodity area with investment potential because global food demand is rising so sharply. With the US presidential election looming in November, eyes are on the potential investment opportunities the US might offer. Mr Chillingworth said: “We’re sanguine about the US. It’s a better place (for an investor) than Europe but it’s hard to tell what will happen in response to the election.” US economic confidence is particularly jittery due to the coming “fiscal cliff”, when at the end of 2012 the country’s lawmakers need to decide whether to implement policies which will increase spending cuts and raise taxes - or apply a compromise, which has not yet been achieved. Mr Robertson is cautiously optimistic about opportunities across the pond, however. He said: “The US is showing signs of recovery. The general economic figures such as employment are looking better.” Ms Hudson also feels more positive but believes the forthcoming election offers no real clue on timing for investors. She said: “In normal times there would be a market bounce after the election but this time it seems like the election itself is just another hurdle as the economic situation not only depends on who wins but on Congress making decisions (about the fiscal cliff).” Meanwhile, America’s great rival China will remain a high profile investment destination, Mr Robertson believes. He said: “Growth may have slowed to seven per cent in China but in the UK we would be happy with 0.7 per cent. And it’s not just about China, it’s the frontier markets including Malaysia that will offer opportunities.” With the current volatility, what prospects are there for trackers and ETFs, which are taking a greater hold in the planner world? Ms Hudson said: “With trackers investors are not missing out right now but they will miss out if the market rises.” Mr Robertson said there was a place for both active and passive. He said: “We blend active and passive. We get bored with the “one or the other” debate. There are managers who outperform so when the market goes down you don’t just want to just take the index down.” Mr Cox is less keen on trackers. He said: “You are just getting beta (returns) less fees.” However, he suggests they can suit investors in the US market, which he said is a more efficient

market where “active funds find it harder to outperform”. Mr Connolly warns investors to be wary of the perception that trackers, because they are relatively cheap, are also lower risk. He said: “That’s not the case. One-third of the companies in the FTSE 100 are in commodities and energy, some of which have come down sharply in recent months.” Planners are likely to see their clients’ investments remain volatile over the next 12 months. While “oblivion” will hopefully remain the domain of Hollywood scriptwriters, some disruption seems inevitable. Mr Ellis said: “There is a risk of implosion in

the eurozone as the true rot within the European banking system has still to be revealed.” Ms Hudson’s fears are more muted but she points out that markets over the next 12 months are at the mercy of external forces. She said: “There will be bumps along the road, especially as markets respond to the macro and political factors in the eurozone. “At the moment you can’t just look at a company’s accounts or the fundamentals as politicians aren’t driven by profit maximisation. Their motives are their own, such as trying to get re-elected or in dealing with an immediate crisis.”

Sally Hamilton Financial Journalist

22 | October 2012 |

Sally Hamilton is a freelance financial journalist specialising in many subject areas including investment and pensions. She writes for publications including the Mail on Sunday, the Guardian/ Observer, Moneywise magazine and She was previously personal finance editor of the Daily Express and senior personal finance correspondent of the Mail on Sunday and is author of the book ‘Money: your children, their future’, published by Simon and Schuster.

Advertising Feature

The changing world of pensions and advice Christine Hallett, CEO of Carey Pensions UK, discusses what Financial Planners, advisers and product providers need to do and how they need to get in tune with the changing world of pensions advice. She explains why this is needed to satisfy the needs of individual and corporate clients and to understand the opportunities and the spin offs that truly delivering independent advice can bring. o much time has been devoured in the preparation for the world of RDR and meeting the requirements by the required time deadline, but what about beyond that date and ensuring that the adviser’s business model that has been built is sustainable and clearly adds value and ekes out each and every opportunity that there will be for those advisers. Advisers will be competing head on with large institutional brands such as the insurance companies who some have already showed their hand in setting up direct sales teams that will go into direct competition with that very group of people who have provided them with the business for as long as we can remember. So the new age adviser needs to unhook their old allegiances and ally themselves with good quality providers who provide specialist services and build bespoke solutions for their clients whether they are individuals or corporates. It is the adviser who will orchestrate the symphony bringing in the different instruments to create the sound they want and that is desirable to their clients. This is how they will add value and earn their fees, in the world beyond RDR. Let’s create the right sound for the new era, and build the band that will deliver that sound to the right tempo. In the world of pensions what does that mean? What does an adviser really need from a product provider and how will they find the right partners to deliver. Those that have been in the pensions industry for many years will remember preparing pitches for business, because clients and advisers looked beyond prices and commissions they considered a number of core requirements, and they would choose the partner that could best deliver the full solution, to the standards required. Pensions administrators ensure that the rules and regulations are met and ensure the transactions

are processed efficiently and courteously, providing specific and dedicated servicing to a client with a name, by an administrator who also has a name, not a call centre operative working from a script. Real people help real people, support real people, care about what they provide and trust them with their assets that mean a lot to them, that they have worked all their lives toward providing for their retirement. Key Criteria to consider when choosing a Pensions partner Do they provide a product or a solution? Do they have in house technical support? Are they financially robust, are they satisfying the required levels of capital? What ratio of clients per administrator is there? What technology do they have, are they planning? What is their culture? Can you speak with Senior people as well as administrators? Are they prepared to work with you to ensure success? Transparency of fees and of process Value for Money Can they work with your other chosen professional partners? How flexible are they? Opportunities that stem from individual arrangements, may lead to corporate work, if advisers deal with Directors of companies. That company will then need, in the coming years, to auto enrol their staff into a pension scheme - maybe before the new world, the choice would have been which insured product, but the choice is endless by unbundling the component parts and delivering an added value solution. What about the other partners of the company, considering SSAS as a business expansion tool? If looking after a company pension scheme it may

need to be reviewed, an opportunity exists to review, rebuild and offer something unique for the senior people with the view to taking them on as individual clients. One relationship will always lead to another relationship if you really seek out these opportunities. Also look beyond the UK. Offshore capability and opportunity for UK clients should not be overlooked. It is not that frightening, but would be impressive to a client to show that it is an area that has been considered and determined whether appropriate or not as part as the overall retirement solution. The world as we know it is changing; and how exciting is it? Very - most advisers have obtained high levels of qualifications to accommodate the brave new world, so we want to see and work with the new brave-hearts and build the empire more strongly by adding value every step of the way and the best way of doing that is through co-operation, relationships and building solutions that are right for the clients. .. Not selling products!

Christine Hallett CEO, Carey Pensions UK

About Carey Pensions UK Carey Pensions UK is part of Carey Group, a long established pensions administration and trustee company, who administer pension arrangements for over 10,000 members across a range of different pension schemes. Carey Pensions UK is led by Christine Hallett with a growing team which currently has 20 administrators in its base in Milton Keynes. Christine has been in the pensions industry for over 25 years providing administration and trustee services. Carey Pensions UK provides a range of pensions for individuals and corporates from Self Invested Personal Pensions, Small Self Administered Schemes and Workplace Pensions, either via our Master Trust group self invested personal pension or our Master Trust Occupational Defined contribution scheme. Carey Pensions UK is an award winning company that puts client service at the heart of its proposition. If you would like to find out more please contact Christine Hallett on

01908 336010 or email us on | October 2012 | 23

Rebecca Taylor FIFP CFPcm, Dunham Financial

On the Spot: Rebecca Taylor FIFP CFPCM, IFP President Elect Financial Planner interviews the next IFP President Rebecca Taylor from Dunham Financial on how it feels to be chosen for her new role and her plans for the future of the IFP into 2013 Financial Planner: How long have you been involved with the IFP and Financial Planning and when did you first enter the profession? Rebecca Taylor: I first joined the IFP in 2004 so I guess that’s also when I really entered the Financial Planning profession! I started as a bank adviser in 1999 and then worked as an IFA from 2000 to 2004. Joining the IFP fundamentally changed the way I worked and the way Dunham Financial operated.

FP: What inspired you to join the IFP and how do you think the organisation and profession have evolved over the years? RT: Initially it was interest in the Certified Financial Planner certification. At the time I had no idea how much of an impact it would have. I joined at a pivotal time for the IFP, just as it was starting to become more visible so it is a different organisation now, but still with the same core principles. When I joined my perception was that everyone within the IFP was ‘doing’ Financial Planning whereas now there is far more help and encouragement for nonFinancial Planners to join and evolve their way of working and/or their businesses.

FP: When you were elected as Vice President, to become President of the IFP from October, what were your thoughts and what are you most looking forward to achieving during your presidency? RT: To me it is a great honour to be President of the IFP. The decision on who becomes the next IFP President is made by the board of directors so if they have faith in you then we should trust that decision. As to what I am looking forward to most, I think that is a difficult one! There are so many aspects to the role. I am just looking forward to being able to do my bit. The President is in a unique position to be able to reach many people, whether that is advisers or clients, so it is all about furthering the development and awareness of Financial Planning to as many people as possible.

FP: How do you see the role of IFP President and do you plan any changes from your predecessor Marlene Shalton FIFP CFPCM who steps down at the AGM on 1 October? Rebecca Taylor, managing director of Dunham Financial of Cambridgeshire 24 | October 2012 |

RT: The IFP President is someone elected to

Rebecca Taylor FIFP CFPcm, Dunham Financial communicate views and decisions made by the Board. But of course, it is also so much more than that as well. It is the President’s role to be as visible as possible and promote the benefits of being a Certified Financial PlannerCM professional or the services of using one.

FP: The period of your Presidency will encompass the implementation of the Retail Distribution Review? How do you think the RDR will affect Financial Planning and what changes do you believe the profession will see?

on the support that we already have to encourage a holistic Financial Planning approach to consumer finances instead of single product details.

FP: What do you think Marlene and the IFP have achieved since she became President two years ago?

RT: Financial Planning in itself will be largely unchanged as Financial Planners and their way of working sits very well within RDR. There will likely be some changes but a lot of these are likely to be documentation and compliance with the new way of working as opposed to any fundamental change. I am hopeful that we will see more people joining us as Financial Planners as it is one of the easiest ways to demonstrate a service that is being provided is worth paying for!

RT: Financial Planning is one of the most rewarding careers that you can have as you can see the difference that you can make to people’s lives, as well as their children’s futures. To have a client meeting for the first time and see them change from cautious people that are uncertain about the future to confident people enjoying their life is an amazing reward.

RT: Marlene has given a lot of time to the IFP over the past two years. It seems as though there is not an event that goes by where she is not actively involved in some way, either through speaking or being a panel expert. This is of course her own time given freely for the benefit of Financial Planning. Marlene has had some tough decisions to make over the past two years and has handled these well. Of course the main achievement and what her President’s term will be remembered for is all the hard work in the lead up to RDR. RDR may be implemented in my term as President but all the preparation has already been done.

FP: What do you see as the main challenges facing the IFP and the profession as a whole? RT: Our main challenge has been consumer education and I suspect that this will continue for a significant time. There is so much mistrust in the financial world. To improve trust will take hard work from a lot of parties, as the financial world includes the banks, insurance companies, advisers and IFAs as well as Financial Planners. While this will be a long and hard process, we can work on our own area to get the message out there that there are a lot of honest people in our profession that can make a significant difference to people’s lives. We have already started work on this with the Accredited Financial Planning Firms which are robustly tested for their business practice. This gives us a trusted message to send out to the public and the wider world generally about the quality of these firms. The Question of Trust campaign founded by Shane Mullins and Nick Cann is a fantastic idea and I am looking forward to helping in any way I can as President of the IFP.

FP: The IFP’s Financial Planning Week is coming up at the end of November. Do you think advisers will be able to support it as it is so close to the deadline for RDR preparation? RT: I don’t think it will make any difference. The majority of supporters for Financial Planning Week are already compliant with RDR, or just making small tweaks, so I would be surprised if we do not get advisers supporting Financial Planning Week this year because of this. It’s a great initiative which we all benefit from.

FP: Financial Planning remains one of the UK’s ‘best kept secrets’ – how can that be changed in future and what can the IFP and planners do to improve access to Financial Planning advice? Is there a government role too? RT: This is what Financial Planning Week is all about, educating the public on basic Financial Planning so they have the tools and knowledge to start things themselves and then come to a planner for help when there are more complex areas. Journalists have a huge influence so we will continue to build

FP: What are the three best benefits that Financial Planning offers to consumers? RT: Peace of mind x 3! You can break it down; offer investment returns, reduced tax bills and so on but it always comes down to the confidence you can give to someone for their future.

FP: How will you juggle your day job with your IFP Presidency commitments? RT: I am very fortunate in my day job that I have a support team in the office who can keep things running without my input. It pains me to say it but I’m not convinced that I am needed except for my client face-to-face meetings and the odd client discussion. The IFP has a dedicated team that has strengthened considerably since the time I have been involved so have no doubt I will be supported well throughout.

FP: Away from work, how do you like to relax? RT: I have lots to keep me occupied outside of work. My partner and I both cycle so we spend a lot of time out on our bikes and generally keeping active. I also have horses which I love to be around, they are my therapeutic time.

Rebecca Taylor FIFP CFPCM Dunham Financial Rebecca ‘Becky’ Taylor is managing director of Dunham Financial Services based in Peterborough. The company works with both individuals and companies creating long term Financial Plans. As a CFP professional and Fellow of the Institute of Financial Planning, Becky is a strong believer in the six-stage Financial Planning process.

FP: What will your priorities be over the next year as President and what do you hope to achieve overall during your two year Presidency? RT: We have touched on some of this above but we mostly need to get the message out to people about Financial Planning and the professionalism of the people in our profession. We have Financial Planning Week, The Question of Trust campaign, Accredited Financial Planning Firms and of course the Certified Financial PlannerCM certification. All of these areas combined give us a great message to take out there to consumers and the UK generally. Behind the scenes we will still be supporting individuals and companies the way the IFP always has done. The focus will no longer be on minimum qualifications as these will already be completed, but there will always be support required for those wanting to make changes to their business.

FP: What do you enjoy most about being a Financial Planner yourself?

She is the sole client facing Financial Planner at Dunham Financial supported by a team of Paraplanners and client support staff. She is also on the IFP Board of Directors of the Institute of Financial Planning and due to take over as President of the IFP in October 2012. 01733 345525 @IFP_Becky Key Points


Public education is needed. There is so much mistrust in the financial services world that consumers need reminding that there are honest people who can make a difference to their lives.


Financial Planning support and promotion is vital. This is where Financial Planning Week will create awareness by educating consumers and promoting the benefits of Financial Planning to them.


The team at Whitefriars and the IFP Board are there to help members, whether through helping advisers advance to CFP certification or recognising firms as an Accredited Financial Planning FirmTM. | October 2012 | 25

BUILDING YOUR BUSINESS IS OUR FIRST PRIORITY ...and our second and our third

7IM: committed to delivering all the tools financial intermediaries need – under one roof With our unique combination of a discretionary investment management service, multi-asset funds and an award-winning platform providing 24/7 access to portfolios, we provide all the tools you need to offer clients a complete service, and help them achieve the best possible long-term results.

For more information visit or call 020 7760 8777 Seven Investment Management Limited is authorised and regulated by the Financial Services Authority.  Member of the London Stock Exchange.

Technical Update: expat planning

FINANCIAL PLANNER | October 2012 | Issue 62

Contents | Page 27 Introduction | Page 27-28 Tim Thornton-Jones from Berkeley Law looks at why planners should review the affairs of clients looking to move abroad and how being resident in another country is getting more complex.

Report on emigration highlights possible IHT problem n this edition of Technical Update we look at the implications of emigrating overseas on taxation and assets. Tim Thornton-Jones from Berkeley Law is a specialist in private client tax planning and has built up a significant practice advising the expat community of Monaco. The article explores the long-term financial implications and what could go wrong that people should consider before making the move. While they may expect to have language barriers or to feel homesick, they may not expect financial

hurdles caused by complicated jurisdiction rulings. What works in the UK may no longer work in a foreign jurisdiction. Particularly important are the rules on IHT, particularly for retirees who are emigrating, in the event that one dies while abroad. Contrary to popular opinion, IHT is dependent on domicile rather than residence meaning that IHT is payable on all worldwide assets, potentially causing a hefty bill for any family back in the UK. There is an option to change your domicile of origin but you will have to prove to HMRC that you

have no material ties to the UK, a difficult process which is often unsuccessful if challenged in court. Further problems occur surrounding Wills, heirship rules and taxation treaties between countries. All these scenarios create a wealth of opportunities for Financial Planners to prove their worth before clients make the big move. The Technical Update section welcomes your submissions or suggested topics. Email Financial Planner editor Kevin O’Donnell at

Financial Planners urged to remind expats of changes to their financial situation before they leave the UK According to Government statistics, almost 3.5 million Britons live abroad – equivalent to over seven per cent of the population. Apparently, only Mexico has more expatriates. In terms of long term international migration, Australia is the top destination, followed by Spain, the USA, France, Germany, New Zealand, the UAE and Canada. Monaco alone is home to 3,500 British expats. People emigrate for a myriad of reasons; their work may demand it, they may be lured by sunnier climes, a less taxing commute, a better work life balance and so on. More and more clients and potential clients of Financial Planners are retiring abroad, choosing to spend their retirement years in a country where the cost of living is cheaper, the standard of living is better and where the weather is sunnier. Entrepreneurs and business owners in particular often opt to move to a taxfree jurisdiction prior to selling their businesses, in order to escape UK Capital Gains Tax and Income Tax on their future income. These people will often have family still residing in the UK – children and grandchildren – and they may well continue to own assets in the UK. The destinations of choice for this group of expats are France, Spain or Monaco. Clients who move abroad to work may not already own substantial assets in the UK, usually having offloaded properties prior to moving. These may be more focused on accumulating wealth, often in a tax-free jurisdiction, before ultimately returning to the UK or emigrating for good. One of the key issues for people leaving Britain is that they often focus too heavily on improving their standard of living and the effect of taxation during their lifetime, but fail to consider the full impact on their finances, particularly the situation arising on death. Financial Planners can assist in these situations, helping expat clients to avoid

Australia is a popular choice for expats but may cause problems with its different rulings landing their families with an unexpectedly hefty Inheritance Tax (IHT) bill as well as planning for other unforeseen situations. Whereas Income Tax and Capital Gains Tax is based on residence, IHT is based on domicile. Expat clients may assume they are not liable to UK IHT because they are no longer UK resident and many are surprised to discover that this is unlikely to be the case. Domicile is a legal term – meaning you ‘belong’

to a certain country – often the place you regard as your homeland. Your country of domicile is normally the same as your nationality, irrespective of residency. Everyone is born with a domicile of origin, which will be taken from your father. To become domiciled in the country in which they reside, individuals need to prove to HMRC that they no longer have material connections with the UK, and that they are a permanent resident in Continued on page 28 | October 2012 | 27

Technical Update: expat planning that other country. Recent case law in the UK has demonstrated that it is very difficult to shed one’s domicile of origin and replace it with a domicile of choice. If your clients remain UK domiciled, then UK IHT is payable on all their worldwide assets including, for example, their retirement home in Monaco. Even if they are no longer UK domiciled, IHT will still be due on any assets situated within the UK. Successful Estate Planning for expat clients will need to take account of the IHT (or equivalent death taxes) in both the UK and the country in which the client resides. Unlike the UK, where for the most part, assets can be freely disposed of by Will, in other countries, the story can be quite different. Forced heirship rules are statutory in a number of countries, such as France, and they determine the proportion of a deceased’s estate that has to pass to various members of the family. The Gallic approach favours a higher proportion of the estate being left to children, with only a small proportion passing to a surviving spouse. For a widow, this could be a catastrophic turn of events, particularly if there was any familial disharmony. For example, the deceased may have had children with a first wife and the relationship with the step mother may well be strained or even non-existent. In this case, it would be very difficult for the widow to appeal to the better nature of her husband’s offspring and this in turn could jeopardise her lifestyle. The amount of IHT or equivalent death taxes in countries that have forced heirship often depends on the degree of relationship between the deceased and the beneficiary. There are moves afoot to enable EU citizens to be able to elect to apply the law of their nationality to disposals of their assets by Will, but it is unlikely that this will be in force for several years. It is, therefore, absolutely essential when advising expats to consider their ability to dispose of their assets freely by Will and the likely tax consequences. This may well lead to a review of the manner in which foreign assets are held, for example, via a company rather than direct ownership, or via an insurance policy. Account also needs to be taken of any Double Taxation Treaties that exist between the UK and the country in which an expat client resides. In most cases, there is a set-off between any local death taxes and UK IHT (that is, one ends up paying overall the higher rate of tax, but the asset is not taxed twice). However, to assist a UK-domiciled expat wishing to mitigate UK IHT on their UK situated assets, there are a number of things that can be done. The first is to make full use of the “Surviving Spouse Exemption.” However, this exemption only exists in full, where the surviving spouse is also UK domiciled. As previously stated, even if an expat is successful in shedding their UK domicile, their assets situated in the UK will remain liable to UK IHT. If that expat’s spouse has also become non-UK domiciled, then the Surviving Spouse Exemption will be restricted. If, as frequently happens, the surviving spouse (who was previously UK domiciled) returns to the UK following the death, this immediately revives their UK domicile, leading to UK IHT becoming payable on the worldwide assets of the surviving spouse on his/her subsequent death. Secondly, and only if circumstances allow, use should be made of PETs (Potentially Exempt Transfers). A problem which often occurs in this

Emigrating can be the start of a new life but it is essential to tie up all loose ends before you leave situation for UK residents is that PETs also give rise to a deemed disposal for CGT purposes. This, of course, does not apply to expats provided they remain non-UK resident for at least five tax years after the date of the gift. Lastly, use should be made of other relevant or appropriate IHT reliefs such as Business Property Relief (BPR) or Agricultural Property Relief (APR). BPR gives 100% relief from IHT for investments in unquoted trading companies once those investments have been held for two years. “Unquoted’’, for these purposes, includes companies whose shares are quoted on AIM. The definition of ‘trading’ excludes activities such as property development and investment companies. However, a company that qualifies for BPR can be incorporated anywhere in the World. There are no limits to the amount that may be invested, nor any minimum percentages of share ownership. It is perfectly possible, therefore, for an expat to invest in his, or his family’s, unquoted trading company and claim BPR after two years. APR also gives 100 per cent relief from IHT for the “agricultural value of land and buildings used for agriculture.” The minimum period of ownership is two years in the case of in-hand land, and seven years in the case of let land. Agricultural land and buildings anywhere in the EU, as opposed to worldwide, are capable of qualifying. Rather than investing directly into BPR companies or APR land and buildings, it is possible to invest via a collective investment scheme if that suits the particular circumstances of the client. Whichever way such an investment is made, it is again essential to ensure that what may work from a UK tax perspective also works within the

jurisdiction in which your expat client resides. When clients – particularly those in their retirement – decide to leave the UK in search of a better lifestyle elsewhere, they may be keenly aware that it will not necessarily be an easy path ahead. Many will anticipate administrative and bureaucratic hurdles they’ll have to leap and cultural dissonance they may face. They might fret about language acquisition and the fundamental issue of integrating into a community – they might not want to be dismissed as “les rosbifs.” They know they will be homesick and miss family, friends and neighbours and can mitigate this by using Skype, organising regular trips back and having a steady stream of visitors. But when it comes to their finances, they are less likely to give full consideration to all the issues they face. Hence, as their Financial Planner, it is essential to help such clients to consider the longterm financial implications and what could go wrong if one or other of them die. Early planning is absolutely essential for people thinking of moving abroad and local knowledge is key – ultimately, different rules and regulations in various jurisdictions might influence which country they want to move to. It’s important to ensure that whatever works from a UK perspective also works in the local jurisdiction. And it is vital to keep any planning flexible enough to be altered or adjusted to reflect changes in personal circumstances or taxation. A life in the sun is appealing for many. However, reminding them of the dangers and planning for all eventualities will mean that your clients are less likely to fall into any financial traps and ensure that when setting sail to a new life, there will be calm waters ahead.

Tim Thornton-Jones founding partner, Berkeley Law

28 | October 2012 |

Tim specialises in private client tax planning, mainly for UK domiciled clients, both UK and non-UK resident, land owners, farmers, businessmen, entrepreneurs, sportsmen and entertainers, on heritage property and in the creation of private charities for wealthy philanthropists. Tim has also built a significant practice advising the expat community in Monaco. Tim is a founding partner of Berkeley Law. 0207 399 0930

IFP Member NEWS From the IFP president Reflections on my past two years as President and handing over the baton to Rebecca Taylor This is probably the hardest President’s piece I have had to write; my last one. Trying to sum up in these few words what the last two years has meant for me, the IFP and you, its members. I always knew I would embark on this role with passion, enthusiasm and energy and I doubt anyone could deny I did not fulfil that promise. But I set out with the theme of Education for Advisers and Consumers, to preach the gospel of Financial Planning and the magical if not straightforward six step process. Indeed it has been a journey in both the physical and emotional sense. I have met so many people including members around the UK at numerous branch meetings. It’s been great to connect with those working hard at making the transition from transactional based advice as well as more experienced Financial Planners happy to be reminded of how we should be developing our Financial Planning skills. Outside of the UK, there have been visits to Paris, Dubai, Budapest & Israel, spreading the word even further afield. How heartening it is to be told that people have felt inspired by the presentations. To add further to my mission, I embraced the use of social media, recognising the viral advantages that this type of marketing brings and how much easier it is get your message across to so many people worldwide in a short space of time. It has also meant that Financial Planning can reach the general public and be introduced to those who have been largely ignorant of the concept. Couple this with writing articles for the Press and various trade publications, networking and engaging others in discussions on Financial Planning they have all been part and parcel of this journey. Any opportunity that presented itself was grasped and my mission to promote Financial Planning was very clear. So, has all this activity had its desired effect? I do believe that it is too soon to calculate yet, with the diversion of fulfilling RDR requirements probably being uppermost in many minds. There is however, a sense of moving forward, of gaining momentum and that is something that the IFP can now capitalise on. I know that as Rebecca Taylor FIFP, CFPCM takes over as President, she can use this springboard to help our wonderful organisation - and profession - to develop still further. Thanks to those who have followed my writings and my many tweetings. This may be goodbye as IFP President but I shall still be carrying the flag for Financial Planning, so for now it’s ‘au revoir’ and my very best wishes for success to our incoming President Rebecca Taylor FIFP CFPCM.

Marlene Shalton FIFP, CFPCM IFP President Institute of Financial Planning @PresidentofIFP

IFP News 5 Pages of News for IFP Members | President 29 | IFP News 29 | Branch Reports 30 | Events and Courses 32 | Sponsor News 33

Your invitation to the IFP Annual General Meeting Taking place at 4.30pm by the current IFP President, on Monday 1 October at the Marlene Shalton FIFP, CFPCM. At Beaumaris suite, Celtic Manor the meeting Rebecca Taylor FIFP, Resort, Newport, South Wales, CFPCM will formally take over as is the 2012 Annual General President for a two year period. Meeting for IFP members. She said: “I feel honoured to While it takes place at be taking over as President. conference, all members are The next few years are both a welcome to attend regardless of challenge and an opportunity whether they’re attending the Becky Taylor FIFP CFPCM for the IFP to promote the conference itself or not. It’s your benefits of Financial Planning opportunity to catch up with what’s going on to the general public and the wider adviser at the IFP and also to share in the strategic community.” Members wishing to submit plans for the future. agenda items for the AGM should email Sue IFP staff and a number of the IFP board Whitbread at will be present and the session will be chaired by 24 September.

Putting Financial Planning in the consumer spotlight Financial Planning Week 2012 is the campaign organised by the IFP and its members to raise awareness of Financial Planning directly with consumers. This year the week starts on 26 November. In the recent IFP member survey 59 per cent of respondents felt that this was an important campaign for the IFP to run. Hopefully this year even more members will get involved and support the campaign with activities such as offering free financial surgeries for a limited period,

supporting PR campaigns and writing articles and blogs for the media. eal success happens when consumers are prompted to take action as a result of activities organised during the week. The more that firms engage directly the more likely this is to happen. Sue Whitbread, IFP communications director said: “Member involvement is essential for success. Not only will it help spread the message of what real Financial Planning is all about, but it’s a great way for firms to promote themselves.”

IFP Board Elections 2012 – last chance for IFP members to vote Over the past two months, elections have been taking place for four places available on the IFP Board. Voting closes on 21 September so IFP members are reminded to cast their vote for which four of the six CFPCM professionals standing they feel will best represent their interests. The candidates are Richard Allum CFPCM Paraplan plus Melony Holman CFPCM Compliance and Training Solutions Ltd Ian Howe CFPCM, Baigrie Davies Jason McGuigan CFPCM– Critchleys

Financial Planning Ltd Patrick Murphy FIFP, CFPCM – Zen Wealth LLP Chris Williams CFPCM – Ashcourt Rowan Members have been sent an email by the IFP to enable them to cast their votes. The selected candidates will be announced at the Annual General Meeting of IFP taking place on 1 October at Celtic Manor Resort. If you have not received the email, contact for a new link to be sent to you. | October 2012 | 29

IFP Member NEWS IFP survey feedback The Value of Feedback – IFP Membership Survey In July, the annual online IFP membership survey was carried out. As IFP Communications Director Sue Whitbread reports, the feedback is essential as part of IFP’s strategic planning to deliver the best possible service for members. Firstly, thanks to everyone who provided their feedback. As the professional body representing the Financial Planning profession, this helps us to understand your views, likes and dislikes in order to provide the best possible support to you. One of the key aspects for us was to find out why you are an IFP member. 0ver 90 per cent reported that improving knowledge and Financial Planning skills are strong reasons, as was sharing best practice and accessing Financial Planning qualifications. When it comes to results, 90 per cent of respondents agreed that their membership has helped them to develop their skills, while 87 per cent report increased professionalism and 85 per cent feel part of a professional community. Of all the IFP’s communications, Financial Planner magazine is the most regularly read with a massive 89 per cent reporting that they read it - regularly (72 per cent) or sometimes (17 per cent). The IFP news e-bulletin also proved popular with 86 per cent reporting that they read it regularly or sometimes. Our best practice e-bulletin is also well received. With CPD set to become even more important as RDR takes hold, 35 per cent of respondents say they are using the IFP’s CPD online platform – a real asset particularly if you’re using IFP as your accredited body. If you are not using it, it’s well worth investigating. Networking is a key benefit – both online and face to face. The IFP groups on LinkedIn have gained favour, with 51 per cent of respondents getting involved, although Twitter is less popular with just over 22 per cent using it. Your feedback on branch meetings was very positive, it would be great to see more members using this valuable networking resource. Finally, with the fifth Financial Planning Week coming up, 59 per cent of respondents told us they thought it was important that the IFP runs the consumer awareness campaign. Please start thinking about how you can help this year.

Surrey branch looks at how members can add value to the client relationship At their last meeting before the summer break, the Surrey branch welcomed faces new and old (in terms of a long history of attendance - no comment on their years on earth!), reports branch chairwoman Claire Menni. First up was Nigel Green CFPCM of Buckle Green and Partners, former chairman of the Surrey branch. Nigel gave an enthralled audience an insight into how he and his firm delivers Financial Planning by taking us through, from the start, what we would experience if we were approaching him as a client. For attendees who already use cash flow planning, it was a chance to learn how a well respected Financial Planner (and the most enthusiastic and passionate I know – plus the reason why I took on the branch chair role) actually does what he does. For those new to cashflow planning, it was a fantastic introduction. My key ‘take-away’

Jon Pittham of Clientsfirst from listening to Nigel was how he bridges from the bucket presentation to the capital chart – one sentence which seamlessly joins the planning together and could be the light bulb moment for the client to ‘get it’. For the second half of the meeting, Jon Pittham of Clientsfirst took to the ‘stage’ to help us build (even more) exceptional relationships with clients. As most will know, the foundation

of the client/planner relationship is trust and what is necessary for a fruitful, enjoyable and long lasting relationship. Jon also provided a useful reminder of what clients actually value as opposed to what many of us concentrate on and spend the majority of our time doing. Only two more branch meetings for 2012 remain. The first with Peter Legg on IHT planning is on 25 September and the second a lunchtime soiree with Nick Clay of BNY Mellon (and a nice curry to boot) on 9 November. As this is likely to be my last branch report before I step down from the Surrey post, I would like to thank all the loyal supporters of Surrey branch and hope they continue to attend the meetings when Wesley Harisson CFPCM steps up to provide fresh ideas and, I’m sure, a fantastic programme in 2013.

VCO Global’s John Niland gives Essex branch members ‘The Courage to Ask’ The Essex branch meeting in July welcomed John Niland of VCO Global as its guest speaker. John’s presentation titled ‘The Courage to Ask’ encouraged delegates to think about the key questions they should be asking their clients and perhaps more importantly what are the things that prevent them from asking these questions. RDR and fees were at the top of most delegates’ agendas, with members particularly concerned

around how and when the fee proposition should be positioned. Breaking into groups, delegates discussed these and other concerns, taking turns to explain how they were meeting current challenges. It soon became evident that many of the other issues we had were common ones and that invariably it is all too easy for us to hide behind the growing mountain of information that arrives on our desks. Email, Twitter, LinkedIn and

so on are all forms of what John calls ‘sophisticated procrastination’ and can all too easily distract us from what we should be doing. ‘The Courage to Ask’ was a thought-provoking presentation for all attendees and one which reminded delegates that in the fast changing world of Financial Planning, communicating with our clients is as important as it ever was, perhaps even more so than before, and should be our priority.

Welsh Assembly member tells South Wales of business growth opportunities South Wales welcomed a strong crowd of both members and nonmembers at Brewin Dolphin’s Cardiff office to witness an eclectic and relevant line up of speakers in June. Firstly, Jonathan Raymond of Vestra Wealth, provided a market update. Jonathan Hughes from the Welsh Assembly then covered schemes available to provide support and growth opportunities for businesses in Wales and the funding available.

30 | October 2012 |

Schemes included workplace development programmes and funded apprenticeships and links with Glamorgan University’s new Foundation degree in Finance (Financial Planning) to help attract high calibre new entrants to the profession. Finally, Michelle Hoskin from Standards International shared her operational best practice tips for all Financial Planning firms, to ensure that they are not left behind in the RDR shakeup. All sessions gained

excellent feedback from delegates. Branch member Gemma Davies CFPCM said: “Our next meeting is 13 November, with Martin Vaughan CFPCM of Paragon Paraplanning and IFP member number one Paul Etheridge FIFP, CFPCM. We’re debating the value of having Paraplanners in a Financial Planning business and how to add value to your business. Do come and join us - especially Paraplanners who will be able to witness Martin’s very entertaining and valuable session.”


South West branch members discover power of ‘The Apple Effect’ on clients A good turn-out for the July meeting came to listen to David Scarlett, author of Soul Millionaire, speak about ‘The Apple Effect’ and delivering beyond customers’ expectations, reports branch chairman Pete Matthew CFPCM. We have not had much content on marketing in the last couple of years so it made a refreshing change. David stressed the need to understand why we do what we do, and then to work with clients who appreciate and value the same things we do.

He also impressed on us they had undergone that success post-2013 that afternoon. Needless will involve mastering to say this presented business, and not just no challenge to these the technicalities of our previous winners of the trade or the process of David Norton award but delivering advice. their insight was helpful Former chairman to those of us yet to go Simon Boulter CFPCM through the assessment. and Mo Bowen CFPCM Simon Boulter and All in all, an excellent of BoulterBowen Mo Bowen meeting with great Wealthcare then briefed feedback. Our next us on the details of the FSA’s Business meeting will be held on the 17 Risk awareness assessment, which October – join us then.

Branching out – IFP’s branch chairmen share ideas for upcoming meetings On 13 September, the IFP’s hard working and dedicated branch chairmen met for their annual meeting in Solihull. They discussed with the IFP team including Vice President Rebecca Taylor FIFP, CFPCM, how they will run

their branch in 2013. With the three new chairmen joining longer standing chairmen in January, the schedule for the day focused on helping everyone to deliver the best meetings possible. Chairmen shared their experiences from 2012, identifying their top two

and bottom two sessions to help others decide which sessions to run in 2013. At the end of the meeting, the 2012 branch chairman of the year award winner was announced although the name won’t be publicly announced until the IFP conference.

UnCANNed – Making Fridays Fun Want to receive an email alert each Friday containing the light-hearted blog of IFP chief executive Nick Cann? As you’d expect from Nick it’s a great way to keep up with the latest news but with a good dose of humour thrown in too. Email sue@financialplanning. to subscribe.

Bring a friend to a branch meeting A great way of finding out what the IFP is all about is to turn up to a branch meeting. Or why not ask a colleague to join you? Non-members are welcome at meetings but prior registration is required. Just contact the branch chairman in advance.

Paraplanner of the Year The Paraplanner of the Year award, supported by the IFP and, is open for entries until 24 September. The prize will be presented at the IFP annual conference in October.


The free source for daily Financial Planning News - Financial Planner Online Daily Financial Planning and wealth management news Live Twitter news alerts - go to @ FPM_Online IFP Twitter Feed and stock market charts Free weekly e-newsletter Expert comment, analysis and blogs The best from the magazine Plus IFP members, technical updates and much more Financial Planners can register free to access Financial Planner Online - a unique news and information resource for professional Financial Planners.

Free Daily News Alerts

Go to: @FPM_Onli ne | October 2012 | 31

IFP Event NEWS ifp conference 2012 Inspiring Trust 1-3 October, Celtic Manor, South Wales The theme of this year’s IFP conference and exhibition is ‘Inspiring Trust.’ Trust is an essential element to success and with the new RDR world imminent; there’s never been a more important time to attend the IFP annual conference. Join us in October when the conference will focus on how you can differentiate your business by inspiring trust. It’ll be three days of big ideas, new thinking and lively debate about the issues that really matter within Financial Planning.

The programme Check out the IFP website for details of this year’s programme, speakers and sessions. The programme offers a mix of keynote, pick and mix track sessions and, new for 2012, a programme of ‘how to’ sessions. This format allows you to choose the sessions most relevant to your personal, business and CPD needs.

Networking opportunities The conference offers a great feeling of community; fun and a willingness to share ideas which will help drive your business forward. The delegates are the cream of the Financial Planning and Paraplanning profession and they come to the conference not only for the high quality sessions but also for the wide choice of sessions and the numerous opportunities to network with other planners, the exhibitors and speakers.

The evenings... It’s not all hard work and no play. There are further opportunities for networking, relaxing and enjoying the festivities at the gala and welcome evenings. We’re shaking things up a bit and this year’s evenings will offer something a little different to previous years. The welcome evening is a more informal affair with a drinks reception in the exhibition hall followed by a buffet dinner and entertainment. The gala dinner and drinks reception is black tie and is followed by entertainment and even dancing for those who want to really let their hair down. Visit the IFP website for further details or contact the IFP 0117 9452470

IFP encourages ideas and suggestions from members for 2013 events schedule Planning at IFP HQ is well under way for the 2013 programme of events. On the line up you’ll see the return of the Paraplanner conference and dinner, a dedicated ethics and practice standards day, the Scottish Conference and an exclusive event for Accredited Financial Planning FirmsTM. There will also be one or two topical conferences. The IFP annual conference will return to the Celtic Manor Resort from 30 September to 2 October 2013. Rooms sold out early this year so it’s worth booking early to guarantee your accommodation and benefit from early booking discounts. We want to hear from you too. We want to know who and what you would like to see

Accredited Financial Planning Firms event in March 2012 on the programmes. These events are designed with you in mind and we do work closely with an events committee made up of IFP members but it would be really good to hear from you directly.

To send your ideas or suggestions get in touch with IFP HQ, or contact one of the events committee Donald Fraser, Damien Rylett, Tina Weeks and Mike MacLeod.

IFP Events Calendar 2012 Open Events

IFP Training Courses

IFP Annual Conference & Exhibition 2012 1-3 October 2012 The Celtic Manor Resort, Newport, South Wales

A route to becoming a CFPCM professional combining structured workshops and private study.

Scottish Conference, Financial Planning Day & Dinner 19-20 November 2012 | Radisson Blu Hotel, Edinburgh

FastTrack Gap-Fill Events 2012 These two day gap-fill events will cover all of the learning outcomes required for the regulated activity of advising on packaged products that are not covered by the CFPCM certification and Fellowship. Newport 29 Sept - Financial Services Regulation and Ethics 30 Sept - Personal Taxation London 09 Oct - Financial Services Regulation and Ethics 10 Oct - Personal Taxation Doncaster 06 Nov - Financial Services Regulation and Ethics 07 Nov - Personal Taxation

IFP Branch meetings - upcoming Bristol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 September Kent & Sussex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 September Lancashire & Cumbria . . . . . . . . . . . . . . . . . . . . . . 20 September Manchester . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 September Bath . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 September Birmingham . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 September North East . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 September Cotswolds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 September Essex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 September Leeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 09 October London . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 09 October Thames Valley . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 October Chester & North Wales . . . . . . . . . . . . . . . . . . . . . . . . 11 October

32 | October 2012 |

Principles & Practice of Financial Planning Tues 18 Sept 2012 [Scotland] Thurs 29 Nov 2012 [London] Preparation Day Wed 19 Sept 2012 [Scotland] Tues 09 Oct 2012 [Bristol] Thurs 06 Dec 2012 [London] CFPCM Certification Assessment Session The following all take place in Bristol 04-05 Dec 2012 IFP Paraplanner Exam Workshop This two day interactive workshop focuses on skills, knowledge and competences required by a Paraplanner in a Financial Planning practice. It is ideal preparation for the IFP Principles in Financial Planning Exam resulting in the Certificate in Paraplanning. Day 2 Bristol. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mon 17 Sept London. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tues 18 Sept Manchester. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Weds 19 Sept Scotland. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Thurs 20 Sept Principles in Financial Planning Exam [resulting in the Certificate in Paraplanning, all dates subject to demand] Bristol. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Mon 29 Oct London. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tues 30 Oct Manchester. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wed 31 Oct Scotland. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Thurs 1 Nov NB: IFP reserves the right to amend or cancel any event or event times and dates. This includes changes to speakers, content and programme.

IFP Sponsor NEWS

ETFs and RDR: what you need to know ETFs have arrived and are here to stay. They can also help you help your clients achieve their investment goals. In a post-RDR world, the ‘whole of market’ requirement will certainly require that you consider ETFs. The RDR consultation paper in section 2.9 refers to ETFs: “… to the extent that ETFs can be a cheap and transparent way to invest in a particular market, even under our current whole of market requirements, these products should be considered when deciding which products are suitable for a retail client.”1 The FSA appears to have recognised that ETFs can provide a “cheap and transparent way to invest” just like other index funds and that they should be included as part of the “whole of market requirements.” The consultation

paper picked up the two key benefits of ETFs for advisers: cost and transparency. They share these benefits with other index funds, such as Oeics. Ultimately, index ETFs simply offer another way to index, although there are some features of ETFs that you will need to know about before using them for your clients.

What are the key points? ETFs have proven to be a popular and flexible way of delivering pooled index funds at an even lower cost They offer another way to index and build solid, diversified investment portfolios. ETFs are not going anywhere and advisers will need educate themselves to meet the whole of market requirement under RDR Costs are key and understanding the full ‘round trip’ costs, or the cost

of buying, holding and selling an ETF, along with the breakeven point, are the keys to using ETFs wisely.

Discretionary permission Many advisers mistakenly believe that because ETFs trade on the stock exchange that they need discretionary permission from the FSA to give advice on them. Because this would ramp up personal indemnity costs, they feel that this would preclude the use of ETFs on a cost basis. But it’s worth repeating the fact that Ucits ETFs are just another fund that are covered by their normal permissions. They’re really just another pooled diversified fund with flexible access. Financial Services Authority, Consultation Paper 09/18 – Distribution of retail investments: Delivering the RDR. June 2009, p11.


We’ll be at the IFP Conference 2012 at the Celtic Manor Resort from 1-3 October and look forward to seeing you there. Please come and see us on Stand 46 in the Exhibition Hall.

Pershing celebrates 25 years of helping financial companies in Europe to grow Pershing Limited, a BNY Mellon company, has been providing a comprehensive range of business solutions to financial companies in Europe for 25 years. Our relationship with the IFP provides us with a welcome opportunity to communicate directly with professional Financial Planners and Paraplanners right across the UK. Our New Model Custodian solution provides customisable custody, administration, portfolio management and trading support solutions for clients across the UK and Channel Islands. Managing over £38bn of customer assets and representing 477,000 investors, Pershing provides a comprehensive front, middle and back office solution which frees up wealth managers, Financial Planners and advisers to focus on their core business which is working on client relationships,

providing a Financial Planning service and investment advice. Our solution is open-architecture and multicurrency, covering all major asset classes including funds, investment trusts, ETFs, bonds and equities. As a custodian, the protection of client assets including cash is an integral part of our solution. Pershing recognises that each of our wealth management and Financial Planning clients will have differing sets of challenges and concerns and so we start by talking about their business and growth strategy. Developing understanding of our clients’ business objectives is the first step in establishing a proactive partnership that will deliver real value. We help clients with regulation, succession planning, technology and changing client demands to ensure they can develop clear business plans and strategy

and attract and retain profitable relationships. Our market is changing rapidly and we are experiencing strong demand for our services as companies seek to address increased regulation and risk management requirements. We strongly believe professionallymanaged, growth-orientated companies who serve investors with complex financial lives will benefit most from the changes resulting from the Retail Distribution Review (RDR) which comes into force from January 2013. Our focus is on helping these clients grow their businesses. Our New Model Custodian offering builds on Pershing’s existing wealth management solution, as well as Pershing’s longstanding experience in the US serving Registered Investment Advisers (RIAs) to provide high quality front-to-back office solutions to the UK financial market.

For more details visit: and do come and see us at Stand 14 at the IFP Conference from 1-3 October

IFP Sponsors IFP Platinum Sponsor Transact

IFP Gold Sponsors Architas AXA Wealth Blackrock Cazenove Capital Management iShares

Institute of Financial Planning Sponsors September 2012 Aberdeen Asset Management Ascentric Aviva Close Brothers Ltd intermediaries Db x-tracker Dimensional Fund Advisors Dominion Funds E-volve Consulting Hornbuckle Mitchell HSBC Life Independent Health Care Solutions James Hay Partnership JP Morgan adviser Just Retirement LGIM Margetts M&G Morningstar NS & I Nucleus PAB Ltd Parmenion Pictet Pershing Prestwood Software Prudential Scottish Widows Seven Investment Management Standard Life Suffolk Life Thesis ThreeSixty Vanguard Zurich | October 2012 | 33

Contacts & Diary


Financial Planner is the official journal of the Institute of Financial Planning and is published by Portfolio Publishing, London. Founded in 1986, the IFP is the exclusive licensee of the CFPCM mark in the UK. Whitefriars Centre, Lewins Mead, Bristol BS1 2NT 0117 945 2470

EDITORIAL Publisher & Group Editor: Kevin O’Donnell 01895 678629

Art & Production Director: Jason Taylor Staff Writer: Laura Dew 01895 676658 Email address for news releases: IFP Editorial Team: Nick Cann, Sue Whitbread, Katherine Morgans, Steve Gazzard

Advertising Marketing & Sales Executive: Liz Hopley 01895 546542 Marketing & Sales Assistant: Mark Douglas 01895 672771

General Enquiries General enquiries and advertising copy: Louise Glover 01895 672771

Publishing Published by: Portfolio Publishing, Panstar House , 13-15 Swakeleys Road, Ickenham, London UB10 8DF. 01895 678629 Subscriber Enquiries:

01895 672771

Seven IM introduces Harlequins players to careers in finance Seven Investment Management, a sponsor of the Institute of Financial Planning, took a break from helping Financial Planners to help a team of rugby players. Justin Urquhart Stewart (pictured holding rugby ball), 7IM marketing director, accompanied around 50 players (some pictured right) from the Harlequins Rugby Club as they explored opportunities in the City. The day was part of the Harlequin’s career development policy and players, including England captain Chris Robshaw (far right), visited places such as

Lloyds of London. Glen Stevens from 7IM said: “This is something Harlequins had been looking to do for a while in planning for the futures of their sporting players. We suggested a tour of the City and they welcomed it with open arms. It’s good to give the players different options and financial services is so broad and varied. Once you have a foot in the door and found a firm who will nurture and look after you then you can work your way up and gain different qualifications.”

Triathlon fun for Ironman Steve Well done to Steve Martin CFPCM, chairman of the Manchester IFP branch and managing director of Smart Financial Planning, on completing the Ironman Triathlon. The race, which took place in Roth, Germany, consisted of a gruelling 2.4 mile swim plus a 112 mile bike ride and a 26.2 mile run. Steve completed the race, which he took

part in with four friends, in 13 hours and 41 minutes. Steve said: “I am delighted that I have completed the race and got the medal. I was hoping to be a little quicker but over the moon to have done it all. “I am looking forward to concentrating on running and trying to run a sub-three hour marathon, that will keep me happy and occupied for a while I suspect.”

Printers: Stones of Banbury, Oxfordshire

Mark pedals his way for charity Financial Planner is published monthly. Financial Planner magazine is distributed to registered members of the IFP and to other qualifying readers. Applications for subscription for non-IFP members should be made to Portfolio Publishing (Subs) at the address above. The 12 month subscription to Financial Planner magazine is £92.00. © Portfolio Publishing Limited 2012. All rights are reserved and no part of this publication may be reproduced in any form without the advance written permission of the publishers. For copyright or syndication enquiries please contact the publishers through the contact details above. Portfolio Publishing Registered’s Office is: 25 Glover Road, Pinner, Middlesex HA5 1LQ. Company Registration No. 5542523. Financial Planner welcomes contributions from both members and non-members but contact must be made with the editorial team before submitting manuscripts. This magazine is intended entirely for professional use by qualified professional advisers and is not intended for consumer use or distribution. Views, opinions or claims are not necessarily subscribed to by the Institute of Financial Planning or Portfolio Publishing and neither the IFP nor Portfolio perform regulatory due diligence on authors or submissions and can accept no responsibility for loss occasioned to any person on taking or refraining from action as a result of the material contained herein.

Mark Pittaccio, investment director at IN Partnership, has completed the entire route of the 2012 Tour de France for charity. The 3,600km route was completed one week before the professional race in the same 20-stage format. Mark climbed over 50,000 metres, roughly the equivalent of six Mount Everest’s, with 21 other riders. A crash on day one and food poisoning in the Pyrenees added to the challenge. Mark

said: “A big mountain stage is the worst day to get ill. The descents were treacherous and chilled you to the core. It took me 12 hours to complete that one stage as I came off the last mountain in the dark. It was a tough day but the teamwork, camaraderie, humour and pure will got us to the finish.” The team raised over £300,000 for the William Wates Memorial Trust which supports disadvantaged youth in the UK.

Experienced. Professional. Trusted

34 | October 2012 |


ASSET ALLOCATION CAN GET VERY COMPLICATED 0 0 5 r e v o We’ve s to help expert l it unrave Our Multi-Asset funds are managed by a team of 23 asset allocation specialists backed up by over 500 investment experts from around the world. Find out more about our multi-asset experts, including their philosophy and approach to fund management, at

INVA11584_IF310812_08_12_180x267.indd 1

24/08/2012 16:27

Financial Planner October 2012  

Financial Planner Magazine October 12 edition

Financial Planner October 2012  

Financial Planner Magazine October 12 edition