You are here: AdviserArchive: May 2011

Archive: May 2011

This page is for Professional Financial Advisers only Latest from Cofunds - week commencing 16 May 2011

Using Cofunds to plan - Updates to the DT Dynamic Planner tool

As a result of the FCA’s guidance on ‘Assessing the suitability’ we’re working with Distribution Technology to roll out a number of important enhancements to the Dynamic Planner tool.

These enhancements will make it easier for it to be used as part of a compliant, advisory process and to promote best practice as identified in the FCA report.

One of the main changes to take note of is that from 8 June, DT will no longer be supporting the 5, 18 and 24 question risk profiling questionnaires, which will be removed from our website. The 10 and 20 question questionnaires, developed by Oxford Risk will continue to underpin the Dynamic Planner.

  • Using the 10 and 20 question versions, means you can benefit from more accurate wording and therefore more accurate profiling. This is in line with the FCA’s best practice.  Any risk profiles previously determined through the 5, 18 and 24 profiles will be unaffected by this review.  However, for new clients and ongoing client reviews, we would suggest using the latest questionnaires.

The following updates are now live on the website.

  • The risk profile names and descriptions will be updated to make sure that they’re clear and concise and, most importantly, easy for your clients to understand
  • There is a new section, Risk Capacity, which will be incorporated into the risk profiling process.  It will prompt you to thoroughly explore the areas that need to be considered in more depth when assessing your client’s attitude to risk - for example the investment timeframe, capacity for loss and liquidity requirements.  These are already covered in the existing, holistic planning tool, but, together with DT, we can make them better and draw more attention to these key areas. This will also provide a clear audit trail for your records.

These additional questions will not be part of the psychometric risk profiling and will have no direct result on the questionnaire results or suggested risk level.  What they will do, however, is raise these important considerations in the client’s mind and demonstrate that the adviser has conducted a thorough fact find.

Finally, there will be a new Check Response system that will highlight any answers on the questionnaire that are contradictory and prompt you to discuss these with your client.

The Investment Forum heads north

Following the success of our Economic Forum earlier this year, we’re heading to Harrogate's Rudding Park on Wednesday 8 June with an interactive Investment Forum with a superb line-up of speakers from across six totally different asset classes. Make sure you don’t miss out by registering your place.


An offshore bond with far greater choice

You can now choose from a much wider selection of investment options when your client invests in the Legal & General International Portfolio Bond – including structured deposits, ETFs and Investment Trusts.

These include:

  • Deposit Accounts
  • Structured Deposits
  • Discretionary and Non-Discretionary Asset Managers
  • Exchange Traded Funds
  • Investment Trusts.

As well as the additional range of asset types, investing into the bond is now only available online making the process quicker, easier and more accurate.

How will it work?

We’ll still be providing the administrative services for investment funds and, as before, we’ll not charge for switches.

Cofunds is now essentially providing the funds service within the off-platform bond, if investing into any of the new asset types available you’ll need to deal directly with LGII - and your client may incur charges for purchasing and selling these assets.

LGII will send clients half-yearly valuations and transaction statements for the bond. These will have a one line total for the funds they hold on platform. We’ll continue to send your clients a full Cofunds statement showing the breakdown and value of the funds they hold on the platform.

Literature

All pre-sale literature will only be on the LGII website. There will be a click-through from our website. I have attached a draft copy of the LGII sales aid. Cofunds T&Cs have been updated and you’ll be able to find these and the list of permitted funds at the Document Centre on our website.

You’ll need to contact LGII directly on 0345 674 0803 for illustrations.


Making withdrawals from your client's investments

We’re aware of the responsibility we have here at Cofunds around protecting your clients’ money, so we can only release fund withdrawals on receipt of an original signature from the client.

Although we can accept authority to place a deal by fax, post, or online, whichever method you choose, we still need to receive the client’s signature in order to release the proceeds of the deal.

You can...

  • Place a withdrawal online, then send in an instruction with an original client signature to withdraw from the cash account – we’ll then send the money out as instructed as soon as it settles in the cash account
  • Send in an instruction with an original client signature – a deal will be placed and funds sent directly to the client as instructed
  • Fax in an instruction signed by you with payment method details, then send in an instruction with an original client signature – a deal will be placed with a restriction on receipt of the fax and the proceeds will be released upon receipt of the original instruction
  • Fax in an instruction signed by you to pay to the cash account, then send in an instruction with an original client signature to withdraw from the cash account – we will then send the money out as instructed as soon as it settles in the cash account.

Have you explored the Cofunds Pension Account?

A collectives-only pension with an online illustration and application process and the option to upgrade to the Suffolk Life MasterSIPP should your clients require additional investment vehicles at a later stage. Watch a short video on the Cofunds Pension Account.


Corporate actions

View details of recent and upcoming corporate actions
Perspectives