Auto enrolment hits the road!

Tom Nall, Workplace Solutions Director 

We’re now a week into this round of auto enrolment masterclasses and with Birmingham, Cardiff and Exeter under our belt, we’re already off to a great start.

The events were designed to help advisers who are developing or establishing their AE proposition take it to the next level, in practical terms. Although all attendees had individual questions about their own circumstances and clients, there were a number of key themes that arose at all three meetings, and I’m sure will continue to do so at future events; how to charge for auto enrolment guidance to make sure it’s a profitable part of their business, how to create partnerships with accountants and payroll partners and how to engage employers. When compiling content for the masterclasses, we knew that these would be major areas of interest for attendees, and had therefore made sure that everyone would leave the events with the knowledge and tools to tackle these points and get started.

From my brief conversations with delegates as they arrived, it became clear that many of them thought they’d already missed the boat with the ‘valuable’ AE cases. In fact, there was more than one surprised face in each room when the market update presentation revealed that only 4% of UK businesses had already staged – a figure which will have dropped following the TPR’s discovery on Thursday  of half a million more employers whom will need to have a scheme in place by 2018!

The afternoon ‘clinic’ workshops to discuss individual complex cases have also proved very popular, with many delegates attending to discuss the best solution for a specific client’s needs, cases where the client had approached an adviser only after missing their staging date and adopting cases from accountants who’d taken on a client’s auto enrolment business originally, only to discover that they had neither the skills nor the knowledge to run the end to end implementation, and manage the maintenance, of an AE scheme for the employer.

We’ve recently been working on a re-designed toolkit of material for engaging with employers which will be available very soon; we had a few prototype versions to show attendees at the masterclasses and the feedback we received was fantastic.  Keep an eye on your email and the SimplyEnrol site for more information.

There are still places available at some of the masterclasses – to see what’s coming up in your area please visit the Events areas of the SimplyBiz and Compliance First sites.

Mobilegeddon!

When ‘popping into town’ (ie getting the 7.15 train to London for a 9.00 arrival), I like to travel as light as possible, whilst still having the essentials to ensure the day is as productive as possible – iPad, check, iPhone, check, iPod full of music downloaded by my 11 year old son, er, check. Oh and a coffee…or two.

So, with the essentials at the ready, it’s time to go to work (metaphorically speaking).

As I trawl the Internet to find various news pieces, it becomes evident that Google’s latest project is well and truly in play. Project Panda (Google’s official project title!) is all about rewarding friendliness, friendliness to mobile devices, that is! As of this week, new algorithms now reward websites that are optimised for mobile use and already some rather large businesses are falling foul to what has been dubbed ‘mobileageddon’.

In today’s digital era, consumers want, nay need, access to information on the go and their thirst is growing. With this in mind, Google’s approach should come as no surprise, but many businesses have simply been unable to react, at least in the short term.

At SimplyBiz, we offer our members access to the lowest cost web solution of its kind. For only £6pcm, firms can have a web presence with prewritten content, calculators, a bank of images and, what’s more, from this month, new templates are available that are mobile friendly and which have already passed Google’s new test. Did I mention that this is all for just £6 a month?

So, I would urge advisers to ensure they upgrade their website as soon as possible. The role of mobile devises in our everyday life is not a fad and as ive said numerous times of late – marketing is about relevance, so make sure you can be found where your clients are looking.

Right, time for a new search…

Richard Ardron
Marketing Director

Relevance, relevance, relevance

MarketingWhen you are employed in a senior marketing position, one of your key remits is to drive change. This may seem a strange starting point, but marketing today and particularly communications, is multi-dimensional and the pace of change shows no sign of slowing down.

So, with this in mind, there is much to consider when putting together a communications strategy and as an adviser, or business owner, you will need to consider the same principles.

All change?

It is fair to say that over the past few years, we have seen an unprecedented evolution in communication channels, with new and diverse opportunities opening up on an almost daily basis.

The key is not to just implement wholesale changes, but to analysis the environment within which you operate and to ensure you offer the choice that your intended recipient wants. This may mean the introduction of new channels and probably changes to existing ones to ensure that they remain fit for purpose, or more to the point, fit for today’s world.

Within the blink of an eye, we have gone from magazines, bill boards and newspaper advertisements, to Twitter, QR codes and blogs, but whilst the channels have changed, the fundamentals that drive them have not.

So, with so many new channels at our disposal, it’s tempting to dive in and follow the latest trend, but whichever channels you use, it has to be relevant. Case in passing, we happen to have a young intern in our office during summer who asked… ‘Why aren’t SimplyBiz on Snapchat – everyone is on Snapchat?’

My response of course was simple, as surprisingly, our target audience was not him and his class mates!

The point of course is this – you need to use the communication channels that your clients (or prospects) are using, if you don’t, you will miss out (or waste time and energy in spaces they don’t occupy).

So, before you make any decision on which channels to use, you need to ask some fundamental questions and go right back to basics…

  • Who are my clients/prospects?
  • Where are they getting their information from / what channels are they already using?
  • What’s right for my business, how do I want to be perceived?
  • What’s working for others in my sector, can I steal a march on them?
  • What am I looking to use communications for, what do I hope to get from them?
  • What’s available, accessible and indeed affordable to me?

Whilst some of these fundamentals will be within your control, others may rely on assumptions, so taking a real back to basics approach, the best way to find out how your current client base wish to be communicated with is to ask them.

As part of your service (especially in light of requirements post RDR), you may wish to add in communications –e.g. we will keep you up to date with news, views, developments and opportunities (and so on). A quick and non-intrusive survey of your current client base will quickly show you the optimum channels to employ – email, letter, quarterly newsletter, social media and so on.

And remember, most people will want to select more than one option, so ensure you offer them that chance.

A point to note though, going back to my earlier example – whilst it’s important to get your communication mix right for today’s client, you do need to have half an eye on tomorrows client. A watchful brief on developing channels will put you in a good position when you come to do this exercise again. Remember – client needs will change, the communication arena will change and thus the tactics you employ will need to change to keep up.

Implementing an integrated communication strategy, utilising a blend of traditional and new communication channels, based on client preference, that is reviewed against the back drop of the changes I referred to earlier, will certainly put you in a strong position for the foreseeable future.

By Richard Ardron, DipMCIM Chartered Marketer
Marketing Director SimplyBiz
www.SimplyBiz.co.uk

Carry on at your convenience

How changing consumer behaviours should shape your communication strategy

It may be a little clichéd, but the key to good communication has been, and always will be, to ensure you get the right message to the right people through the right channels. So, if we already know this, I guess the question is – and?

Ensuring you use a good spread of communication channels (print, email, web, video etc.) is often seen as the backbone to any good communications strategy, but what’s more important is to ensure you are delivering your messages through the channels your intended target audience are actually using.

Seems obvious, but it’s not always as simple as it sounds.

I’d like to quickly share with you what I picked up from a recent event, just to provide a little perspective, if a slightly unusual one.

I recently had the pleasure of attending an investment forum in London and in one particular session on Global Equities, I was surprised to find myself right in the middle of a rather interesting session looking at the changing dynamics of the Asian consumer and how this in turn was governing equity strategies (bear with me!).

The crux of the matter was this. The wealth in Asia is with the younger consumer (highly educated, immersed in western culture) and in turn it is they who are dictating where the flow of money goes – they are travelling more, they use new technologies (the statistics of iPhone use was staggering) and they are shopping online ( 77% of purchases are done online). So guess what’s driving some of the investment strategies for Asian Equities…

Ok, so this example is not really going to shape your communication strategy back home, but the lesson learned here is the same – changes in consumer behaviour are valuable triggers that you should not ignore, instead you should use them to adapt your communication strategy.

So, what do we know about UK consumer behaviour?

Well, what we do know for a fact is that it changes and the key is to keep an eye on this. You may wonder how to do this, but there are clues – you just have to look for them. Take the banks, for example. They are making engagement relevant – more digital, more online banking, more mobile banking – in essence, looking at how customers want to engage with them. Supermarkets are another example, look at how some of the lesser known brands have started to get their share of the market, just by being a little different, and look at what some of the bigger names are doing to compete – launching their own tablets, offering online streaming of videos and music and so on.

So, what of the role of technology? Well, I’m seeing a lot of conflicts about the role technology plays amongst the younger consumer, or the Generation Z as it’s become known as (16-34 year olds). Whilst you may initially think “That’s not really my client base”, the obvious answer is, “But it will be in years to come”. With this in mind, it’s important to look at what the ‘emerging customer’ is doing.

Whilst you or I may view some of the digital marketing we now have at our disposal as new, the harsh reality is, many of the consumers of the future do not. That said, there are some interesting shifts we can start to look at. Whilst its true technology is a vital component in everyday life, we are seeing a move from dependency to more of an ‘enabler’ role – consumers are demanding real life experiences and in many cases to piggy-back off the experiences of others.

Bearing this in mind, communications strategies will need to move to offer more advice, and more practical application, such as real life experiences. Perhaps videos that are designed to simply explain what you do as an adviser and how you can help them, websites that showcase your business, your credentials and the practical way you can help with savings advice, helping to get them on the property ladder etc -real life issues, real people receiving an experience they want to share (all optimised where possible for mobile of course!).

Statistics will of course show that digital media is not the sole domain of the young, but I think it’s fair to say that they are certainly the ones dictating the change and indeed the pace of that change.
So, is it technology or bust? I would say not. What we know is that consumers want convenience. If they are engaged in social media, like to look at things on their phone, then common sense would suggest that we would wish to be viewed in this arena. However, there is of course still a lot to be said of tradition, especially when it comes to finance (going back to the banks, you only have to look at some of the shift in messages we are seeing in advertising – placement on heritage, foundations, even the rediscovery of forgotten brands!).

So, with this in mind you will be reassured to know that there is still a place for the written word, a corporate brochure, a client newsletter, or even a well written letter. Remember, it’s about relevance and convenience and when you add to that the other value consumers crave, one which you’ve been adding for years – service – it all makes for a good mix and one that should steer you right over the coming months and, dare I say, years.

Richard Ardron, Chartered Marketer
Marketing Director, SimplyBiz Group

Cyber Monday – a timely reminder

The scenes on Friday will have left many of us asking why have we adopted Black Friday (bearing in mind it’s based on Thanksgiving) and also wondering – ‘What was that all about’? (As we watched the chaos that ensued).

With Black Friday behind us, it’s on to ‘Cyber Monday’ –where today shoppers will take to the internet to make their purchases, with record numbers expected.

The difference with today (and the crux of this blog) is that shopper will spend a lot of time researching, using the net to assess brands, companies, products, deals, reputation, feedback and much, much more.

We truly live in a digital era, an era where consumes have an unquenchable thirst for information and it’s a time like this when businesses without an internet presence simply miss out.

Whilst Cyber Monday will probably pass you buy, the reality of the fact that the internet is now so entwined in our everyday lives should not.

Having a web presence is now a must
Think for a minute about how you yourself behave when looking for, say, a tradesman. Unless it is a friend or a personal recommendation from a friend, you will no doubt checkout said tradesman via their website – who are they, what’s their credentials, what do they charge, what have other clients had to say about them?

With this simple principle in mind, I would urge all firms to have at least a basic web presence and develop it as you go. You can start by simply having an online brochure showcasing who you are and what you can offer, but by building up client testimony, feedback mechanisms, contact forms, links to articles, blogs, options to link to your social media pages or even watch you via video, will bring your site to life.

Once you have a site, the next trick it to get propel to find it;

  • Ensure your web address (or URL) is on all your material – business cards, letter heads, brochures, newsletters etc.
  • Ensure the content of your site is relevant – ‘key words’ will help search engine to find you – so for example, if a client searches for a financial adviser in Leeds and on your website you don’t mention that you are either (seems very obvious) search engines will not find you
  • Keep your content fresh – update whenever you can, new office, new member of staff, charity event, regular news and views, case studies, testimony, blogs etc.
  • Perhaps consider ‘Pay per Click advertising’ (known as PPC) – here you can create small text based ads on say Google, which will show up when someone searches for an adviser. If you choose to pay for clicks and not impressionism, you will only pay when someone actually clicks to visit your site.
  • Use directories, e.g. local directories showcasing local businesses and national ones

So, how do you get started?
There are many ways you can build a web presence – from employing an external design company, to getting the son or daughter of a friend of the family to build you one (you may be surprised how common that one comes up) – but remember, the initial build costs are only the beginning, you will need someone to make sure the site is kept up to date.

With this in mind, we have seen the emergence of template based web solutions – whereby a company will build a ‘master’ template and provide multiple variables for firms – different colours, pictures, layouts etc., the ability to add in your own assets (pictures, logos etc.) and personalise the copy. Whilst a simple premise, it does allow for many versions of the same entity, providing an extremely cost effective solution and one, depending on which one, which can offer a streamlined process for updates and compliance checking.

If you haven’t got a web presence, I would urge you to get one – then the fun can begin – enter the world of social media…

Richard Ardron
Marketing Director, SimplyBiz

SIMPLYSITES
SimplySites is the lowest cost entry level web solution around. For £6pcm, you can have your very own website and what’s more, we are making some exciting improvements.

  • NEW imagery: A new image library has just been added, you can now choose form over 200 new images to make your site more appealing
  • NEW calculators: we are now adding a number of FREE calculators – you can now add a mortgage calculator, with more due later this month
  • NEW Templates – for January 2015, we will be adding new templates, each OPTIMISED FOR MOBILE USE!

To find out more please email s.fisher@simplybiz.co.uk

Client communications – where to start

I had the pleasure of speaking to a number of advisers at an event earlier this month and in almost all cases, we had the same conversation around marketing and communications – advisers want to do more, but either haven’t got around to it, or are not quite sure where to start, given the many communication channels now at their disposal.

With this in mind, I thought I’d share with you my thoughts on the matter.

When it comes to marketing, the biggest temptation is to assess the various tools at our disposal and to then simply select the ones you would most like to use, or think you should use e.g.…‘we need to be on social media, everyone’s on social media’.

However, before you can determine which tools you are going to employ, you need to decide what it is you are looking to achieve – do you want more clients, deeper engagement with existing clients or simply to provide an ongoing service.

You are going to want to strike a balance and set yourself objectives that you are comfortable with, but that are as specific as possible, setting objectives that are meaningful and that you can measure.

For example, using increasing clients as a simple example, you can set an objective in one of two ways – ‘Grow customer base by 20% by year end’, or ‘Get more customers’.

Option 1 is very specific and gives you a clear end result to aim for. You could set levels (level one remain static, level two 10% and level three 20% increase – ask yourself – what will you be happy with at the end of it all?). On the other hand, Objective 2 is rather unspecific – if you take on one more client is that job done, or would you be looking for considerably more?

Now you have quantified what you want to achieve, you ‘could’ start to assess the many marketing tools at your disposal. However, if you can afford the time, I would strongly urge you to put a mini plan together before you start to look at the actual tactics that you will employ.

By creating a simple marketing plan, you will ensure that the right communications channels are used and that your business is represented in the way you want it to be. Looking internally first at your business and then at the wider market, will help you to answer some fundamental questions, such as:

  • How do I want my business to be perceived?
  • Who are my audience, how are they behaving, interacting?
  • What do I offer, want to offer – is this different from other business in my area?
  • What is happening around me that may affect this (e.g. politics, legislation)?
  • What are the key strengths of my business?
  • What opportunities are out there?

Using the information from your plan, you can now start to really quantify those earlier objectives, which in turn will make selecting your tactics pretty straight forward. For example…

  • I’m going to introduce an integrated communication programme to existing clients to ensure they remain loyal and to increase penetration
  • I’m going to buy in some new data and commence a marketing campaign to attract new customers
  • I am going to align the business with 3 local solicitors to tap into a wider customer base I am going to engage with all local businesses to increase my exposure in the corporate market and, in turn, to tap into the employees within each
  • I am going to add (product) to my existing product range (e.g. will writing, GI etc.)

    Now for the good stuff!

    Ok, enough planning, it’s time to move to implementation.

    When I am asked about which channels to use, I always revert back to basics – Marketing Communications is about getting…

    …the right message
    …to the right people
    …through the right channels

    Devolving this further step – for me it’s simply about two words – ‘Integration and Relevance’.

    Ensuring you use a good spread of communication channels (print, email, web, etc.) is the backbone to any good communications strategy, but what’s more important is to ensure you are delivering your messages through the channels your intended target audience are actually using. Oh, and, of course, this is all a movable feast – consumer behaviour will change, you just need to look for the clues.

    I can’t go into the ins and outs of all the tools here, but if pushed I would say this…

  • Use email – it’s a quick and cost effective method to get targeted messages out on mass and with a management system, you can even track which clients have read what
  • A good looking, quarterly newsletters, either posted out or appended to your email is a great way to get your brand out there and to keep topical issues in the mind of your clients
  • Social media – love it or hate it, your audience is using it, so I would urge you to have a presence. Don’t try and be everywhere, stick to one or two to get started, perhaps Twitter and Facebook

    I hope this piece has been of use and that you are now ready to embark on the next chapter of marketing – good luck and see you on the other side!

    Richard Ardron, DipMCIM Chartered Marketer, Marketing Director SimplyBiz

    Want more? Richard has written a definitive guide to marketing for advisers, contact SimplyBiz direct for your copy

Carry on at your convenience

How changing consumer behaviours should shape your communication strategy

It may be a little clichéd, but the key to good communication has been, and always will be, to ensure you get the right message to the right people through the right channels. So, if we already know this, I guess the question is – and?

Ensuring you use a good spread of communication channels (print, email, web, video etc.) is often seen as the backbone to any good communications strategy, but what’s more important is to ensure you are delivering your messages through the channels your intended target audience are actually using.

Seems obvious, but it’s not always as simple as it sounds.

I’d like to quickly share with you what I picked up form a recent event, just to provide a little perspective, if a slightly unusual one.

I recently had the pleasure of attending an investment forum in London and in one particular session on Global Equities, I was surprised to find myself right in the middle of a rather interesting session looking at the changing dynamics of the Asian consumer and how this in turn was governing equity strategies (bear with me!).

The crux of the matter was this. The wealth in Asia is with the younger consumer (highly educated, immersed in western culture) and in turn it is they who are dictating where the flow of money goes – they are travelling more, they use new technologies (the statistics of iPhone use was staggering) and they are shopping online ( 77% of purchases are done online). So guess what’s driving some of the investment strategies for Asian Equities…

Ok, so this example is not really going to shape your communication strategy back home, but the lesson learned here is the same – changes in consumer behaviour are valuable triggers that you should not ignore, instead you should use them to adapt your communication strategy.

So, what do we know about UK consumer behaviour?

Well, what we do know for a fact is that it changes and the key is to keep an eye on this. You may wonder how to do this, but there are clues – you just have to look for them. Take the banks, for example. They are making engagement relevant – more digital, more online banking, more mobile banking – in essence, looking at how customers want to engage with them. Supermarkets are another example, look at how some of the lesser known brands have started to get their share of the market, just by being a little different, and look at what some of the bigger names are doing to compete – launching their own tablets, offering online streaming of videos and music and so on.

So, what of the role of technology? Well, I’m seeing a lot of conflicts about the role technology plays amongst the younger consumer, or the Generation Z as it’s become known as (16-34 year olds). Whilst you may initially think “That’s not really my client base”, the obvious answer is, “But it will be in years to come”. With this in mind, it’s important to look at what the ‘emerging customer’ is doing.

Whilst you or I may view some of the digital marketing we now have at our disposal as new, the harsh reality is, many of the consumers of the future do not. That said, there are some interesting shifts we can start to look at. Whilst its true technology is a vital component in everyday life, we are seeing a move from dependency to more of an ‘enabler’ role – consumers are demanding real life experiences and in many cases to piggy-back off the experiences of others.

Bearing this in mind, communications strategies will need to move to offer more advice, and more practical application, such as real life experiences.  Perhaps videos that are designed to simply explain what you do as an adviser and how you can help them, websites that showcase your business, your credentials and the practical way you can help with savings advice, helping to get them on the property ladder etc -real life issues, real people receiving an experience they want to share (all optimised where possible for mobile of course!).

Statistics will of course show that digital media is not the sole domain of the young, but I think it’s fair to say that they are certainly the ones dictating the change and indeed the pace of that change.

So, is it technology or bust? I would say not. What we know is that consumers want convenience. If they are engaged in social media, like to look at things on their phone, then common sense would suggest that we would wish to be viewed in this arena. However, there is of course still a lot to be said of tradition, especially when it comes to finance (going back to the banks, you only have to look at some of the shift in messages we are seeing in advertising – placement on heritage, foundations, even the rediscovery of forgotten brands!).

So, with this in mind you will be reassured to know that there is still a place for the written word, a corporate brochure, a client newsletter, or even a well written letter. Remember, it’s about relevance and convenience and when you add to that the other value consumers crave, one which you’ve been adding for years – service – it all makes for a good mix and one that should steer you right over the coming months and, dare I say, years.


Richard Ardron, Chartered Marketer
Marketing Director, SimplyBiz Group

Regulatory Creep Needs Planning

Whilst MMR implementation is now over three months past, its effects are still being felt…or are they?

It is true that many decisions made by lenders or the data/documentary requests can still be puzzling, but the truth is this was the situation pre- MMR. They are just different challenges we now face. The worry that fewer people would pass the new affordability models has been, in the main, dispelled. Feedback from the majority of lenders is that DIP pass rates have held steady.

The bigger worry for me is the introduction of new rules post MMR by lenders, enforced by policy changes from within the FCA and Bank of England. This regulatory creep worries me more due to the timescales involved. We were aware changes were coming for 18 months in relation to MMR, with both lenders and distributors working hard in 2014 to ensure that all intermediaries were kept abreast of the changes, and appropriate training was provided to make the transition as smooth as possible. These new changes – made by a number of lenders on loan to income ratios and also changes to affordability stress test rates – have been rushed in with, in some instances, 4 hours notice. These short timeframes do not allow for an orderly approach. How can an intermediary be expected to quickly work through their outstanding applications and submit them in a timely and appropriate manner, whilst still delivering a quality service to their client and just importantly submitting fully packaged applications to a lender? Is quality not a key metric now!?

The buck does not fully stop at the door of the lender, but more the Governmental Departments making the decisions in an effort to temper the market. Whilst the changes currently made will not have major impacts on volumes, it is the trend of regulation by the backdoor that is of major to concern to me.

By Martin Reynolds, Chief Executive Officer of SimplyBiz Mortgages

Visit www.SimplyBizMortgages.co.uk

The age of the trusted adviser

Professional disciplines are converging. Traditionally, providers of consumer advice have operated in silos determined by their professional qualifications, but increasingly qualifications are coming to define the specialisations of individuals rather than the corporate entities within which they work.

Silo-based professional services have never been in the best interests of consumers, who have been expected to use their own judgment as to where best to source advice and have had to try to decide for themselves how best to co-ordinate the advice received in the hope of avoiding vital issues falling between two stools. And is there any reason why clients should understand the largely self-imposed demarcations adopted by the professions? I recall when, as a partner in a law firm, a lady whose tax return I had completed asked me “are you a solicitor as well as an accountant?” The reality, as revealed by research among City law firms, is that 80% of the work done by solicitors could be conducted by people with no legal qualification.

One of the main catalysts for change has been the Legal Services Act, which enables solicitors and other lawyers to set up joint businesses with members of other professions and empowers regulators outside the legal profession, such as the Institute of Chartered Accountants, to authorise their members to provide legal services.

In consequence, we are already seeing commercial organisations such as AA, Saga and Co-op adding legal services to their client propositions, and the legal regulators have stated their intention of moving towards activities-based regulation. In a recent speech, a director of the Solicitors Regulation Authority noted with approval “a market no longer defined by professional titles and one in which the artificial barriers created by those titles are breaking down rapidly.” She went on, “Consumers don’t think “I need a solicitor” or “I must get a barrister”, they simply want someone suitably qualified to help them sort out their legal matters, knowing that they will be protected if things go wrong.”

Integrated multi-disciplinary firms are now available as a business model, but they may not be the best solution. For regulatory and cultural reasons the first inter-professional combinations which have been established under the Legal Services Act have taken the form of parallel business units operating under a common umbrella. However, their overall business objective has been defined by reference to an indentified client need, and particular attention has been paid to ensuring that through training and the internal rotation of staff, all members of the organisation have been made aware of their role and that of their colleagues in achieving the common objective.

Whether the business model be that of the Alternative Business Structure, the joint venture or the strategic partnership, financial advisers are well placed to benefit from this scenario, because their comprehensive factfinding and the relationship-based nature of their business give them the required holistic overview which provides the platform for more transactional professional services. The age of the trusted adviser is dawning.

By Ian Muirhead, Director, SIFA

Visit www.SIFA.co.uk

A Platform for Change

Implementation of the final tranche of RDR regulation, relating to the way in which the rules affect platform providers, has now been put in place.  From 6th April 2014, platform providers have not been able to retain rebates from product providers, or fund managers, for any new business transacted. These rebates must be returned to the client in the form of unit rebates or, where they do not exceed £1 per month, per fund-holding, in cash. From 6th April 2016, this will also apply to all legacy business.

Below is a quick reminder of some of the key considerations for you and your clients;

How will this work in practice? I see it being applied in two ways. Firstly, it is likely the legacy date will be brought forward by many platform providers, especially where there is a change to any legacy business before 2016, and, secondly, clean share classes will be favoured over offering client rebates (also known as bundled charging).

Will this mean cheaper charges to the client? Well, not necessarily. When moving to a clean share class, the total cost of the conversion/switch needs to be considered. Whilst a clean share class will have a lower AMC, other charges, such as the new platform charge and conversion/switch costs, could mean the new total cost exceeds the current one.

What is meant by converting / switching? This refers to the process of moving into a clean share class. A conversion is the simple process of replacing one share class unit with another and will normally be the most beneficial approach to be taken. This is because a switch involves the process of cancelling one unit to purchase another and, in doing this, there can be cancellation and purchase costs, together with the possibility of being out of the market whilst the process is carried out.

Who decides on the process when moving to a clean share class? The platform provider would make this decision. As nominee, they are likely to notify the investor of a ‘conversion’ to a new share class. In doing so they must also inform the investor of  all other charges as a result of this change and apply the client best interest rules (should this result in extra costs). This notification must also confirm the options should the investor not wish to convert to the new share class. To ensure a platform provider does not provide advice, we do not expect these notifications to contain a recommendation to the investor. Where the investor is the unit holder, their positive election to move to a new share class must be obtained.

What if a client requests advice? It may well be the case that many clients will wish to seek clarification or guidance following notifications from the platform providers, due to the potential levels of detail and complexity involved. Upon receipt of this information, clients may then be able to make their own informed decision. For those that require advice on how to proceed, you must apply the client best interest rules. As this is most likely to be a conversion of units you are not required to issue a suitability report, however, good business practice would suggest you provide confirmation the conversion is in their best interest and that the advice is based on the conversion only. For switches you should adopt a more formal sales process, including issue of a suitability report, to include the relevant risk warnings.

Will this affect legacy commissions? Yes. Legacy commission is the remuneration received from platform providers that have, or had, a bundled proposition (this is where they retained AMC rebates to pay for their services and adviser commissions/fees). Payments in future will have to be paid by way of an adviser charge. You may wish to consider contacting these legacy business clients using a template approach letter to promote a formal ongoing service proposition.

Should a key investor information document (KIID) be issued? Again, it will be the responsibility of the platform provider to make this available to the investor on conversion. The only instance in which an adviser would need to consider issuing this would be when giving advice on a switch.

By Aileen Lynch, Head of Technical of Compliance First

Visit www.ComplianceFirst.co.uk