Presentation is loading. Please wait.

Presentation is loading. Please wait.

Presenter: Alison Smith Title: Compliance Update March 2009.

Similar presentations


Presentation on theme: "Presenter: Alison Smith Title: Compliance Update March 2009."— Presentation transcript:

1 Presenter: Alison Smith Title: Compliance Update March 2009

2 1.Pension Switching / Consolidation Review 2.Collective Responsibility (Apportionment & Oversight) 3.Professional Indemnity Insurance (PII) Agenda

3 Background to the Review 1.FSA “Gleneagles Speech” (Sept’06) 2.Retail Distribution Review (RDR) 3.Quality of Advice Pension Switching (Dec’08)

4 Scope of FSA’s Review 1.30 firms visited (Autumn’08) cases reviewed (approx. 10% of Pension Switching cases since A Day) 3.Review of providers & product literature

5 High Level Findings 1.16% of cases - “unsuitable” 2.25% of firms - more than one third of cases “unsuitable” 3.7% of cases - “inadequate records” 4.Lack of compliance review & MI

6 Key Areas of Concern 1.Unnecessary Additional Costs (79%) 2.Not meeting Client’s Attitude to Risk (40%) 3.Need for ongoing review (26%) 4.Loss of benefits from ceding scheme (14%) Most files were unsuitable for more than one reason

7 Examples of Concerns Additional Costs 1.Investment flexibility not required / used 2.Improved performance not demonstrated 3.Stakeholder could have met client needs 4.Cost of consolidation not explained / justified

8 Examples of Concerns Not Matching Client’s Attitude To Risk. 1.Fund too risky / too cautious 2.Term to retirement not considered > influence asset allocation 3.Fund not diversified “all your eggs in one basket”

9 Examples of Concerns Ongoing Reviews & Loss of Benefits 1.Lack of Regular Reviews to maintain asset allocation to meet clients changing ATR 2.Loss of Benefits from ceding scheme: 1.Guaranteed Annuity Rates (GARs) 2.Guaranteed Basic Annuity 3.Basic sum assured 4.Guaranteed Growth Rates 5.Guaranteed Death Benefits

10 Pension Switching - Timescales Dec’08Feb’09March – June 09 Q onwards FSA written to 4,500 firms Pension Switching Roadshows Firms conduct review FSA Assess Firms

11 Action Required By FSA 1.Consider your approach to past pension sales 2.Take appropriate remedial action if failing identified 3.Consider if you need to change your approach 4.Does your MI tell you if you are delivering fair outcomes to your clients?

12 How to Undertake the Review 1.Project Plan 2.Inform your PI Insurer 3.Assess systems & controls 4.Identify population 5.Check % of cases (use FSA template) 6.Remedial action

13 Key Documents 1.FSA’s Pension Switching Paper (Dec 08) 2.FSA’s client file review template 3.Compliance Bulletins B171 & B173 4.Bankhall guide to Pension Switching 5.Bankhall’s Personal Pension Transfers / Redirection of Contributions Suitability Report Checklist (Appendix 1 Chapter 3A)

14 Pension Switching - Questions How worried are you about the pension switching review? Press 1 if you are very worried Press 2 if you are moderately worried Press 3 if you are not worried at all Please vote now

15 Pension Switching Question Would you like Bankhall to run a workshop on how to conduct the Pension Switching Review? Press 1: If you would like Bankhall to run a Pension Switching workshop Press 2: If you do not think you would benefit from Bankhall running a Pension Switching workshop Please vote now

16 Collective Responsibility - SYSC (Systems & Control Source Book) 1.W/E/F 1 st April 2009 CF8 (Apportionment & Oversight Officer) ceases 2.Common Platform extended to most firms 3.All Directors / Partners have equal responsibility for Apportionment & Oversight

17 Changes to Professional Indemnity Insurance (PII) Firms who are subject to the Insurance Mediation Directive (IMD), are subject to new PII limits:  Single Claim = Euros1,120,200 (approx £1M)  Aggregate = Euros1,680,300 (approx £1.5M) Policies entered into prior to 28 th February 2009 are valid until renewed or extended First City – Bankhall’s PII Offering

18 Compliance Update Questions? Lunch is Served - Enjoy


Download ppt "Presenter: Alison Smith Title: Compliance Update March 2009."

Similar presentations


Ads by Google