1. No 1 Harley Street, London W1 www.sterlingandlaw.com
February 2018
No 1 Harley Street, London W1

2. Agenda The interim client report Client reviews under MIFID II
DB cases – what is the regulator looking for?
Guest Ian Hunter, Thesis

3. The interim client report
How to position the interim report / discussion document
Purpose?
When completed?
Time taken?
When presented?
Fee charged?
Contents of the interim report

4. Positioning FCA is not a fan of contingency charging.
To address this, a firm should charge for advice and should not depend on the purchase of a product for payment.
To manage client expectations, the interim report and fee structure should be mentioned at outset; i.e. when the appointment is made.
This will give the client(s) an understanding of our sales and fee charging processes.

5. Purpose?
A recap of the client’s financial position, objectives and goals.
An opportunity to focus on the potential solutions to their financial issues.
A brief, easy to understand summary of your advice and reasons why.
A presentation of options.
An opportunity for your client to show commitment.

6. When completed, time taken, when presented?
Completed between the factfind and presentation meeting(s).
Should not take more than a couple of hours to produce.
To be presented at the second / presentation meeting accompanying application forms and presentation documentation
Minimum fee £500.00

7. Contents
Summary of current position, objectives, requirements and goals
Financial health check results where appropriate
Attitude to risk and capacity for loss
Summary of any existing plans
Product(s) recommended and why
Product charges and adviser fees

8. Contents Cashflow modelling for at retirement clients Recommendations
Product and provider rationale
Risk warnings

9. Let’s look at some examples

10. Client reviews What services are available to Premium clients?
Annual reviews
Meetings with their DFM
Face to face reviews when required
Ongoing support and advice via and telephone
Proactive advice on allowances, legislation changes and personal financial targets
Goal setting, tracking and performance monitoring
Quarterly newsletter

11. Client reviews What do your Premium clients want most? Annual reviews
Meetings with their DFM
Face to face reviews when required
Ongoing support and advice via and telephone
Proactive advice on allowances, legislation changes and personal financial targets
Goal setting, tracking and performance monitoring
Quarterly newsletter

12. Client reviews
Have you asked them what they want?

13. Client reviews Additional requirements under MIFID II
Aggregated costs and charges illustration issued to client where available
Notification of 10% drop in value since last quarter (DFM portfolios only)
Use new client review template
New review checklist
Intelligent Office reports
Suitability reports for reviews (to come)

14. Switches Additional requirements under MIFID II
When arranging a switch advisers must first produce an illustration using the new fund and to client asking them to confirm their understanding of any difference in charges BEFORE the adviser can instruct the switch.

15. Top ups Additional requirements under MIFID II
Advisers must as a minimum create a file note which identifies any changes in client circumstances, ATR, fund choices and acceptance of fund charges
File must also contain the client instruction, the illustration, IDD and KID(where available) as a minimum
Advisers may choose to write a short suitability report if they feel such is required

16. New MIFID II jargon
PRIIPS

17. New MIFID II jargon
PRIIPS
Packaged retail investment and insurance-based products

18. New MIFID II jargon
PRIIPS
Packaged retail investment and insurance-based products
Packaged retail investment and insurance-based products (PRIIPs) make up a broad category of financial assets that are regularly provided to consumers in the European Union (EU) through banks or other financial institutions as an alternative to savings accounts.

19. New MIFID II jargon
MIFID

20. New MIFID II jargon The Markets in Financial Instruments Directive

21. New MIFID II jargon The Markets in Financial Instruments Directive
(MiFID) is the framework of European Union (EU) legislation for: investment intermediaries that provide services to clients around shares, bonds, units in collective investment schemes and derivatives (collectively known as 'financial instruments')

22. New MIFID II jargon
KID

23. New MIFID II jargon
KID
Key Information Document

24. New MIFID II jargon Key Information Document
KID
Key Information Document
KIDs will be uniform disclosure documents providing standardised information about PRIIPs in a way that is designed to give retail investors sufficiently clear, comparable information on the range of products available. The European Commission hopes this will increase competition, as well as boost transparency for investors.

25. New MIFID II jargon
KIID

26. New MIFID II jargon
KIID
Key investor information document

27. New MIFID II jargon
KIID
Key investor information document
The KIID is a two-page 'fact-sheet' style document which includes the critical information about a fund or ETF.

28. DB transfers
Update from Chris Wells