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Tenet rolls out capital adequacy calculator

Tenet has launched a capital adequacy calculator to enable IFAs to determine the provision they need to make ahead of first phase implementation of the new regulations on 1 January 2014.

The tool is launched following the Financial Conduct Authority increasing adviser firms’ capital adequacy requirements to £20,000 by the end of 2015.

The calculator - together with detailed guidance Tenet has issued alongside it - allows firms to identify and understand the basic requirements and which of the two options is required.

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Based on a spreadsheet, it will assist advisers in understanding what constitutes ‘fixed expenditure’ and whether or not IFAs need to be looking beyond the new minimum threshold of £20,000.

Helen Turner, distribution and development director of Tenet, said: “Having been deferred for two years to allow firms to deal with the [Retail Distribution Review], there are now only five months to go until the new rules and transitional arrangements come into force.

“This new tool will enable advisers to establish the minimum capital resource applicable to them. We envisage it will prove particularly useful for those firms who will be contending with the issue for the first time, especially as the last few months tick away.

“And even though it is a staged implementation programme, we are recommending that they set aside provision for the full amount as soon as possible.”

Simon Lunn, operations manager for Oxford-based Focus Independent Financial Advisers and Independent Insurance Consultants, described the new tool as “particularly useful”.

He said: “The calculator will help firms understand the expenditure-based requirement in order to prepare for the pending increases that look set to affect the whole industry.”

Tenet has prepared the calculator for its directly authorised members as for network members, the network holds the capital on their behalf.