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Top tips for advisers on transferring legacy assets

A group of experts, including several advisers, a high profile paraplanner and the respected Lang Cat consultancy have offered their top tips for advisers transferring legacy platform assets in a new guide, published today (16 June) by Aviva.

The first of a series of guides to be published by the firm, the paper is designed to help advisers identify the stages to consider to successfully carry out compliant asset transition, as transfers are expected to ramp up ahead of a sunset clause of legacy rebates in April 2016.

Phil Ralli, head of platform propositions at Aviva, said he expects the level of change over the last 18 months to accelerate as “we move closer to the end of legacy cash rebates in 2016”.

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Julie Wilson, a director of Pen-Life Associates, notes in the guide that advisers need to ensure their service proposition is “properly” defined as well as defining a clear investment process and completing platform due diligence.

She added that advisers must confirm that they cannot satisfy clients’ needs by “simply modifying the existing offering” in order to avoid claims that a costly transfer was not in a client’s interest.

Her eight-point checklist for advisers includes whether you have:

• defined your service proposition properly;

• considered and defined your investment process;

• completed your platform due diligence;

• confirmed that you can’t satisfy your clients’ needs by simply modifying your existing offering;

• experienced the platform;

• checked it actually does what it claims to do on paper;

• defined the resource required and made this available; and

• built an asset migration plan

Damien Davies, a director of The Timebank, added a further checklist to ensure that client files meet FCA requirements, including: defining what will be produced for clients; what will be included to satisfy both the client and the regulator, and defining what will be kept on file and how it will be stored.

He added that, in their experience, the regulator “does not want a compliant report... it wants a compliant file”.

According to Mr Davies, the file should contain four sections:

1. an outline of who the client is and what they want to achieve;

2. your understanding of their objectives and the priority they place on each;

3. solutions for each objective, without using jargon or phrases that “simply absolve you as their adviser from any responsibility”; and

4. the action you advise them the take and the implications of actions, with a “solid plan of action” highlighted by “breaking this down into product or tax wrapper and closing with a table showing individual actions, timescales and responsibilities”.

In his section, Mark Polson, principal of the Lang Cat, emphasised that the common theme running through the guidance is that short-cuts cannot be taken and it should be focused on the need for thorough research and a fact-based comparison between a current investment and its replacement.

His checklist includes documenting the approach, reviewing the approach in line with FCA guidelines and satisfying your compliance team with your approach.