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Guide to the Sunset Clause

    CPD
    Approx.40min
    Guide to the Sunset Clause

    Introduction

    The rules for legacy payments to platforms, commonly known as the ‘sunset clause’, come into force on 6 April 2016.

    Changes to ‘legacy’ business will require platforms to have access to clean share classes or to be able to pass on any continuing payments they receive from providers to clients in full in the form of small cash rebates or unit rebates from next April.

    Some industry experts have raised concerns about potential price pressures that may arise in the market as platforms try to balance changing charges while maintaining a level of profitability.

    That is why it is vital advisers understand how charging is changing and whether the platform you use today will be able to continue to grow and pass on reduced charges to your clients.

    This guide will explore the move towards clean share classes, how to raise the subject of a unit conversion with your clients and deciding whether switching or converting is best for them.

    Supporting material produced by the Financial Conduct Authority; Lee Coles, head of money after work at Jelf Group; Parmenion; Paul Boston, sales director of Novia; Barry Neilson, business development director at Nucleus; and Alistair Wilson, head of retail platform strategy at Zurich.

    In this guide

    CPD
    Approx.40min

    Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

    1. What does Mr Wilson say can hinder the re-registration process?

    2. What does Mr Neilson say advisers should consider about platforms that are making a loss?

    3. If a client objects to a conversion, can they continue to have their funds held in the bundled class?

    4. Does a recommendation to a direct unit holder to convert to the clean unit class, constitute advice on investments?

    5. How much of an unnamed platform’s income came from rebates in 2013, according to Mr Boston?

    6. According to Parmenion, how much will a typical advisory business see of its revenues as trail?

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