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shellsModern products provide valuations and benefit illustrations which can now be viewed at any time online. The investment choice also has been transformed, including competing fund managers, a much wider range of asset classes (including alternative assets), active or passive fund management, fund of funds and manager or managers, a growing range of Exchange Traded Funds and automatic rebalancing. At the same time, headline costs can be lower than old plans. This change presents a dilemma to advisers, as many clients will be stuck in a variety of older plans without these benefits but the compliance regime for justifying switching is rigorous and concentrates on cost comparisons which are often difficult to make given the huge variety of charging methods employed.

Until now, advisers have had little help in either systematically identifying all clients and plans suitable for upgrade or in calculating and presenting the client specific cost comparisons.

The December 2008 Thematic Review of Pension Switching Advise by the Financial Services Authority noted that few advisers passed with all the files reviewed and that 25% of firms were assessed as providing unsuitable advice in over a third of all their cases reviewed. One of the main reasons why advice was considered unsuitable was that extra costs were involved without good reason (79% of unsuitable cases). The FSA also noted that in 26% of cases the adviser failed completely to ascertain whether the new scheme was more expensive than the old scheme(s). The compliance principles which apply to any investment switching are unlikely to be materially different to those applying to pension switching.

To help adviser firms with an end-to-end and robust process for identifying all suitable clients, a sophisticated cost comparison calculation engine and compliant suitability reporting, Legacy Asset Systems Ltd is providing a new Asset Migration Service in conjunction with co-founding partners ITM, Dunstan Thomas and The Timebank, which for the first time brings all the necessary elements for the client asset upgrade process under one cost effective roof.

  1. Identifying the individual clients suitable for transfer to the new proposition:

    We undertake a Smart Search of the whole existing electronic client databank to identify, sort and segment clients who may be suitable for product or fund upgrade. Even assuming that current fund values are not immediately available, our report will provide a very good idea of;

    Value of total asset base using a benchmark valuation method
    • Who has the money by client
    • Who has the money by provider
    • Where is the money by product type
    • Potential to increase recurring income
    At the same time, elements of Data Quality are included to analyse the accuracy and provide missing information if required.

  2. Delivering a robust, TCF and compliant process for completing the upgrade, transfer or consolidation:

    An online calculation and illustration process produces personalised client reports showing a detailed cost comparison and suitability report. This includes a choice of cost comparison by reduction in yield. Cost comparisons include full costs (such as switching charges, normally left out in provider own RIY illustration) and IFA admin charges (also not included in provider illustrations). There is the option of a bespoke Para planning service for more complex cases saving time and underpinning the compliant process.

  3. Supporting the Business Transformation:

    By providing a complete change management process with support tools and services, we turn all of the practical obstacles into stepping stones on the journey towards the new business model for financial advice. Our unique end to end solution (or component parts) enables the move away from transaction based sales to a complete wealth management service with totally transparent remuneration derived from client fees and fund based income.