MIFID ISSUES

1
Welcome
2
Organisation

• Fire Exits
• Fire Drill
• Toilets
• Coffee 11.15
• Lunch 12.45
• Questions as we go

3
Who we are

• Keith Wrightson
• Associate of the Pensions Management Institute
  APMI
• Associate of the Chartered Insurance Institute
  ACII
• pensions route
• Fellow of the Personal Finance Society FPFS
• Tim Hackett
• DipPFS and specialist pension exams.
• Former Pensioneer Trustee NAMULAS Pension
  Trustees

4
Why We Are Here

• Pensions thematic review April 2008 Financial
• Various points raised to be addressed
• This is not a detention class!
• But Financial internal survey found various
  training issues
• This session is intended to enable you to gain
  full value from your Network membership and fees

5
Objectives
To identify the evidence currently needed to be
held on file in support of a pension switch
to- Meet COBS rules Meet TCF needs Satisfy an FSA
visit/ check Win at FOS, ie successfully rebut a
complaint
6
What we will cover

• FSA rules on pensions review
• TCF
• What makes a Compliant File
• Case Studies
• Test
• What next

7
Why
-FSA Avoid Fines and remedial work Avoid Losing
complaints
8
FSA
-The firms recommendations were unwarranted as
the customers existing pension arrangements were
adequate and a transfer to a new product was
neither required nor requested
9
FSA
-The firms recommendations failed to take into
account ATR financial profile and their
objectives
10
FSA
-to benefit from wider choice of funds or
investment flexibility that does not match
customers objectives and was not sought by them.
11
FSA
to transfer to more speculative funds which
did not match ATR
12
FSA
-in some cases Stakeholder funds would have been
more appropriate but were not considered
13
FSA
-advised to switch to products that needed a
higher growth rate to achieve parity with an
existing plan and risk warnings were not
sufficient.
14
FSA
-Costs of switching to new contract with less
favourable terms
15
FSA
ANNUITIES!!!!!!!!! The firm also made some
recommendations for pension annuities that did
not fully consider taxation issues or the use of
impaired life annuities.
16
FSA
The FSA considers that the firms disclosure of
the risks and costs associated with the
recommended products was on occasions incomplete,
inaccurate and as a result may have misled
customers because 4 reasons!!! Follow!!!
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FSA Fail to provide-
1 -full or correct product description
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FSA Fail to provide-
2a -costs charges penalties 2b charges fees
less favourable terms at point of sale
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FSA Fail to provide-
3 like for like comparisons between the ceding
scheme and the new product. They also failed to
provide illustrations and projections under the
new plans which would have enabled customers to
make an informed decision.
20
FSA Fail to provide-
. 4 Illustrations were sometimes flawed and
therefore potentially misleading as they were
based on erroneous and not like for like
comparisons (ie based on wrong charge
calculations or not taking account of penalties).

21
FSA- Fail to record information-
1 Up to date personal details 2 retain copy of
product illustrations provided 3 records of
contact with customer 4 research 5 risk warning
and charges 6 clear rationale in Suitability
Letters
22
How we will meet our objectives
Presentations experienced practitioners and
advisers Workshop case studies
23
How we will meet our objectives

• Compliant File minimum requirements
• Fact Find
• Attitude to Risk
• Soft Facts
• Research existing products
• Research- Stakeholder
• Research- other solutions
• Suitability Report