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Chartered / Accredited Financial Planning FirmTM status Question 1:
One of the criteria is that the firm must be Chartered or Accredited. Would you provide me with clarification as to whether we can apply based on:
1. I am the sole adviser here (Chartered and Certified)
2. The CII has agreed that there would be no additional value by making my firm Chartered
Answer:
After much consideration, we have decided that only advice firms that have Chartered status and/or are an Accredited Financial Planning FirmTM should apply. In order to manage a potentially very high number of responses we have had to ensure only those meeting the criteria are considered.
Also, it is important to NS&I that the successful firm is a good match with our brand values (see Requirements for Financial Advisory Service document for more details). As such, asking for the firm to have the status described is the best way for us to receive the necessary service assurance that we need.
We view the status as a form of advice ‘kitemark’, which demonstrates professional commitment to raising standards of knowledge, capability and best practice. It also tells customers that they can expect the highest quality of service.
It is important for NS&I to support these aims, and as the two forms of status are also widely recognised, they will resonate with both the advice industry and our customers.
Question 2:
It appears that only directly authorised firms can apply. As an Appointed Representative would I be ineligible to apply?
I can appreciate that firms that have a UK wide presence provide an advantage although perhaps there may be scope to allow smaller businesses to be able to offer services to winners located in each region of the country. Given the Government's desire to support and encourage smaller businesses I would hope this was an opportunity open to me.
Answer:
We understand the advantages of having a different advice firm in each region. However, this would be offset by an increase in management time and complexity in managing multiple relationships, rather than one covering all regions.
After much consideration, we have decided that only advice firms that have Chartered status and/or are an Accredited Financial Planning FirmTM should apply. In order to manage a potentially very high number of responses we have had to ensure only those meeting the criteria are considered.
Question 3:
We are an FTSE100 company that provides independent advice through a nationwide network of employed advisers. We do not have Chartered status as a firm nor are we an Accredited Financial Planning FirmTM.
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We currently have qualified advisers based throughout the country, all of who are Diploma level qualified, hold a current Statement of Professional Standing and are members of the CII. Almost half of our advisers are qualified to hold the Chartered Financial Planner designation.
Can you please let me know if we would be discounted in the tender process based on the above?
Answer:
After much consideration, we have decided that only advice firms that have Chartered status and/or are an Accredited Financial Planning FirmTM should apply. In order to manage a potentially very high number of responses we have had to ensure only those meeting the criteria are considered.
Also, it is important to NS&I that the successful firm is a good match with our brand values (see Requirements Response document for more details). As such, asking for the firm to have the status described is the best way for us to receive the necessary service assurance that we need.
We view the status as a form of advice ‘kitemark’, which demonstrates professional commitment to raising standards of knowledge, capability and best practice. It also tells customers that they can expect the highest quality of service.
It is important for NS&I to support these aims, and as the two forms of status are also widely recognised, they will resonate with both the advice industry and our customers.
Question 4:
Do you require the firm to have Chartered or Accredited Financial Planning FirmTM status or do you require the firm to assign advisers of this status to the NS&I contract?
This query is raised because this may prejudice the ability of the majority of larger firms to respond to the retender.
Larger firms by their nature will have larger populations of advisers and are likely to deliver a wide range of general and specialist advice services, as well as having the benefits of ‘big firm’ practices, compliance and corporate governance. Therefore while they may have a core population of Chartered or Accredited Financial Planning advisers, they are unlikely as a firm to be registered with these statuses. Given some of the other requirements within the
retender, such as national coverage through an office network and the inclusion of a recognition that larger firms may have chosen to have restricted rather than independent status, it seems unlikely that it is the intention to limit the response to the retender to smaller and medium sized firms.
Answer:
After much consideration, we have decided that only advice firms that have Chartered status and/or are an Accredited Financial Planning FirmTM should apply. In order to manage a potentially very high number of responses we have had to ensure only those meeting the criteria are considered.
Also, it is important to NS&I that the successful firm is a good match with our brand values (see Requirements for Financial Advisory Service document for more details). As such,
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asking for the firm to have the status described is the best way for us to receive the necessary service assurance that we need.
We view the status as a form of advice ‘kitemark’, which demonstrates professional commitment to raising standards of knowledge, capability and best practice. It also tells customers that they can expect the highest quality of service.
It is important for NS&I to support these aims, and as the two forms of status are also widely recognised, they will resonate with both the advice industry and our customers.
National coverage Question 5:
Is this a requirement for permanently manned offices, serviced offices with meetings rooms across the country or advisers who live in different locations across the country.
How many locations across the country are you requiring? London, Manchester, Birmingham...
Answer:
We are aware advice firms will have different propositions for how they service clients nationally. We are therefore looking for advice firms to demonstrate how they aim to meet the criteria of national coverage at short notice (e.g. where the firm’s branches are, where their existing clients are based, what type of premises they meet clients at, how many qualified financial planners they have, etc).
Provided that firms applying can clearly demonstrate that they meet the requirement to service customers nationally, we will not exclude firms who only have one or two of their own physical branches.
Ultimately we need to have the assurance that all our Premium Bonds jackpot winners can be looked after in the same way, irrespective of where they live in the UK.
Question 6:
One requirement is to have physical offices across the UK. We currently have two offices in the Midlands but have clients nationwide. We also use actual offices in other locations which are serviced offices so we do not own or rent them but do pay for their use as and when required.
Based on this, would we still be able to tender as we do not own or rent premises on a regular basis at a permanent address.
Answer:
We are aware advice firms will have different propositions for how they service clients nationally. We are therefore looking for advice firms to demonstrate how they aim to meet the tender requirement of national coverage at short notice (e.g. where the firm’s branches are, where their existing clients are based, what type of premises they meet clients at, how many qualified financial planners they have, etc).
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Provided that firms applying can clearly demonstrate that they meet the requirement to service customers nationally, we will not exclude firms who only have one or two of their own physical branches.
Ultimately we need to have the assurance that all our Premium Bonds jackpot winners can be looked after in the same way, irrespective of where they live in the UK.
Question 7:
I would be grateful if you would clarify the requirement in relation to having “... suitable qualified staff (Chartered and / or Certified Financial Planners) based at physical offices located across the UK….”. We only have one office based in the Midlands, but successfully operate throughout the country by hiring offices elsewhere as and when required. We have found this to be more suitable than having regional offices, as we can facilitate meetings closer to the required location than we could if we had, for example, ten regional offices. Answer:
We are aware advice firms will have different propositions for how they service clients nationally. We are therefore looking for advice firms to demonstrate how they aim to meet the tender requirement of national coverage at short notice (e.g. where the firm’s branches are, where their existing clients are based, what type of premises they meet clients at, how many qualified financial planners they have, etc).
Provided that firms applying can clearly demonstrate that they meet the requirement to service customers nationally, we will not exclude firms who only have one or two of their own physical branches.
Ultimately we need to have the assurance that all our Premium Bonds jackpot winners can be looked after in the same way, irrespective of where they live in the UK.
Exemplary regulatory record Question 8:
We are a relatively new company, having gained our FCA approval last year. However, section 6.1.4 stipulates that we must be able to demonstrate an exemplary regulatory record over the last five years. Does our infancy then deem us obsolete in terms of fitting your desired profile?
Answer:
For such a high profile service, we require advice firms to have a five year exemplary regulatory record, in order to provide us and our customers with the required service assurance.
We would hope those advice firms who cannot meet this criteria on this occasion may do so the next time we issue a tender for this service.
Question 9:
In the last three years we have paid out on Keydata under both the FSCS and FOS (where people wanted to claim more than the FSCS limits). I assume this does not preclude us as we haven’t paid any fines of any kind.
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This requirement is not in relation to fines specifically, it is about evidencing an exemplary regulatory record. As such, the example above would exclude the firm from this tender.
Setting up a bank account for the winner Question 10:
We don’t understand the anonymous bank account reference since this would surely cause anti money laundering issues? We can organise bank accounts with third parties if required, however we do not currently handle client money (although getting the authorisation wouldn’t be difficult)
Answer:
The Premium Bonds £1m jackpot winners may wish to remain anonymous, and so this requirement is to help retain their anonymity, i.e. they may not wish their usual local bank to be aware of the win, and thus require a separate account to be set up somewhere else. The money is transferred directly from NS&I to the relevant bank, so the advice firm doesn’t need to handle the client’s money.
The relevant bank will undertake AML procedures before opening the account, as per normal process, so AML is not an issue in this regard.
All of this reflects the existing process, and no issues have been experienced previously in relation to this requirement.
Question 11:
The question we have is related to: “The advice firm must be able to:
a) offer the facility to open an interest bearing, instant access account for the jackpot winner within the required timescales.
b) offer the facility to transfer funds into an anonymous bank account from the day after the winner is notified, if required”.
No Bank will receive funds into an account that had no “owner” of the account with full AML/ID in place. Although UK banking law does not permit anonymous accounts, firms can arrange to provide fiduciary accounts, allowing service points around the country. It is possible for a firm that has the authority to hold client money to offer anonymous accounts, but that would revert to a trust fund arrangement.
Therefore:
a) Is it okay for a 3rd party to be physically opening the account? – i.e. it won’t be the advice firm.
b) Please explain what you mean by anonymous accounts?. We would like an indication if there are solutions that would satisfy your requirement for anonymity that would be available via firms without a banking licence or the authority to hold client money.
Answer:
The Premium Bonds £1m jackpot winners may wish to remain anonymous, and so this requirement is to help retain their anonymity, i.e. they may not wish their usual local bank to be aware of the win, and thus require a separate account to be set up somewhere else.
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The money is transferred directly from NS&I to the relevant bank, so the advice firm doesn’t need to handle the client’s money.
The relevant bank will undertake AML procedures before opening the account, as per normal process, so AML is not an issue in this regard.
All of this reflects the existing process, and no issues have been experienced previously in relation to this requirement.
Fees template Question 12:
We are an hourly based advice company who charge the client for the person who is dealing with their affairs. A new client may have four different people (and four different fee rates) for instance we may need to check existing investments pensions etc, that would be done by a technician or Paraplanner. A new client would need to be added to our systems, again a Paraplanner or technician may do this. The report needs checking by a second adviser who may charge a different rate than the more senior adviser who wrote the report.
Section (6) is for “other costs” - perhaps we should input our estimate for the writing of the report in (2) and all other typical costs in (6)?
Incidentally we are well versed with providing clients with estimates and have our own spreadsheet which lists the work needed and the person to do it. I suspect however you are trying to standardise this process so you would not be interested in such background
information.
We as a standard practice provide cash flow forecasts as part of the initial and annual review process. Do we say “Free” or reduce options 2 and 5 by the cost of 3?
Review meetings may be necessarily monthly, quarterly, every six months or yearly it really depends upon the client however I assume you are looking for a face to face meeting rather than a phone call or email?
Our annual advice charges depend on whether the client is happy to pay hourly or whether they prefer a % of the fund value. As we don’t know what if any of the £1 million will be invested into asset backed investments (the client may be best to invest in cash, NS&I, residential homes, gifts to children etc etc) do we just assume the whole £1 million is invested with us? (unheard of).
Answer:
We are aware that there are many different ways in which advice firms charge for their services, especially as a result of the Retail Distribution Review.
However, we do not have the resource to try and compare lots of different pricing models. Therefore we have just asked firms to supply details of their charges for the most common parts of the planning process, e.g. meetings, reports, etc.
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Therefore, please complete the required sections of the Fees Template as best as you can, and feel free to supply any supplementary information that you think would help your application in section 6.
Regarding your specific questions:
If you usually include cash flow forecasting in other costs (e.g. review meetings) - please calculate a specific cost for cash flow forecasting and reduce costs in sections 2 and 5 accordingly
The meetings referred to should be face-to-face meetings
For the purposes of this exercise, please assume the whole £1m will be invested through you
Ultimately we need to be able to compare firms’ pricing models on a like-for-like basis, and so please bear this in mind when completing the Fees Template.
Application process Question 13:
Further to the email I have received regarding the tendering for the financial advice contract, I apologise but I am slightly confused as to the requirements/forms that you require for this process. Any guidance would be greatly appreciated.
Answer:
The ‘Requirements for Financial Advisory Service’ document on the NS&I Adviser Centre website explains what information you need to provide, and the process to follow, should you wish to respond to this requirement.
Question 14:
We would like to apply for the tender to give advice to the Premium Bonds Jackpot winners. I have downloaded the Fees Template and completed this quite quickly, please could you confirm if there is anything required from us to apply?
Answer:
The ‘Requirements for Financial Advisory Service’ document on the NS&I Adviser Centre website explains what information you need to provide, and the process to follow, should you wish to respond to this requirement.
