- What is your current process for pension switching? And what are the challenges?
Currently, for most Advisers it’s a very manual process as requests have to be made from multiple product providers for projections. Projections can often take weeks and weeks to arrive and no two providers seem to do projections on the same basis so it’s then up to the Adviser to make sense of the figures returned for a client’s individual report.
The other option is to use some sort of calculator that gives a reduction in yield figure – taking into account all costs associated with a clients’ portfolio. However, most such calculators on the market currently, only look at pension portfolios, rather than unwrapped investments such as bonds or ISAs.
- How will using the FE Analytics Reduction in Yield tool make your life easier?
The FE Reduction in Yield calculator is unique in that is allows for a reduction in yield calculation for any investment type, allowing an Adviser to demonstrate the effect of all charges on a clients’ portfolio. Ultimately it’s a much more transparent approach for consumers so they can see the true effect on their portfolio.
- Would this process work for all adviser firms or are there circumstances where running Reduction In Yield wouldn’t work as well?
Running reduction in yield calculations is likely to have to become the norm for all Adviser practices. Not only do Advisers need to provide these calculations pre-recommendation but also every year after the investment has been sold. You need to be able to reaffirm the suitability of the clients’ investment portfolio and to do that you will need to provide the ongoing impact of the charges deducted from their portfolio.
- Has Charles Stanley confirmed that using Reduction in Yield is a compliant process to follow when transferring investments?
Absolutely. It’s a massive timesaving tool as well. Those firms that still use projections from product providers are essentially waiting weeks for worthless projections which ultimately compromise their client relationship.
The Reduction in Yield calculator harmonises the whole process by being clear, transparent and comparable for any product type.