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Advisers have many options they can
take where they need additional help
and support on estate planning and the
use of BPR.
INVESTMENT REVIEWS
AND SOURCING PRODUCTS
The task of researching the whole-
of-market, shortlisting products and
carrying out due diligence checks
looks like a very demanding one at first
glance, but there are resources out
there to help advisers.
Tax Efficient Review
and Tax Shelter Report
There are two very well established
companies that review a number of tax
efficient investments. They have a long
track record of providing independent
reviews of these products and have a
deep understanding of the providers
who operate in this market.
MI Capital Research (MICAP)
A newer player, MICAP has a detailed
cloud-based database of current and
recent BPR products (and EIS, SEIS and
VCT), enabling advisers to research
the whole of market in a thorough and
efficient manner when conducting their
due diligence. The MICAP Fund Finder
enables the adviser to search, filter and
compare products, build portfolios and
record/document their choices, helping
with compliance and administration.
MICAP has also started to write and
publish their own reviews on the
investments and managers.
Use of these services can take some
of the weight off advisers’ shoulders,
making it much easier to apply
investment criteria to narrow down
the investment universe, draw up a
shortlist, review the products in detail
and keep an audit trail of the product
selection process.
PROVIDER SUPPORT
In common with most areas of financial
services, the product providers support
advisers and intermediaries as part of
their business development and sales
process. Seminars and briefings are
held nationwide, often accredited for
CPD and supported by media partners,
distributors or other firms who can
deliver an audience of advisers.
Advisers’ feelings about the quality of
these events varies (often depending
upon how explicit the sales pitch is!), but
they are usually short and free of charge
and represent a good opportunity for
advisers to meet with the providers and
build a relationship.
OTHER PROFESSIONAL
SERVICES
A recent Retirement Planner survey
found that 75% of advisers had
relationships with other professional
services firms such as accountants and
solicitors, and estate planning which
incorporates wills, legal trusts and tax
issues is one area where there is likely
to be a lot of overlap between the three
professions - thus good relationships
with other firms can be a source of
mutually beneficial referrals.
QUALIFICATIONS
Post RDR all advisers have to be level
four qualified as a minimum and those
qualifications will touch upon estate
planning, but it tends not to be covered
in depth unless advisers choose to
specialise. Qualifications tend to be
based around wills, power of attorney,
tax and trusts - BPR is not usually
specifically covered.
PROFESSIONAL INDEMNITY
COVER
It might be argued that advisers should
at the very least have an awareness of
BPR investment products if they are
going to remain independent (although
there are conflicting views on this as
BPR is not a Retail Investment Product),
and if they do recommend them then
they will need PI cover of course.
As unquoted, specialist investments,
they will be considered riskier by
insurers and may be bracketed with
more esoteric investments such as UCIS
- certainly this seems more likely for
the non-AIM based solutions that look
much further away from the standard
retail investment products insurers are
familiar with. This might mean higher
excesses, higher premiums or more
difficulty finding cover - but specialist
brokers do exist to help advisers in this
situation.
What is absolutely key is to be certain
to notify the PI provider if BPR products
are a new solution being recommended
for the first time - failure to do so could
be viewed as non-disclosure and an
excuse not to pay out if a claim did arise.
For compliance purposes, and therefore
to validate any existing PI cover,
advisers will be required to document
and evidence the research and due
diligence they have undertaken when
selecting the products for their clients,
justifying their recommendations.
Whilst restricted advisers within
networks may refer to a panel or a
recommended short list of products
prepared by their networks, IFAs
will have to research the “whole of
market” and evidence this. With the
popularity of BPR products (and other
tax efficient products generally) rising,
this does create a significant burden for
the adviser to stay abreast of what is
available in the marketplace.
From a PI insurance point of view, some
advisers may not be aware there is no
exemption from the requirement for
IFAs to consider all products simply
because they cannot obtain cover. It
might be a little alarming but the firm
would be required to self-insure the
risk for negligence on BPR investments
if they are unable to find or afford
appropriate PI insurance.
RESOURCES AND SUPPORT
