This article provides a step-by-step guide as to how you can quickly and easily write a defined benefit pension transfer suitability report using Genovo.
1) Select or add the client
Go to Write report and select or create the 'Private client' you wish to write the report to.
2) Select the Report Creation Method
3) Create the report
In Report Details, give the report a name and select the Report Type. If you're creating it 'from scratch', we'd suggest using the Suitability Report.
4) Add the required sections
You’ll then be directed to the Report Builder where you should add the necessary sections from the 'Available sections' drop down , which in this instance are:
- Cashflow Modelling: DB Pension Transfer - This can be used to fulfil the requirements of the APTA. We would typically suggest that this is added at the start of the report after the Client Risk Profile section as it helps set the scene for the recommendations that follow.
- Review of Your Existing Pension Plans
- New Pension Recommendation (if the client is still in the accumulation / pre-retirement phase) OR Drawing Benefits from Your Pension Fund (if the client's in the decumulation / at-retirement phase and wants to start drawing benefits via drawdown for example)
- Recommended Investment Strategy
5) Complete all section wizards
Next you'll need to step through the section wizards of all the sections that require your input, starting with the Introduction section.
6) Complete the Introduction section
You will progress through the steps of the Introduction section in the usual way. When you reach the Client Objectives step you should select or add the advice option(s) that accurately reflect the client's objective(s) and add comprehensive Know Your Client (KYC) information to ensure you fulfil the regulator’s expectations of you in terms of documenting a client's objectives. Alternatively, you can add the client's objectives as free text.
7) Complete the Client Risk Profile section
It's in this section that you will confirm the client's attitude to risk and capacity for loss, as well as their knowledge and experience and any investment preferences.
8) Complete the Review of Your Existing Pension Plans section
You’ll be prompted to provide information regarding the existing DB pension within the Plan Summary step of the review section.
In the Recommended Action step, you will need to confirm what action you are recommending in respect to the plan, which in this case could be:
- Transfer - You are actively recommending that the client transfers to a money purchase pension plan, but no benefits are to be taken immediately.
- Transfer and draw benefits from - You are actively recommending that the client transfers to a money purchase pension plan, and starts to draw benefits immediately (via drawdown for example).
- Remain in the scheme but you insisted on transferring - For use with insistent clients who want to transfer their DB pension to a money purchase pension plan but no immediate tax free cash or income is required. *
- Remain in the scheme but you insisted on transferring and then drawing benefits from - For use with insistent clients who want to transfer their DB pension to a money purchase pension plan so benefits can be taken immediately (via drawdown for example). *
* Selecting either of the third or fourth recommended actions above will automatically insert the insistent client warning text in your report.
You will also be prompted to summarise the research you have carried out, and the discussions that have taken place between you and your client regarding the provision of death benefits; as well as include details of your Transfer Value Comparator analysis.
Finally, you can confirm any disadvantages associated with the recommendation being made in the Key Disadvantages and Tax Implications step.
9) Complete the relevant recommendation section
It is within the recommendation section that you will be prompted to provide details of the new money purchase pension plan you are recommending.
If benefits are to be taken immediately (e.g. via drawdown) you should complete the Drawing Benefits from Your Pension Fund section. If no immediate tax free cash or income is being taken and the pension fund is being left to accumulate (within a PPP or SIPP for example) then it's the New Pension Recommendation section.
10) Complete the Recommended Investment Strategy section
Within this section you'll be prompted to confirm the fund(s), model portfolio or DFM that you are recommending the client invests into via the new money purchase pension plan that you've recommended in the previous recommendation section.
11) Complete the Important Information section
This is the last section you'll need to complete and is self-explanatory.
12) Tailor the structure of the report
Having completed all of the section wizards you should then tailor the structure of your report by unchecking any sections you do not wish to include in your report; and then change the sort order of any sections to reflect your personal preferences.
You’ll find more information about how to remove sections from your report here.
You'll find more information about how to reorder the sections in your report here.
13) Download the report / covering letter
Click the Download report / Download cover letter icon and the report / covering letter will download to word.
On opening the report you'll notice the report follows the typical Genovo format and structure. However, there will be a few bits within the Attitude to Transfer Risk, Review of Existing Pension Plans and the Appendix - DB Pension Transfer Value Analysis sections that will require a bit more input and editing from you. Simply follow the accompanying user instruction, make any necessary edits and that's it, you’re done.