This article provides a step-by-step guide as to how you can quickly and easily write a suitability report confirming your recommendations for your client to use a SIPP or SSAS to purchase a commercial property.
Select or add the client
Go to write / view report and select or create the client you wish to write the report to. This could, depending on the circumstances, be an individual, corporate or trust client.
Create the report
In the Report Details page, give the report a name and select the Report Type. If you're creating it 'from scratch' we'd suggest using the suitability report. On clicking save you'll be directed to the Report Builder, where you can add the required sections.
Adding the required sections
You now have 2 options depending on the advice scenario:
- If the existing pension scheme remains suitable for the client and allows them to purchase commercial property directly, then you'll need to add a Review of Your Existing Pension Plans section and a Recommended Investment Strategy section.
- If the existing pension scheme doesn’t allow your client to invest directly in commercial property, you will need to switch to a pension that does. In addition to the Review of Your Existing Pension Plans and Recommended Investment Strategy sections, you will also need the New Pension Recommendation section.
Complete all section wizards
Introduction Section - Progress through the steps of this section in the usual way. In the Client Objectives step there is a standard objective - ‘Purchase a commercial property using your pension fund’ - that should be selected. This will ensure that the necessary risk warnings and tech notes are triggered and included in your report. As with any Client Objective you select or add here, you should add comprehensive KYC information to add extra "colour and detail" and ensure you fulfil the regulator’s expectations of you.
Review of Your Existing Pension Plans - The first step of this section is the Plan Summary step. It’s here that you’ll need to add details of the existing plan(s) being reviewed.
Later in the section, for each pension added in the Plan Summary you will need to select a Recommended Action. Given it is only possible to purchase commercial property through a SIPP or SSAS, if either is selected as an existing plan, an additional option - ‘purchase a commercial property with’ - is available in the Recommended Action step for use when you are using the existing plan. You should then click on ‘select advice reasons’ where you can select some of the standard property specific advice reasons available, or add some of your own, to justify your advice.
If you are recommending a switch to a new pension that allows commercial property purchase, you will need to select the Recommended Action of ‘switch’. When clicking on ‘select advice reasons’ after selecting ‘switch’ you will be able to select the standard advice reason ‘This plan does not allow you to purchase commercial property and therefore cannot meet your objectives’. You can add any further advice reasons if required.
NB. Selecting either of these options in the Recommended Action step will also trigger the inclusion of the property purchase risk warnings and tech notes in your report.
New Pension Recommendation (Only required if switching to a new SIPP or SSAS) - It is within the recommendation section that you will be prompted to provide details of the new SIPP or SSAS you are recommending.
Recommended Investment Strategy - Within this section you'll be prompted to confirm the client's attitude to risk, capacity to loss and to provide details of the property being purchased. When you reach the Recommended Investment Strategy step you'll need to click ‘create new investment strategy’ and giving it a suitable name e.g. 'My ABC Company SIPP Investment Strategy'. You should then click ‘add new investment’ to add details of the property being purchased. The Investment Name could be the name of the property or the first line of the address and under 'amount' we'd suggest you include the purchase price of the property in monetary terms.
It is also common place to hold some cash in the pension and this can also be added as a new investment within the existing investment strategy. Once added the table may look something like the one below.
When clicking the arrow to move forward you are returned to the first screen of the Recommended Investment Strategy step where you are prompted to ‘select why investment strategy’. A number of standard options relating to property purchase are available for selection, but remember you can add any further reasons as required.
Important Information - This is the last section you will need to complete and is self-explanatory. There are a couple of things to point out though. In the Supporting Information step there is the option to confirm you have included a property guide from the pension provider. This will give further detail about the purchase process and how the property will be managed and administered going forward. In the Next Steps step there are a number of property purchase specific advice options for selection. Again these can be edited or added to as required.
5) Download the report
Click the download report icon and the report will download to Word. On opening the report you'll notice the report follows the typical Genovo format and structure.