This article specifically provides a step-by-step guide as to how to write a suitability report recommending the purchase of a guaranteed lifetime annuity from an uncrystallised pension fund. If you want to write a suitability report for a crystallised pension plan, this article will guide you through how to do so.

1) Select or add the client

Go to Write report and select or add the client to whom you wish to write the report.

2) Select the Report Creation Method

For completeness, this article walks you through the steps of building a report 'from scratch'. However, it is worth bearing in mind that there is already a Genovo template covering this advice scenario: ‘Genovo Example: Take benefits from an uncrystallised pension fund via a guaranteed lifetime annuity’ and a preconfigured advice scenario ‘Take benefits from an uncrystallised pension fund via an annuity’ to save you time and help further speed up the report creation process for you. 

3) Create the report

In Report Details, give the report a name and select the report currency and Report Type, which in this instance will be Suitability Report. You may also wish to include a Report Reference.

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:

  • Review of Your Existing Pensions.
  • Drawing Benefits from Your Pension Fund.

5) Complete all wizard sections

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

Progress through the steps of the Introduction section in the usual way.

a) Client Objectives step

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.

b) Overview of Existing Provision step

The other step of particular note in the Introduction section is Overview of Existing Provision. You can use this step to provide a brief overview of any existing arrangements the client already has in place that could, in whole or part, help meet their stated objective(s).

Therefore, given the advice scenario, this would be an ideal place to include a brief overview of any other pension arrangements, investments or other sources of income that are being, or could be used to meet the client’s income needs in retirement.

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

Here is where you’re going to include some basic information about the existing uncrystallised pension plan(s) from which you’re recommending benefits are taken.

a) Plan Summary step

Remember you don’t have to enter a value for all fields in the Plan Summary step, and fields which are left empty won’t be included within your report. Given the advice scenario, I certainly wouldn’t waste time creating a Current Investment Strategy for the plan(s) you include here.

b) Money Purchase Pension Benefits & Features step

It is in this step that you should summarise any pertinent benefits and features of the existing pension plan(s). For example, this would be an ideal place to include details of any tax-free cash entitlement in excess of 25% or guaranteed annuity rates that the existing plan may benefit from – especially if these will be lost on transfer.

c) Recommended Action step

In the Recommended Action step, you will need to confirm what action you are recommending in respect to the plan(s), which in this case will be either:

  • ‘Take benefits directly from’ – If you are purchasing an annuity with the existing provider; or
  • ‘Take the open market option and vest’ – If you are purchasing an annuity with a different provider.

9) Complete the Drawing Benefits from Your Pension Fund section

It’s within this section that you’re going to include details of the guaranteed lifetime annuity that you’re recommending the client uses to draw benefits from their pension fund. You will need to complete this section irrespective of whether benefits are being taken via the existing provider, or a new provider via an open market option.

a) Plan Summary step

Much like the review section, it’s in this step that you’re going to include details of the new annuity plan that you’re recommending. Remember you don’t have to enter a value for all fields in the Plan Summary step, and fields which are left empty won’t be included within your report.

It is also worth remembering that although this article assumes benefits are being taken via a guaranteed lifetime annuity, Genovo also caters for:

  • Enhanced / impaired life annuities;
  • Fixed term annuities; and
  • Investment-linked annuities.

b) Why Withdrawal step

This step has been designed to allow you to confirm the reason(s) why the amount and type of withdrawal has been recommended. Clearly, the reasons selected here should relate closely to the client’s needs and objectives.

c) Annuity Options & Benefits step

This is a conditional step that is triggered when an annuity is selected in the Plan Summary step. It’s here you should confirm the basis on which the annuity plan is being established and why you are recommending the selected basis.

10) Complete the Important Information section

This is the last section you’ll need to complete and is self-explanatory.

11) 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.

12) Download the report / covering letter

Click the Download report / Download cover letter icon and the report / covering letter will download to word.

Report template

Having created the report, you may then wish to convert it into a template and save it to your Report Template Library to use as a starting point for creating future annuity reports.