The four Genovo review sections in Genovo’s Report Builder (investments, pension plans, retirement income plans and protection plans) are designed to allow you to list a client’s existing plans. Many advisers use the review sections to only record the plans on which they are making recommendations, but quite a few advisers tell us that they want to add all the client’s plans to the relevant review section and not just the plans on which recommendations are being made.
Should you wish to include all of a clients plans to the review sections, it should be noted that the process of adding plans is much easier if your Genovo account is integrated with your back-office system. Genovo currently integrates with intelliflo office, Xplan and Curo, with more in the pipeline.
For example, let’s take a fairly common scenario of a couple, each with two pension plans, one of which is a deferred DB scheme. This is what it might look like in the Plan Summary step of the Review of Your Existing Pension Plans section.
When any plan is entered into a review section, after the Benefits and Features step and the Charges step, you’ll arrive at the Recommended Action step. It’s here that you make a recommendation for the plans and it’s here that you need to be really careful with a DB scheme. Clearly, it’s easy to select a Recommended Action of ‘retain’ for any plan that you’re advising the client to continue with
So what’s the problem?
Given that you’ll probably be happy to select a Recommended Action of ‘retain’ for any money purchase plans (especially workplace schemes), it’s tempting to do the same for the DB scheme. However, I suspect that your compliance department might not approve of this approach, because to select ‘retain’ could be construed as having given advice. As we all know, DB advice cannot be given lightly and certainly can’t be given without considerable research and analysis.
There isn’t a Recommended Action of ‘no recommended action’ in Genovo, so what can you do to stay on the right side of your compliance team? There are two possible solutions:
1. Skip the Recommended Action for the DB scheme
If you want to include the DB scheme in the Plan Summary step for completeness or because there’s already quite a lot of information in your integrated back-office system, the solution to not being seen to have made a recommendation is really simple – don’t select a Recommended Action! Just leave the plan with ‘select recommended action’ in the DB plan row and Genovo is then smart enough to know that there’s no advice being given on the scheme, and nothing will appear in the report.
This is a great way for the DB scheme details to be grouped with the rest of the client’s pension provisions and therefore makes it easier for the client to read, but you avoid appearing to have advised the client to stay in the scheme.
2. Don’t mention it…
The second solution is simply not to include the DB scheme in the Plan Summary step of the Review of Your Existing Pension Plans section. This clearly means that it won’t appear in the Recommended Action step, so the problem of ‘giving advice’ is avoided.
However, you’ll probably still need to make it clear that you’re aware of the scheme but that you are not making any recommendations. You should therefore include it in the Overview of Existing Provision step of the Introduction section (if you’re using a Suitability Report type), as follows:
By adopting this approach, you’ve clearly demonstrated to the client (and your compliance department) that you’re aware of the client’s DB scheme and that you’ve incorporated it into your financial planning recommendations. However, it is completely clear that you haven’t advised on it.