SUP 16 Annex 18B Notes for Completion of the Retail Mediation Activities Return ('RMAR')

APF

Authorised professional firm

AR

Appointed representative

54

CASS

The Client Assets sourcebook, part of the Handbook

COBS

The Conduct of Business sourcebook, part of the Handbook

CREDS

The Credit unions sourcebook, part of the Handbook

DISP

Dispute resolution: Complaints sourcebook, part of the Handbook

EEA

The European Economic Area

ICOB

The Insurance: Conduct of Business sourcebook, part of the Handbook

50IDD

The Insurance Distribution Directive

IMD

The Insurance Mediation Directive

IPRU(INV)

The Interim Prudential sourcebook for investment businesses, part of the Handbook

ISD

The Investment Services Directive

LTCI

Long term care insurance

MCOB

The Mortgages and Home Finance: Conduct of Business sourcebook, part of the Handbook

MiFID

The Markets in Financial Instruments Directive

MIPRU

The Prudential sourcebook for Mortgage and Home Finance Firms, and Insurance Intermediaries

PII

Professional indemnity insurance

RMAR

Retail Mediation Activities Return, i.e. the information requirements to which these notes refer.

SUP

The Supervision manual, part of the Handbook

TC

Training and Competence, part of the Handbook

Prudential reporting requirements

Section A (balance sheet)

Section B (profit & loss)

Section C (client money)

Section D (capital requirements)

Threshold conditions

Section E (professional indemnity insurance)

Section F (save in relation to questions about approved persons)

Training and Competence

Section G

Adviser charges

Section K

Commissions (gross)

This should include all commission income in respect of the relevant regulated business:

• for home finance transactions, this includes commissions received for advising on home finance transactions and arranging, but not, providing and administration;

• for non-investment insurance contracts, it should include commissions received for advising, arranging and dealing activities;

• for retail investments, only commission received in relation to the relevant activities should be recorded here.

Gross commissions will include commission that is received and passed on to another person.

Where commission is shared between two or more firms, the gross commission should not be double counted, i.e. each firm should report only the commission it has received.

Commissions (net)

This should be the amount of the gross commission figure that is retained by the firm and, where applicable, its appointed representatives, (i.e. not passed on to another person) in respect of each type of business.

Fees/ Adviser charges / Consultancy charges

You should record here adviser charges and consultancy charges, and net income received from customers or other sources on a fixed fee rather than commission basis, but only in respect of the relevant regulated activities.

Other income from regulated activities

You should record here any income that has derived from the relevant regulated activities during the reporting period, which has not been recorded under commissions or fees, adviser charges or consultancy charges.

Such income may include interest on client money, where the firm is permitted to retain this, or payments made by product providers on a basis other than fees or commissions.

Regulated business revenue

This is the total of the firm’s income during the reporting period in relation to its relevant regulated activities.

For an insurance intermediary or a home finance intermediary, this should be calculated in the same way as ‘annual income’, as specified in MIPRU 4.3.3R (although in this context the period is not generally annual).

This rule states: “For a firm which carries on insurance distribution activity50 or home finance mediation activity, annual income… is the amount of all brokerage, fees, commissions and other related income (for example, administration charges, overriders, profit shares) due to the firm in respect of or in relation to those activities”.

Income from other regulated activities

You should record here any income from other regulated activities outside the scope of the RMAR.

Other revenue (income from non-regulated activities)

You should record here any income from other regulated activities outside the scope of the RMAR.

Does your firm receive or hold money in the course of, or in connection with, its insurance distribution activity50?

Firms should answer ‘yes’ here if they hold money such that CASS 5.1 to CASS 5.6 applies (see CASS 5.1.1R).

Firms to which note 4 applies should also answer ‘yes’.

Has your firm elected under CASS 7.10.3R(1) or (2) to comply with CASS 7?

See note 3.

How does your firm hold money received in the course of, or in connection with, its insurance distribution activity50?

You should answer ‘yes’ or ‘no’ under each of the headings, as appropriate.

CASS 5 Client money:

see CASS 5.1

As agent of insurer:

see CASS 5.1.5R and CASS 5.2 – holding money as agent of insurance undertaking under a written risk transfer agreement and not as client money.

Firms to which note 4 applies should select ‘no’ under each heading, unless they hold money when acting both in the capacity of an insurance broker and of a property management company.

A firm may answer ‘yes’ under both headings.

Is your firm's CASS 5 client money held under the CASS 5.3 statutory trust or under one or more CASS 5.4 non-statutory trusts?

You should indicate here the type of trust under which client money is held:

Statutory trust – see CASS 5.3

Non-statutory trust – see CASS 5.4

A firm may answer ‘yes’ under both headings.

If non-statutory, has an auditor’s confirmation of systems and controls been obtained?

This refers to the requirement in CASS 5.4.4R(2) that the firm must obtain and keep current, written confirmation from its auditor that the firm has adequate systems and controls in place to meet the requirements under CASS 5.4.4R(1).

This requirement is separate to the annual audit requirement in SUP 3.10.

Is client money invested or placed in anything other than a client bank account?

You should indicate ‘yes’ here if the firm has invested any client money other than in a client bank account.

See CASS 5.5.14R which states that a firm may satisfy the requirement to segregate client money by segregating or arranging for the segregation of designated investments with a value at least equivalent to such money as would otherwise be segregated.

This means of segregation is only permitted for client money held under a non-statutory trust.

Highest client money requirement (for money held as client money, taken from the firm's client money calculations)

See CASS 5.5.63R and CASS 5.5.66R to CASS 5.5.67R

A firm should enter the highest client money requirement calculated during the period. This would be taken from the firm’s client money calculations performed during the period.

Only the single highest client money requirement figure should be entered, not the aggregate of the client money requirements calculated during the period.

Highest account balance (for money held as client money, taken from the firm's records)

This refers to money held as CASS 5 client money under a statutory trust or non-statutory trust(s). The amount should be taken from the firm’s own records and should include client money held as agent of insurer which is co-mingled with other client money in a client money account (see CASS 5.1.5AR).

If your firm segregates designated investments under a non-statutory trust (see CASS 5.5.14R), you should also include the value of these investments.

If your firm operates both statutory and non-statutory trust accounts, you should enter two balances: one for the highest balance in statutory trust accounts and one for the highest balance in non-statutory trust accounts.

Highest account balance for money held purely as agent of insurer (and not co-mingled with client money)

This refers to money held purely as agent of insurer under risk transfer agreements (see CASS 5.2) and held separate to any CASS 5 client money. The amount should be taken from the firm’s own records.

If money held as agent of insurer is co-mingled with CASS 5 client money in a client bank account (see CASS 5.1.5AR), it should be reported in the previous field and therefore should not be reported in this field.

The data reported in questions 20 to 23 should be taken from the firm’s client money calculation performed closest, and prior, to the end of the reporting period.

Client money requirement as at end of the reporting period

See CASS 5.5.63R and CASS 5.5.66R to CASS 5.5.68R

Client money resource as at end of the reporting period

See CASS 5.5.63R and CASS 5.5.65R

Surplus (+) or deficit (-) of client money resource against client money requirement

See CASS 5.5.63R This should be the difference between the client money requirement and the client money resource.

Adjustments made to withdraw an excess or rectify a deficit

See CASS 5.5.63R

This should be the amount of money paid into or withdrawn from the client bank account following the client money calculation performed closest, and prior, to the end of the reporting period.

Is your firm exempt from the client asset audit requirement?

See SUP 3.1.2R note 4

If the firm does not hold client money or other client assets in relation to insurance intermediation activities or only holds up to, but not exceeding, £30,000 of client money under a statutory trust arising under CASS 5.3 state ‘yes’ here.

Firms to which note 4 applies should answer this question.

If not exempt, have you obtained a client assets audit in the last 12 months?

See SUP 3.1 to SUP 3.7 and SUP 3.11.

If the firm has obtained a client assets audit in the last 12 months enter ‘yes’. If it has not, enter ‘no’.

Firms to which note 4 applies should answer this question.

What is the name of your firm's client assets auditor?

Enter the name of the firm’s auditor as it appears on the Financial Reporting Council’s register of statutory auditors.

Firms to which note 4 applies should answer this question.

According to your last client assets audit report, what was the auditor's opinion on your firm's compliance with the client money rules as at the period end date?

This refers to the opinion at the end of the audit period.

The firm should select from ‘clean’, ‘qualified’ or ‘adverse’, as appropriate.

In this question, the period end date refers to the period covered by the audit report and will therefore refer to a different period to the reporting period for this return.

Firms to which note 4 applies should answer this question.

Have any notifiable client money issues been raised, either in the firm's last client assets audit report or elsewhere, that have not been notified to the FCA since the last reporting period for this return?

Answer yes if the firm has not, since the last reporting period for this return, notified the FCA of any breaches in relation to the following notification requirements:

CASS 5.5.61R: failure of a bank, broker or settlement agent.

CASS 5.5.76R: failure to perform calculations or reconciliation.

CASS 5.5.77R: failure to make good a shortfall by the close of business on the day the calculation is performed.

Does your firm hold any client documents or other assets (other than client money) in accordance with CASS 5.8?

If the firm is subject to the requirements of CASS 5.8, state ‘yes’ here.

Is the firm50 exempt from these capital resources requirements in relation to any of its retail or distribution50 mediation activities?

The firm should indicate here if any Handbook exemptions apply in relation to the capital resources requirements in MIPRU or IPRU-INV 13. Examples of firms that may be subject to exemptions include:

• Lloyd’s managing agents (MIPRU 4.1.11R);

• solo consolidated subsidiaries of banks or building societies;

• small credit unions (as defined in MIPRU 4.1.8R); and

• investment firms not subject to IPRU-INV 13 (unless they additionally carry on home finance mediation activity or insurance distribution activity50 relating to non-investment insurance contracts).

Home finance mediation and non-investment insurance distribution50

Base requirement

The minimum capital requirements for firms carrying on home finance mediation activity and for insurance distribution activity50 relating to non-investment insurance contracts are set out in MIPRU 4.2.11R.

5% of annual income (firms holding client money)

For firms that hold client money or other client assets in relation to insurance distribution activity50 or home finance mediation activity, this should be calculated as 5% of the annual income (see MIPRU 4.2.11R(2)) from the firm’s insurance distribution activity50, home finance mediation activity, or both.

2.5% of annual income (firms not holding client money)

For firms that do not hold client money or other client assets in relation to insurance distribution activity50 or home finance mediation activity, this should be calculated as 2.5% of the annual income (see MIPRU 4.2.11R(1)) from the firm’s insurance distribution activity50, home finance mediation activity, or both.

Capital requirements (higher of above)

The higher of the base requirement and 5% of annual income (firms that hold client money or other client assets), or the higher of the base requirement and 2.5% of annual income (firms that do not hold client money or other client assets)

Other FCA capital resources requirements (if applicable)

The FCA may from time to time impose additional requirements on individual firms. If this is the case for your firm, you should enter the relevant amount here. This excludes capital resources requirements in relation to PII, which are recorded below.

If the firm carries on designated investment business as well as home finance mediation activity, insurance distribution activity50 or both, requirements under IPRU(INV), MIFIDPRU54 and MIPRU must be considered to determine the appropriate requirement (see general notes (i) to (iii) above). If the resulting requirement for a firm is higher than the base MIPRU requirement then you should include the difference here.

Additional capital resources requirements for PII (if applicable)

If the firm has any increased excesses on its PII policies, the total of the additional capital requirements required by the table44 in 44MIPRU 3.2.14R should be recorded here. See also section E of the RMAR.

Total capital resources requirement

Totals of lines 5, 6 and 7

Capital resources

This should be the capital resources calculated in accordance with MIPRU 4 for incorporated or unincorporated firms as applicable.

For firms that are additionally subject to IPRU(INV) or MIFIDPRU54, this should be the higher of the capital resources per MIPRU 4 and the financial resources determined by IPRU(INV) or MIFIDPRU54. See MIPRU 4.4.1R.

Capital resources excess/deficit

This should show the difference between the capital resources that the firm has and its capital resources requirement.

Personal investment firm (retail investment activities only) – IPRU(INV) 13

Note: Firms that carry on retail investment activities, but no other designated investment business, are subject to this section.

Category of personal investment firm

If the firm is subject to IPRU-INV 13, it should enter here its category as defined in the Glossary, i.e., category B1 firm etc.

Capital resources requirement

The capital resources requirement should be calculated in accordance with IPRU-INV 13.13.2R to IPRU-INV 13.13.4G44.

Additional capital resources requirement for PII (if applicable)

If the firm has increased excesses or exclusions on its PII policies, the total of the additional capital resources requirements required by IPRU-INV 13.1 should be recorded here. See also Section E of the RMAR.

Other FCA capital resources requirements (if applicable)

The FCA may from time to time impose additional requirements on individual firms. If this is the case for your firm, you should enter the relevant amount here. This excludes capital resources requirements in relation to PII, which are recorded above.

A firm that has a permission to operate a personal pension will be subject to an additional capital requirement under IPRU-INV 5; this should be included here.

Total capital resources requirement

The total of lines 12, 13 and 14.

Capital resources

Capital resources should be calculated in accordance with IPRU-INV 13.15.3R.

Surplus/deficit of capital resources

This is the difference between the capital resources (line 16) and the total capital resources requirement (line 15).

Capital resources per MIPRU 4 (home finance mediation activity and non-investment insurance distribution activity)50

Incorporated firms

Share capital

Share capital in section A which is eligible for inclusion as regulatory capital.

Reserves

These are the audited accumulated profits retained by the firm (after deduction of tax and dividends) and other reserves created by appropriations of share premiums and similar realised appropriations. Reserves also include gifts of capital, for example, from a parent undertaking.

Any reserves that have not been audited should not be included in this field unless the firm is eligible to do so under MIPRU 4.4.2R(3).

Interim net profits

Interim net profits should be verified by the firm's external auditor, net of tax or anticipated dividends and other appropriations.

Any interim net profits that have not been verified should not be included in this field unless the firm is eligible to do so under MIPRU 4.4.2R(3).

Revaluation reserves

Revaluation reserves (unrealised reserves arising from revaluation of fixed assets) can only be included here if audited.

Eligible subordinated loans

Subordinated loans should be included in capital resources on the basis of the provisions in MIPRU 4.4.7R and MIPRU 4.4.8R.

Less investments in own shares

Amounts recorded in the balance sheet as investments which are invested in the firm’s own shares should be entered here for deduction.

Less intangible assets

Any amounts recorded as intangible assets in section A above should be entered here for deduction.

Unincorporated firms and limited liability partnerships

Capital of a sole trader or partnership or LLP members' capital

See MIPRU 4.4.2R

Eligible subordinated loans

Subordinated loans should be included in capital resources on the basis of the provisions in MIPRU 4.4.7R and MIPRU 4.4.8R.

Personal assets not needed to meet non-business liabilities

MIPRU 4.4.5R and 4.4.6G allow a sole trader or partner to use personal assets to cover liabilities incurred in the firm's business unless:

(1) those assets are needed to meet other liabilities arising from:

(a) personal activities; or

(b) another business activity not regulated by the FCA; or

(2) the firm holds client money or other client assets.

This field may be left blank if the firm satisfies the capital resources requirements without relying on personal assets.

Less intangible assets

Any amounts recorded as intangible assets in Section A above should be entered here for deduction.

Less interim net losses

Interim net losses should be reported where they have not already been incorporated. The figures do not have to be audited to be included.

Less excess of drawings over profits for a sole trader or partnership or LLP

Any excess of drawings over profits should be calculated in relation to the period following the date as at which the capital resources are being calculated. The figures do not have to be audited to be included.

Capital resources per IPRU(INV) 13.15.3R

IPRU(INV) requires that all personal investment firms have financial resources of at least £20,000 at all times. This section is designed to evaluate firms’ adherence to this requirement.

The amounts entered here should be in accordance with IPRU-INV 13.15.3R.

Does your firm hold a comparable guarantee or equivalent cover in lieu of PII, or is it otherwise exempt from holding PII in respect of any regulated activities (tick as appropriate)?

This question will establish whether a firm is exempt from the requirements and so is not required to hold PII.

The conditions for comparable guarantees and exemptions from the PII requirements for firms carrying on insurance distribution50 or home finance mediation are set out in MIPRU 3.1.1R paragraphs (3) to (6).

Personal investment firms can only be exempted by individual waiver granted by the FCA (unless IPRU-INV 13.1.7R applies in respect of comparable guarantees).

If the firm is required to hold PII – i.e. is not exempt from holding PII – you should enter 'no' in the data field.

A firm is NOT exempt from holding PII if:

▪ the firm has a group policy with an insurer; or

▪ the firm has permission for the regulated business that requires PII, but does not currently carry it out; or

▪ it is a personal investment firm meeting the exemption requirements for mortgage intermediaries and insurance intermediaries in MIPRU 3.

Retail investment firms that do not meet the definition of personal investment firm are not required to complete this section of the RMAR.

If the firm does not hold a comparable guarantee or equivalent cover and is not exempt, does the firm currently hold PII?

Firms are required to take out and maintain PII at all times.

You should only enter ‘n/a’ if the firm is exempt from the PII requirements for all the regulated activities forming part of the RMAR.

Has the firm renewed its PII cover since the last reporting date?

This question will ensure that a firm does not fill in Part 2 of the PII section of the RMAR each time it reports, if the information only changes annually. Where the RMAR form requires information which a firm has not submitted previously then this should be completed in the first submission period after those changes have come into force.52

If the firm is reporting for the first time, you should enter 'yes' here and complete the data fields.

You should only enter 'n/a' if the firm is exempt from the PII requirements for all the regulated activities forming part of the RMAR.

52Has the basis of your PII cover changed since the last reporting date?

52You should select ‘yes’ or ‘no’ to identify whether there has been a change in the cover in your firm’s PII policy or policies since the last reporting date. If you enter ‘yes’ then you should specify any changes to the level of excess, period of cover or exclusion(s) in the relevant data fields.

What activities are covered by the policy(ies)?

You should indicate which regulated activities are covered by the firm’s PII policy or policies.

If your policy excludes all business activities carried on prior to a particular date (i.e. a retroactive start date), then insert the date here, if not please insert ‘n/a’

Required terms of PII are set out for personal investment firms in IPRU-INV 13.1.5R and for home finance intermediaries and insurance intermediaries in MIPRU 3.2.4R.

Examples of a retroactive start date:

(1) A firm has a retroactive start date of 01/01/2005 on its policy if:

• A client is advised by the firm to purchase an XYZ policy on 01/03/2004 (i.e. before the retroactive start date).

• The client makes a formal complaint about the sale of XYZ policy to the firm on 01/04/2006 (i.e. while this PII cover is still in place).

• The complaint is upheld, but the firm's current PII Insurer will not pay out any redress for this claim as the transaction took place before 01/01/2005, the retroactive start date in the policy.

Insert '01/01/05' for this question on the RMAR.

(2) A firm does not have a retroactive start date if:

▪ A client is advised by the firm to purchase an XYZ policy on 01/03/2006.

▪ The client makes a formal complaint about the sale of XYZ policy to the firm on 01/04/2006 (i.e. while this PII cover is still in place).

▪ The complaint is upheld, but the firm's current PII Insurer will pay out any redress owed by the firm to the client over any prescribed excess, and to the limit of indemnity provided for. There is no date in the policy before which any business transacted may not give rise to a valid claim.

Insert 'n/a' for this question on the RMAR.

Annual premium

This should be the annual premium that is paid by the firm, net of tax and any other add-ons.

Limit of indemnity

You should record here the indemnity limits on the firm's PII policy or policies, both in relation to single claims and in aggregate.

Those firms subject to the Mortgage Credit Directive (MCD) (see MIPRU 3.2.9AR) or the Insurance Distribution Directive (IDD50) requirements should state their limit in Euros; those that are not subject to the MCD or IDD50 should select 'Sterling' from the drop- down list.

Insurance intermediaries, see MIPRU 3.2.7R and select either 'Euros' or 'Sterling' as applicable. Home finance intermediaries that are not MCD credit intermediaries should state their limit in Sterling (see MIPRU 3.2.9R).

For personal investment firms, see IPRU-INV 13.1.9R and 13.1.13R and select either 'Euros' or 'Sterling' as applicable.

If the firm is subject to more than one of the above limits (because of the scope of its regulated activities) and has one PII policy for all of its regulated activities, the different limits should be reflected in the policy documentation. If there is more than one limit, only the highest needs to be recorded in this field.

Policy excess

For insurance intermediaries and home finance intermediaries, see MIPRU 3.2.10-14R

For personal investment firms, see IPRU-INV 13.1.25R.

Increased excess(es) for specific business types (only in relation to business you have undertaken in the past or will undertake during the period covered by the policy)

If the prescribed excess limit is exceeded for a type or types of business, the type(s) of business to which the increased excess applies and the amount(s) of the increased excess should be stated here.

Firms should record each business type subject to an increased excess separately. 52

(Some typical business types include advice on non-mainstream pooled investments, 52pensions, endowments, 52splits/zeroes, precipice bonds, income drawdown, lifetime mortgages, discretionary management, delegated authority work52.)

Policy exclusion(s) (only in relation to exclusions you have had in,52 or will have during,52 the period covered by the policy)

If there are any exclusions in the firm's PII policy which relate to any types of business52 or activities that the firm has carried out either in the past or during the lifetime of the policy, enter the business type(s) to which the exclusions relate here.

Firms should record each business type or activity subject to an exclusion separately. 52

If no exclusions apply to the firm’s PII policy, firms should state this here (eg ‘No exclusions apply to this policy).52

(Some typical business types include advice on non-mainstream pooled investments,52 pensions, endowments, 52splits/zeroes, precipice bonds, income drawdown, lifetime mortgages, discretionary management.)

52Time period to which the policy exclusion(s) relate

52For any exclusions in the firm’s PII policy, the firm should select whether the exclusion applies to types of business or activities carried out in the past (‘past business’), during the period covered by the policy (‘future business) or both (‘past and future business’).

52Type of exclusion(s) (only in relation to business you have undertaken in the past or will undertake during the period covered by the policy)

52 The firm should enter the type of exclusion from the drop-down list. Some typical types include the volume of business or activity covered by the policy, the specific type of a particular business/activity covered by the policy and sub-limits to the level of indemnity for particular types of business/activity.

If the type of exclusion is not listed firms should select ‘other’.

Start Date

The date the current cover began.

End Date

The date the current cover expires.

Insurer name (please select from the drop-down list)

The firm should select the name of the insurance undertaking or Lloyd's syndicate providing cover named on the schedule or certificate of insurance52. If the PII provider is not listed you should select ‘other’.52

If a policy is underwritten by more than one insurance undertaking or Lloyd's syndicate, you should select the name of the lead insurer on your schedule or certificate of insurance52.

Annual income as stated on the most recent proposal form

This should be the income as stated on the firm's most recent PII proposal form. For a personal investment firm, this is relevant income arising from all of the firm's activities for the last accounting year before the policy began or was renewed (IPRU-INV 13.1.8R). For insurance intermediaries and home finance intermediaries this is the annual income given in the firm's most recent annual financial statement from the relevant regulated activity or activities (MIPRU 4.3.1R to MIPRU 4.3.3R).

Amount of additional capital required for increased excess(es) (where applicable, total amount for all PII policies)

This should be calculated using the tables in IPRU-INV 13.1.19R44 or MIPRU 3.2.14R44 as applicable. The total of additional capital (i.e. in relation to all of the firm's PII policies) should have been reported under 'additional capital requirements for PII' and/or 'additional own funds for PII' in Section D.

Amount of additional own funds required for policy exclusion(s)

Personal investment firms only – this should be calculated in line with IPRU-INV 13.1.23R. The total of additional capital resources (i.e. in relation to all of the firm's PII policies) should have been reported under 'additional capital requirements for PII' and/or 'additional capital resources for PII' in section D.

Total of additional own funds required

Personal investment firms only – this is the same figure as in section D, representing the total of additional capital resources required under IPRU-INV 13.1.23R to 13.1.27R for all of the firm's PII policies.

Close links

Has there been a notifiable change to the firm's close links?

See SUP 11.9. All firms should have notified the FCA immediately if they have become aware that they have become or ceased to be closely linked with another person. If there have been any changes in close links that have not been notified to the FCA, you should do this now. For detailed guidance on what constitutes a close link, see COND 2.3.

If yes, has the FCA been notified of it?

See SUP 11.9. All firms should have notified the FCA immediately if they have become aware that they have become or ceased to be closely linked with another person. If there have been any changes in close links that have not been notified to the FCA, you should do this now. For detailed guidance on what constitutes a close link, see COND 2.3.

Controllers

Has there been a notifiable change to the firm's controllers including changes to the percentage of shares or voting power they hold in your firm?

See SUP 11.4. If there have been any changes in controllers that have not been notified to the FCA, you should do this by means of your usual supervisory channels.

If yes, has the FCA been notified of it?

See SUP 11.4. If there have been any changes in controllers that have not been notified to the FCA, you should do this by means of your usual supervisory channels.

General information39

3917

Did the firm do any of the following activities during the reporting period?

Indicate whether the firm undertook any of the stated activities by selecting “Y” or “N” for each of the columns.

391

Total number of employees at the firm as at the end of the reporting period

This should be the total number of employees that worked for the firm as at the end of the reporting period.

Therefore, employees that may have worked for the firm during the period but were not employed as at the end date should not be included.

Of which:

392

Number of employees that give advice in each area

‘Advice’ is given where the sale of a product is based on a recommendation given to the customer on the merits of a particular product.

If employees advise in relation to more than one business type advising on mortgages, advising on non-investment insurance, advising on retail investment products or advising on second (and subsequent) charge mortgages), they should be counted in each applicable field.

Note: in relation to advising on non-investment insurance, this total should not include employees that do not advise retail customers.

Each area should be considered to refer to the four business types in the form.

3926

Number of individual advisers employed by the firm

The total should be the actual number of individual advisers employed by the firm, regardless of whether they advise in one or more areas.

393

Number of employees that give advice (FTE)

This should be the same data as above, but expressed in ‘full time equivalent’ terms.

E.g. if the firm has 20 part time employees that work 50% of normal hours, the figure would be 10.

394

Number of employees that supervise others to give advice in each area

Note the requirements in the Training & Competence Sourcebook (TC 2.1.2R, TC 2.1.3G, TC 2.1.4G and TC 2.1.5R) for employees to be appropriately supervised, and also the competencies that are required for those who supervise others.

If any of these employees carries out supervisory activities in relation to more than one business type, they should be counted in each applicable field.

Each area should be considered to refer to the four business types in the form.

3927

Number of individual employees with supervisory responsibilities

The total should be the actual number of individual supervisors at the firm, regardless of whether they supervise in one or more areas.

395

Number of advisers assessed as competent by the firm in each area

This is a subset of the ‘number of employees that give advice in each area’ above.

See TC Appendix 1.1R for the detailed training & competence requirements relating to individual activities.

If employees are competent in relation to more than one business type, they should be counted in each applicable field.

Each area should be considered to refer to the four business types in the form.

3930

Number of advisers assessed as competent in one or more areas

The total should be the actual number of individuals assessed by the firm as competent in one or more of the four business types specified in columns A-C and E.

3918

Number of fully qualified advisers

The total number of advisers holding appropriate qualifications to carry on activities 2, 3, 4, 6, 12 and 13 in TC Appendix 1.1.1 R (other than in relation to a Holloway sickness policy where the Holloway policy special application conditions are met).

3919

Number of advisers holding a valid Statement of Professional Standing (SPS)

The total number of retail investment advisers holding a valid SPS from an accredited body.

396

Number of advisers that hold an appropriate qualification in each area

This is a subset of the ‘number of employees that give advice in each area’ above.

In the case of certain activities, TC 2 imposes requirements on firms in relation to their employees and passing examinations.

The relevant activities to which TC applies and require employees to obtain appropriate qualifications can be found in TC Appendix 1. Then appropriate qualifications for these activities can be found in TC Appendix 4E.

If advisers have appropriate qualifications in relation to more than one business type, they should be counted in each applicable field.

Each area should be considered to refer to the four business types in the form.

3929

Number of individual advisers holding at least one appropriate qualification

The total should be the actual number of individuals holding at least one appropriate qualification for advising on mortgages, acting as a retail investment adviser, or advising on second (and subsequent) charge mortgages.

3925

Number of employees that left the firm during the reporting period

The total should be the actual number of employees whose last day of employment fell within the reporting period.

397

Number of advisers that left the firm during the reporting period

This is the total number of advisory employees whose last day of employment fell within the reporting period.

If any of these advisers used to carry out advisory activities in relation to more than one business type, they should be counted in each applicable field.

3928

Number of individual advisers that left the firm during the reporting period.

The total should be the actual number of individual advisers whose last day of employment fell within the reporting period.

Non-investment insurance (retail customers) 39

3920

Which types of non-investment insurance advice were provided by the firm in the reporting period?

For each type of advice, the firm should indicate whether or not advice has been provided on that basis / business type.

Fair Analysis of the Market

If an insurance intermediary informs a customer that it gives (including a personal recommendation)50 advice on the basis of a fair analysis of the market, it must give that advice (including a personal recommendation)50 on the basis of an analysis of a sufficiently large number of contracts of insurance available on the market to enable it to make a recommendation, in accordance with professional criteria, regarding which contract of insurance would be adequate to meet the customer's needs. (See ICOBS 5.3.3R, ICOBS 4.1.6R, ICOBS 4.1.7R50 and ICOBS 4.1.8G).

Restricted – Multi-tie

A firm provides advice on products selected from a limited number of provider firms.

Restricted – Single-tie

A firm provides advice on products selected from one provider firm only.

Mortgages (and second and subsequent charge mortgages) 39

3921 and 22

Which types of mortgage advice were provided by the firm in the reporting period?

What types of second (and subsequent) charge mortgage advice were provided by the firm in the reporting period?

For each type of advice, the firm should indicate whether or not advice has been provided on that basis / business type.

42

Firms should refer to MCOB 4.4A when answering these questions. 42

Retail Investment Advice39

3923

Which types of retail investment advice were provided by the firm in the reporting period?

Independent

For a retail investment firm to provide independent advice it must assess a sufficient range of relevant products available on the market which must (1) be sufficiently diverse with regard to their type and issuers or product providers, to ensure that the client’s investment objectives can be suitably met; and (2) not be limited to relevant products issued or provided by: (a) the firm itself or by entities having close links with the firm; or (b) other entities with which the firm has such close legal or economic relationships, including contractual relationships, as to present a risk of impairing the independent basis of the advice provided (COBS 6.2B.11R)47.

Restricted

A retail investment firm provides restricted advice if:

(a) it makes personal recommendations to retail clients in relation to retail investment products which are not independent advice; or

(b) it provides basic advice.

39

39

39

39Professional Standards Data

24

Please provide the following information for each of the retail investment advisers employed by the firm as at the end of the reporting period:

Adviser ID

Surname

Forename

Individual Reference Number (IRN)

Please enter the adviser’s IRN if they have one.

If the adviser has an IRN, no further ID details are required and the firm should move on to complete the ‘adviser qualification’ questions.

NI Number, Date of Birth, Passport Number, Nationality

If an adviser does not have an IRN, the firm should enter both a National Insurance (NI) number and Date of Birth for unique identification or, if they do not have an NI number, Date of Birth, current Passport Number and Nationality. Nationality refers to the country issuing the passport from which the number is provided. For example, the nationality of a person in possession of a British passport issued by HM Passport Office is “British”.

This information should only be provided in the appropriate combinations; completing only NI number and Nationality, for instance, would not be acceptable.

Adviser Qualification

Part Qualified, Fully Qualified

For each retail investment adviser, the firm should indicate whether the adviser is part or fully qualified by selecting “Y” or “N” from the dropdown menu46.

Accredited Body

The firm should, in respect of each competent retail investment adviser, indicate the accredited body from which the Statement of Professional Standing (SPS) was obtained. Where the retail investment adviser has attained each module of an appropriate qualification (fully qualified for reporting purposes), but has not yet been assessed as competent to carry on the activities of a retail investment adviser, then ‘No SPS’ should be selected from the dropdown menu.46

Activity Start Date

For each retail investment adviser, other than those who have attained each module of an appropriate qualification,46 the firm should provide the date at which the employee first began to carry on the activity of a retail investment adviser, even if this was for a different firm.46

SPS Start Date

For each competent46 retail investment adviser, provide the date of issue for their46 current SPS. Where the retail investment adviser has attained each module of an appropriate qualification but has not yet been assessed competent to carry on the activities of a retail investment adviser,46 this field is not required.

General COBS data

Do regulated activities form the core business of the firm?

‘Core business’ for these purposes is the activity from which the largest percentage of the firm’s gross income is derived.

Note for an authorised professional firm (‘APF’) specifying that its core business is ‘professional services’: if the firm’s income from regulated activities is 50% or more of its total income (disregarding a temporary variation of not more than 5% over the preceding year’s figure), then it should have regard to IPRU-INV 2.1.2R (4) and give notification to the FCA.

If not, specify type of core business

The firm should specify its core business from the drop-down list.

You should select Other if none of the categories is applicable to the firm’s business, e.g. loss assessor, professional services provided by an APF.

Monitoring of Appointed Representatives (‘ARs’)

Number of ARs registered with the firm as at the end of the reporting period

Total number of ARs for which the firm has regulatory responsibility, as at the end of the reporting period.

Of which, number of ‘secondary’ ARs as at the end of the reporting period

An AR is a secondary AR if:

• the activities for which it is exempt are limited to insurance distribution activities50 only; and

• its principal purpose is to carry on activities other than insurance distribution activities50.

Of which, number of introducer ARs as at the end of the reporting period

See Glossary definition

Number of advisers within ARs as at the end of the reporting period

This should be the total of advisory staff across all of the firm’s appointed representatives. Advisory staff are those that advise customers on the merits of purchasing a particular product.

By definition this total will not include staff at introducer ARs.

Does the firm have appropriate systems and procedures in place to ensure that the activities of its ARs are effectively monitored and controlled?

A summary of the firm’s responsibilities under SUP 12 is set out under the sub-heading “monitoring of appointed representatives” above.

The firm should be able to demonstrate that it has been in compliance with the requirements in SUP 12 throughout the reporting period.

Number of ARs that have been subject to monitoring visits by the firm during the reporting period.

This is one of the ways in which firms with ARs may fulfil their responsibilities under SUP 12.

Number of ARs that have been subject to file reviews by the firm during the reporting period.

This is one of the ways in which firms with ARs may fulfil their responsibilities under SUP 12.

Number of ARs that have been subject to financial checks by the firm during the reporting period.

This is one of the ways in which firms with ARs may fulfil their responsibilities under SUP 12.

Has any other monitoring of ARs by the firm taken place?

If the firm uses other methods to fulfil its monitoring responsibilities under SUP 12, you should state ‘yes’ here.

Total non-investment insurance premium derived from retail customers (annualised)

Regular policy premiums received for a policy should be reported only once as an annualised figure in the return for the period that covers the date of the sale. There is then no need to report in subsequent returns. An annualised figure is also required if a policy premium is paid in one single payment.

(i) non-investment insurance contracts – product information

Please indicate in column A each product type where the firm has advised or arranged transactions for retail customers during the reporting period

You should indicate in column A for each relevant product.

Please indicate in column B where the firm’s business for retail customers in the product type formed more than 40% by premium of all of its non-investment insurance activities.

You should indicate in column B for each relevant product, based on an estimate of the percentage of business. If you think the product might account for more than 40% of business but are not sure, you should indicate that it does.

(ii) non-investment insurance chains

Total non-investment insurance premium derived from retail customers

You should state here the total of premiums payable by Retail customers during the reporting period in relation to non- investment insurance products.

Of this business, please indicate in column D where this business is significant (see notes above)

If this business is significant (see definition above) for one or more product types, this should be indicated in column D.

Product types:

The product types in this table are defined in the Interim Prudential sourcebook for insurers (‘IPRU(INS)’).

Data for fees calculations

Firms will need to report data for the purpose of calculating FCA, FOS and FSCS levies.

FCA

The relevant information required is the tariff data set out in FEES 4 Annex 1AR Part 3 under fee-blocks A.13, A.18 and A.19. Note that firms are required to report tariff data information relating to all business falling within fee blocks A.13/A.18/A.19 and not simply that relating to retail investments.

FOS

The relevant information required is the tariff data set out in FEES 5 Annex 1R industry blocks 8, 9, 16 and 17. Note that firms are required to report tariff data information relating to all business falling within industry blocks 8/9, 16 and 17.

FSCS

The relevant information required is the tariff data set out in categories 1.1, 2.1 and 4.149, FEES 6 Annex 3AR45. Note that firms are required to report tariff data information relating to all business falling within categories 1.1, 2.1 and 4.149, FEES 6 Annex 3AR45.

Non-mainstream pooled investment

£5000

26

Non-readily realisable securities

£400

2

FCA Annual45 Income (£s)

FOS Relevant Annual Income (£s)

45FSCS Annual Eligible Income (£s)

Home finance intermediation45

FEES 4 Annex 11AR, 13G

FEES 5 Annex 1R industry block 16

45FEES 6 Annex 3AR category 4.149

General insurance45 distribution48

FEES 4 Annex 11AR, 13G

FEES 5 Annex 1R industry block 17

45FEES 6 Annex 3AR category 1.149

Life distribution48 and investment49 intermediation45

FEES 4 Annex 11AR, 13G

FEES 5 Annex 1R industry block 8, 9

45FEES 6 Annex 3AR category 2.149

49

Example 1 – Completing the form where the firm only provides either independent advice or restricted advice

A firm that exclusively provides independent advice would need to complete sections 1, 3 and 4 (columns A, B and E), leaving section 2 and columns C and D of section 4 blank.

A firm that exclusively provides restricted advice would need to complete sections 2, 3 and 4 (columns C, D and E), leaving section 1 and columns A and B of section 4 blank.

A firm providing both independent and restricted advice would need to complete sections 1 to 4 as appropriate.

Revenue from all initial adviser charges including initial, one-off and ad hoc adviser charges (rows 2 and 7)

Firms should report the total revenue from distinct one-off advice services, being those services that are not covered by an ongoing adviser charge, as at the end of the reporting period. This would include, for example, revenue from initial, one-off and ad hoc adviser charges, irrespective of whether the charge is paid as a single payment or through regular instalments.

Where an initial adviser charge is paid through regular instalments, which is only permitted in limited cases (as set out in COBS 6.1A.22R), only the amounts due within the reporting period should be reported. This is illustrated in example 2.

Example 2 - Reporting revenue from initial adviser charges payable in instalments

A firm giving independent advice provides advice to a retail client about a retail investment product where regular contributions are being made and there is a £600 initial adviser charge payable in two equal amounts – now and in 12 months’ time. Firms should report £300 in row 2, as this is the amount due from that retail client within the reporting period. The remaining £300 of the total adviser charge payable would be reported for a future reporting period when it is due from the retail client.

Revenue from ongoing adviser charges (rows 3 and 8)

Firms should report the total revenue due within the reporting period for adviser charges for ongoing services which are not initial charges.

Example 3 – Advice in relation to a retail investment product and non-investment product

A firm giving independent advice charges a retail client £1,000 for initial advice in relation to both a retail investment product and a pure protection contract. Firms should only report the adviser charge for the investment advice. In this case, the firm’s charging structure quotes the cost of this investment advice as £600; therefore, £600 should be reported in row 2.

Example 4 – Reporting adviser charges that are paid by retail clients from more than one source

A retail client agrees to pay £1,000 for initial advice provided by a firm giving independent advice for a single contribution investment. The retail client pays £600 directly from their bank account, with £400 facilitated by a platform service provider. The form would be completed as follows:

Types of advice provided

A

1

Indicate the type(s) of advice provided by the firm

Independent

Section 1 – Independent advice

A

B

Adviser charges paid direct by retail clients

Adviser charges facilitated by product providers or platform service providers

Retail investment products revenue from adviser charges (monetary amount)

2

Revenue from all initial adviser charges including initial, one-off and ad hoc adviser charges

£600

£400

3

Revenue from ongoing adviser charges

Payments of initial adviser charges (number)

4

Aggregate number of initial adviser charges payable as lump-sum payments due from retail clients within the reporting period

0.60

0.40

5

Aggregate sum of the proportion of initial adviser charges, payable through regular instalments, due from retail clients within the reporting period

Please note: for the purpose of this example, rows 4 to 5 are also completed.

Example 5 – Commission offset against an adviser charge

A firm giving independent advice enters into an agreement to provide a retail client with ongoing advice. The firm charges the retail client £500 for this ongoing advice, but receives £200 in trail commission for existing investments held by the retail client. This trail commission is used to reduce the actual amount due from the retail client to £300. Firms should report the full £500 adviser charge in row 3, as this is the total adviser charge agreed with the retail client.

Aggregate number of initial adviser charges payable as lump sum payments due from retail clients within the reporting period (rows 4 and 9)

Firms should report the total number of initial adviser services provided where the adviser charge is payable as a single payment and due from retail clients in the reporting period, i.e. the retail client pays the entire initial adviser charge in one payment. Data reported in this section should be broken down by the way the adviser charge is paid. Where an individual retail client pays the initial adviser charge through more than one source, the proportion of the total payment made by that individual retail client should be identified and reported as a fraction to two decimal places in the applicable columns, as in example 4 above.

If an initial adviser charge is not paid in full, it should be recorded under row 5 where independent advice is provided or row 10 where restricted advice is given.

Aggregate sum of the proportion of initial adviser charges, payable through regular instalments, due from retail clients within the reporting period (rows 5 and 10)

An initial adviser charge may be structured to be payable over a period of time when it relates to a retail investment product for which an instruction from the retail client for regular payments is in place and the firm has disclosed that no ongoing personal recommendations or service will be provided (COBS 6.1A.22R(2)).

Firms should calculate the proportion of initial adviser charges, payable through regular instalments, that were due from each retail client within the reporting period. Each instalment due within the reporting period should be captured by the firm as a fraction expressed as a decimal, to two decimal places, representing the amount paid off as a proportion of the amount owed. The sum of these proportions should be reported in the appropriate data field (row 5 for independent advice and row 10 for restricted advice) to two decimal places.

Data reported in this section should be broken down by the way the adviser charge is paid. Where the retail client pays an initial adviser charge through more than one source, the proportion of the charge paid through each source should be identified and reported in the applicable column.

Data for rows 5 and 10 can be calculated either using (1) the length of the repayment period, if these instalments are of equal value or (2) the amount paid. These two methods are outlined below (both methods should arrive at the same answer).

(1) For each retail client calculate the number of months in the reporting period in which equal instalments are made divided by the total number of months in which payments are due to be made. Report the sum of the proportions based on payment mechanism and type of advice in the appropriate field.

(2) For each instalment calculate the amount paid divided by the total amount due. Report the sum of the proportions based on payment mechanism and type of advice in the appropriate field.

This is illustrated in examples 6 and 7.

Example 6 – Reporting the number of initial adviser charges invoiced as regular payments

An firm giving independent advice provides advice to retail client A about an investment where regular contributions are being made and a £600 initial adviser charge is payable in two equal amounts – now and in 12 months’ time. Firms should report 0.50 in row 5 for retail client A, as half the total initial adviser charge was payable within the reporting period. 0.50 would also be reported in a future reporting period, when the remaining adviser charge is due from retail client A.

The same firm provides advice to another retail client B about an investment where regular contributions are being made. A £900 initial adviser charge, payable in three equal instalments over the next three reporting periods, is agreed. 0.33 would be reported in row 5 for retail client B, as one-third of the total initial adviser charge is payable as at the end of the reporting period.

Reflecting the agreements with retail clients A and B, the form would be completed as follows:

Total number of initial advice services, including initial, one-off and ad hoc advice services, provided within the reporting period (rows 6 and 11)

Firms should report the total number of distinct, chargeable one-off advice services provided to retail clients during the reporting period. This includes any advice given that was not funded through an ongoing adviser charge, which could include, for example, initial, one-off and ad hoc advice services for which there is a corresponding initial adviser charge.

Rows 6 and 11 measure the number of one-off advice services provided to retail clients in the reporting period. Where the same retail client received more than one such advice service, such as an initial advice service and a separate ad hoc advice service that was funded through a separate adviser charge, this should be reported as two one-off advice services.

Any advice agreements that were cancelled, with no initial adviser charge being paid, or where any initial charge paid was returned to the retail client, should not be reported. However, any initial advice services where the retail client paid an adviser charge to the adviser, even if the retail client did not act on the recommendations of that adviser, should be reported.

To extend this example into the next reporting period (rp2):

• Assume the same firm provided an initial advice service to four retail clients in the reporting period rp2 but did not provide any ad hoc services to any other retail clients.

• Each retail client paid the adviser charges for the initial advice services by a lump sum within the reporting period.

• The retail client that received an initial advice service on an investment where regular contributions were being made in the previous reporting period (rp1), and was paying their adviser charge in two equal instalments across two reporting periods, was due to pay the final instalment within the reporting period rp2.

Again assuming all retail clients paid the adviser charge directly from their bank account and independent advice was given by the firm, the form for reporting period rp2 would be completed as follows:

Number of retail clients paying for ongoing advice services at the end of the reporting period (row 12)

Firms should report the number of retail clients paying for ongoing advice services (i.e. paying ongoing adviser charges) at the end of the reporting period.

This would include any retail clients who have an ongoing adviser charging agreement, even if the adviser charges due are, fully or partially, offset with trail commission received from a retail investment product provider in respective of an investment held by that retail client before 31 December 2012. Any retail clients on a contract entered into before 31 December 2012, whereby the retail client has not entered into an ongoing adviser charging agreement and any ongoing advice received is fully funded through provider commission, should be excluded. Any such commission payments would need to meet the rules in COBS 6.1A.4AR and COBS 6.1A.4AAG.

Number of retail clients who start paying for ongoing advice services during the reporting period (row 13)

Firms should report the number of retail clients that started paying for an ongoing advice service (i.e. paying ongoing adviser charges) within the reporting period. This could include:

• new retail clients to the firm that agreed to start paying for an ongoing advice service;

• existing retail clients of the firm that may, for example, have previously received an initial advice service but had started paying for ongoing advice in the reporting period;

existing retail clients of the firm that were previously on a commission-based agreement established before 31 December 2012, but moved to an adviser charging agreement and started paying ongoing adviser charges in the reporting period.

Number of retail clients who stop paying for ongoing advice services during the reporting period (row 14)

Firms should report the number of retail clients that were paying an adviser charge for ongoing advice during the reporting period, but stopped paying for ongoing advice by the end of the reporting period.

Example 9 – Reporting the adviser charging structures invoiced as regular payments

A firm provides advice on a retail investment product where regular contributions are being made, with a 2% adviser charge payable in three equal instalments over different reporting periods. For the purpose of completing row 16, the adviser charge would be 2.00%.

Likewise, if the adviser charge was £600 as a fixed fee payable in three equal instalments over different reporting periods, for the purpose of completing row 17, the adviser charge would be £600.00.

Example 10 – Reporting ongoing adviser charging structures where retail clients pay the ongoing adviser charge on a monthly, quarterly or six-monthly basis

A firm charges its retail clients between £20 and £50 per month for ongoing advice. For the purpose of completing row 21, the annual amount due from the firm’s retail clients should be reported. So, in this example, the minimum ongoing adviser charge would be £240 and the maximum £600.

Another firm charges its retail clients a flat 0.5% of assets under advice for providing an ongoing advice service during the year. Even where this charge is levied monthly, quarterly or six-monthly, 0.50% should be reported in row 20.

1

Has the firm or its appointed representatives provided advice to retail clients on converting or transferring from defined benefits (DB) pension schemes or other pensions with safeguarded benefits (excluding guaranteed annuity rates) in the reporting period?

This should include advice that was either full pension transfer or conversion advice or abridged advice.

If the answer to the qualifying question is no, then no further questions need to be answered.

Part 1 – Business model

2

How many retail clients in total did the firm and its appointed representatives provide with only full pension transfer or conversion advice?

This should only include the total number of retail clients that were provided with full pension transfer or conversion advice, including those that were recommended not to transfer or convert. It should exclude retail clients that were only provided with abridged advice.

3

How many retail clients in total did the firm and its appointed representatives provide with abridged advice?

This should include the total number of retail clients that were provided with abridged advice, including those that were recommended not to transfer or convert and those that proceeded to take full pension transfer or conversion advice.

4

How many pension transfer specialists were employed by, or working under the responsibility of, the firm and its appointed representatives at the end of the reporting period? Please provide the full-time equivalent numbers.

This should include all pension transfer specialists providing advice under the authorisation of the firm completing this return. This should not include pension transfer specialists working alongside the firm, but under responsibility of another authorised firm. Please express as full-time-equivalent numbers eg an individual working 4 out 5 days per week should be recorded as 0.80 FTE. Data must be entered to 2 decimal places.

5

How many introductions for advice on pension transfers and pension conversions were accepted by the firm, or its appointed representatives, from other authorised firms?

This should include introductions for full pension transfer or conversion advice and abridged advice. This should not include introductions from firms or individuals that are not authorised.

6

How many introductions for advice on pension transfers and pension conversions were accepted by the firm, or its appointed representatives, from introducer firms that were not authorised?

This should include introductions for full pension transfer or conversion advice and abridged advice. This should not include referrals not done by way of business, for example by friends or family. Nor should it include referrals from UK accredited accountancy or legal firms that are regulated by a designated professional body.

For more information on introducers, please see our website: https://www.fca.org.uk/news/news-stories/investment-advisers-responsibilities-accepting-business-unauthorised-introducers-lead-generators

7

Of the total retail clients in Question 2, how many did the firm and its appointed representatives provide with full pension transfer or conversion advice but not on the investment of proceeds of the transfer or conversion?

This is specifically looking for the number of retail clients where the choice of investment for the proceeds of the transfer has been recommended by another authorised firm or chosen by the retail client (whether based on information provided by an introducer or not).

Part 2 – Appointed representatives

8

Of the retail clients who were reported under Question 2, how many were advised by an appointed representative of the firm?

This is specifically looking for the number of retail clients advised by the firm’s appointed representatives.

9

Of the retail clients reported in Question 3, how many were given abridged advice by an appointed representative of the firm?

As with Question 8, this is specifically looking for the number of retail clients advised by appointed representatives.

10

Focusing on the appointed representative that gave full pension transfer or conversion advice to the most retail clients, how many retail clients did they advise?

Firms should identify the appointed representative that provided full pension transfer or conversion advice to the highest number of retail clients.

Part 3 – Personal recommendations to transfer

11

Of the retail clients reported in Question 2, how many did the firm and its appointed representatives provide with a personal recommendation to transfer or convert their pension?

This should include the total number of retail clients that were provided with full pension transfer or conversion advice, excluding those that were recommended not to transfer or convert.

12

Of the retail clients in Question 11, what was the total transfer value of the pension transfers and pension conversions?

This should be the total transfer value of pension transfers and pension conversions collected by the principal firm and appointed representatives from those retail clients provided with a personal recommendation to transfer or convert their pension (as reported under Question 11).

13

Of the retail clients reported in Question 11, what was the total revenue derived from initial advisory charges for full pension transfer advice, including advice on the investment of the proceeds?

This should be the total revenue collected by the principal firm and appointed representatives for the initial advisory charges for full pension transfer or conversion advice. This should include all initial charges for the full pension transfer or conversion advice, including the investment advice on the proposed destination where relevant, and arranging a pension transfer or pension conversion. It should exclude any ongoing charges the retail client has agreed to pay. It should also exclude any separate initial charges for abridged advice.

14

Of the retail clients reported under Question 11, how many satisfied the requirement for one or more of the exceptions to the ban on contingent charging and so charged in full or partially on a contingent basis?

This should include the total number of retail clients that were provided with a personal recommendation to transfer or convert their pension, that were also charged in full or partially on a contingent basis.

Only retail clients that satisfy the requirement for the serious ill-health carve-out exemption and/or the serious financial difficulty carve-out exemption may be charged in full or partially on a contingent basis.

Part 4 – Personal recommendations not to transfer

15

Of the retail clients reported in Question 2, how many did the firm and its appointed representatives provide with a personal recommendation not to transfer or convert their pension after receiving full pension transfer or conversion advice?

This should include the total number of retail clients that were provided with a personal recommendation NOT to transfer or convert their pension after receiving only full pension transfer or conversion advice. This should not include abridged advice recommendations.

16

Of the retail clients reported in Question 3, how many did the firm and its appointed representatives provide with a personal recommendation not to transfer or convert their pension after receiving abridged advice?

This should include the total number of retail clients that were provided with a personal recommendation NOT to transfer or convert their pension after receiving only abridged advice. This should not include full pension transfer or conversion advice recommendations.

17

Of the retail clients reported in Question 15, what was the total transfer value of the pension transfers and pension conversions?

This should include the total transfer value53 of retail clients provided with a personal recommendation not to transfer or convert their pension after receiving full pension transfer or conversion advice.

18

Of the retail clients reported in Question 15, what was the total revenue derived from the initial advisory charges for full pension transfer or conversion advice on the pension transfers and pension conversions?

This should be the revenue collected by the principal firm and appointed representatives.

This should not include transfer revenue from abridged advice recommendations.

19

Of the retail clients reported in Question 16, what was the total revenue derived from abridged advice on pension transfers and pension conversions?

This should be the revenue collected by the principal firm and appointed representatives.

20

For how many retail clients did the firm arrange a pension transfer or conversion on an insistent client basis after providing full pension transfer or conversion advice?

Retail clients should only be considered insistent clients if the firm or its appointed representatives initially provided a personal recommendation not to transfer following full pension transfer or conversion advice.

21

Of the retail clients that satisfied the requirement for one or more of the exceptions to the ban on contingent charging and charged in full or partially on a contingent basis, what was the total initial revenue derived from the firm accepting to process the pension transfers or pension conversions on a non-insistent client basis (including providing advice on the investment of the proceeds)?

This should be the total initial revenue derived from retail clients that satisfy the requirement for one of the exceptions to the ban on contingent charging and charged in full or partially on a contingent basis, and that WERE NOT processed on an insistent client basis.

Only retail clients that satisfy the requirement for the serious ill-health carve-out exemption and/or the serious financial difficulty carve-out exemption may be charged in full or partially on a contingent basis.

22

Of the retail clients that satisfied the requirement for one or more of the exceptions to the ban on contingent charging and charged in full or partially on a contingent basis what was the total initial revenue derived from the firm accepting to process the pension transfers or pension conversions on an insistent client basis (including providing advice on the investment of the proceeds)?

This should be the total initial revenue derived from retail clients that satisfy the requirement for one of the exceptions to the ban on contingent charging and charged in full or partially on a contingent basis, and that WERE processed on an insistent client basis.

Only retail clients that satisfy the requirement for the serious ill-health carve-out exemption and/or the serious financial difficulty carve-out exemption may be charged in full or partially on a contingent basis.

Part 5 – Ongoing services

23

How many retail clients did the firm arrange a pension transfer or pension conversion for?

This should be measured at the point of receiving the retail client’s request to arrange a pension transfer or pension conversion.

This should include:

• those advised to transfer or convert by the firm or its appointed representatives (as reported in Question 11);

• insistent client transfers or conversions (as reported in Question 20); and

• any retail client that did not receive advice on the transfer or conversion by the firm (for example, for less than £30k pots or those transfers or conversions executed by the firm where the retail client had received advice from a different firm).

24

Of the retail clients in Question 23, how many agreed to an ongoing advice service provided by the firm its appointed representatives?

This should be the total number of retail clients that the firm arranged a pension transfer or pension conversion for, that also agreed to an ongoing advice service provided by the firm or its appointed representatives?

Part 6 – Charging structures

25

Of the retail clients reported in Question 2, how many were advised under a charging structure which meant the advisory charge was only payable if the retail client proceeded with the transfer or conversion (charging fully or partially contingent on a transfer or conversion taking place)?

This should be the total number of retail clients that were eligible one or more of the exemptions to the ban on contingent charging and charged in full or partially on a contingent basis.

26

Of the retail clients reported under Question 2, how many were advised under a charging structure which meant that the advisory charge remained the same whether or not the retail client proceeded with the transfer or conversion? (charging completely non-contingent)

This should be the total number of retail clients that were not eligible for one or more of the exceptions to the ban on contingent charging and charged in full on a non-contingent basis. This excludes retail clients who only received abridged advice.

Part 7 – Product and investment solutions

27

How many retail clients proceeded to transfer or convert into an investment solution that had annual ongoing product and investment charges (excluding ongoing advice charges) of 0.75% or less?

This should include all charges associated with the ongoing investment eg discretionary fund management, platform, product, tax wrapper or investment charges. This should not include ongoing advice charges. Where the cost is expected to vary over time, include the average for the first 5 years. This should not include retail clients that did not plan to have any money remain invested, such as those immediately making a full encashment or purchasing an annuity with the full balance of the transfer.

28

How many retail clients proceeded to transfer or convert into an investment solution that had annual ongoing product and investment charges (excluding ongoing advice charges) of more than 0.75% and less than or equal to 1.5%?

This should include all costs associated with the ongoing investment eg discretionary fund management, platform, product, tax wrapper or investment charges. This should not include ongoing advice charges. Where the cost is expected to vary over time, include the average for the first 5 years. This should not include retail clients that did not plan to have any money remain invested, such as those immediately making a full encashment or purchasing an annuity with the full balance of the transfer.

29

How many retail clients proceeded to transfer or convert into an investment solution that had annual ongoing product and investment charges (excluding ongoing advice charges) of more than 1.5%?

This should include all costs associated with the ongoing investment eg discretionary fund management, platform, product, tax wrapper or investment charges. This should not include ongoing advice charges. Where the cost is expected to vary over time, include the average for the first 5 years. This should not include retail clients that did not plan to have any money remain invested, such as those immediately making a full encashment or purchasing an annuity with the full balance of the transfer.

30

How many retail clients proceeded to transfer into a solution that had higher ongoing charges than their workplace pension?

This should include retail clients advised to transfer and insistent client transfers. This should not include retail clients that planned to immediately withdraw the full balance on transfer. It should also not include retail clients without a workplace pension or where the workplace pension would not accept a transfer.

31

How many retail clients proceeded to transfer into a workplace pension?

This question refers to those retail clients that proceeded to transfer to a workplace pension covered by 0.75% charge cap.

32

How many retail clients proceeded to transfer or convert where the investment solution included investments subject to regulatory restrictions on retail distribution?

This should include retail clients advised to transfer and insistent client transfers. For investments subject to restrictions on retail distribution see COBS 9.3.5G: https://www.handbook.fca.org.uk/handbook/COBS/9/3.html?date=2016-03-07

33

How many retail clients proceeded to transfer into a qualifying recognised overseas pension scheme (QROPs) or another overseas pension scheme?

This should include retail clients advised to transfer and insistent client transfers.

Part 8 – Guidance

34

How many retail clients were provided with guidance (eg through a triage service) in the reporting period?

This should include retail clients that were provided with guidance from the principal firm and its appointed representative only.

35

Of the retail clients reported under Question 2, how many were provided with guidance (eg through a triage service)?

This should include the total number of retail clients that the firm and its appointed representatives provided with full pension transfer or conversion advice that were also provided with guidance.