New Features & Updates September 2020 – Safeguarded Benefits & ‘Abridged Advice’

New Features & Updates September 2020 – Safeguarded Benefits & ‘Abridged Advice’

Richard Lent

Back in July we released a new DB Pension Transfer Summary page within Genovo in anticipation of the rule changes that come into force on 1st October. But this wasn’t the only change that affects suitability reports.

Safeguarded benefits

The FCA are introducing the requirement for advisers to complete a TVC where a client’s pension contains either ‘GMP or other benefits found in a DB scheme’ and they’ve confirmed ‘firms should treat these as DB benefits’. The results of the TVC will therefore need to be included in your suitability report.

The good news is that when we introduced the TVC Step into the Review of your Existing Pension Plans section, we ensured it wasn’t just triggered for DB pensions, but also whenever you pick ‘Included’ for ‘Guaranteed Retirement Income’ on the Money Purchase Pension Benefits and Features step, for both Section 32 Buyout plans and Occupational Money Purchase Pensions.

Abridged advice

The FCA are also introducing a new advice process – ‘abridged advice’ – as part of these changes, which can result in two new potential client outcomes:

  • A recommendation that it is clearly in their best interests not to transfer their existing defined benefit pension; or
  • A recommendation that, based on the information collected to date, they should proceed to ‘full advice’ as it is still unclear whether it is in their best interests to transfer their existing defined pension, and further analysis is therefore required.

To ensure you’re able to produce suitability reports for clients who have been through the ‘abridged advice’ process, we’ve since made some further enhancements to Genovo.

Basis of advice

We’ve added a third option to the Basis of Advice step in the Introduction section – ‘Abridged Advice’.

Recommended actions

You’ll also notice a change in the Recommended Action step of the Review of Your Existing Pensions Plans section, where you’ll find two new recommended actions available for selection.

These new recommended actions will only be available when you add a DB Pension to the plan summary step of the review section. Once selected, you can select / add advice reasons to justify the recommended action in the usual way. We have added a number of standard advice reasons for you to choose from, but remember you can always edit these or add your own.

New snippets

We have also introduced two new summary pages (based on the FCA’s suggested wording) to the Genovo report template – one for each potential client outcome. The relevant summary will be automatically inserted before the standard Executive Summary section whenever a recommendation is made in respect to a DB pension as part of an ‘abridged advice’ process.

Selecting ‘Abridged Advice’ will also insert a new snippet ‘Objectives & Scope of Advice (Abridged Advice)’ in the Introduction section of the report. This will help explain the purpose and the limitations of the ‘abridged advice’ process.  

Key disadvantages & tax implications

We’ve also added two new advice options to the Key Disadvantages & Tax Implications step of the Review of Your Existing Pensions Plans section, both of which are likely to be relevant in instances where you are recommending a client proceed from ‘abridged advice’ to ‘full advice’.

The Report Builder

As part of the ‘abridged advice’ process, The FCA have confirmed that advisers are only able to consider a client’s circumstances, objectives and attitude towards risk (see section 19.1A.11 G (3) of the FCA’s Policy Statement PS20/ 06 – Page 31 specifically). They aren’t able to consider the existing DB pension in any detail and a TVC should not be completed. With this in mind, the TVC step within the Review of Your Existing Pension Plans section will not be triggered when choosing either of the new recommended actions.

When you download the report to Word, you’ll notice that the appendix will include the standard pension-related Product Information and Glossary of Terms. If you’d prefer to leave these out, simply untick them in the Report Builder and they won’t appear in the appendix of the report.

The Template Library

To help aid your understanding of how all of these changes come together, we’ve also created a new Report Template called ‘Genovo Example: DB Pension Abridged Advice Unclear’, which can be found by clicking on the report templates icon on the main Genovo dashboard.

This new template has been designed to be used:

  • As the basis for creating your own reports;
  • As the basis for creating your own templates; and
  • As example reports to aid your understanding of the kind of information you need to include within the different report types, and to see how a finished report may look once it’s been downloaded to Word.

Summary of all updates and enhancements

Below is a summary of the changes that have been made

Section Wizards

Section(s)Step(s)Update / Enhancement
IntroductionBasis of AdviceA new option has been added:
- Abridged Advice
Review of Your Existing Pension PlansRecommended ActionThe following new Recommended Actions have been added:
- ‘proceed to full advice from abridged advice for’
- ‘Retain following abridged advice’.
Review of Your Existing Pension PlansRecommended ActionA number of new advice reasons have been added for selection for the new recommended actions.
Review of Your Existing Pension PlansKey Disadvantages & Tax ImplicationsTwo new advice reasons have been added.

Report Content Manager

Report Type(s)Section(s)Snippet NameUpdate / Enhancement
Suitability ReportExecutive SummaryDB Pension Summary Page – Abridged Advice RetainThis is a new snippet that will be triggered when 'Retain following abridged advice’ is selected.
Suitability ReportExecutive SummaryDB Pension Summary Page – Abridged Advice UnclearThis is a new snippet that will be triggered when ‘proceed to full advice from abridged advice for’ is selected.
Suitability ReportIntroductionObjectives & Scope of Advice (Abridged Advice)This is a new snippet that will get triggered when 'Abridged Advice' is selected in the Basis of Advice step.

Please remember the changes we make to the report template will only take effect in your reports automatically if the Genovo version of the snippet is selected as active in your Report Content Manager (it is by default).  For more information about the Report Content Manager and updating of snippets check out this video tutorial.

Let us know what you think

If you’ve got any suggestions – no matter how big or small – as to how we can improve Genovo, or there’s a new feature you’d like to see added, we’d love to hear from you. Send us a message with your thoughts and we promise we’ll get back to you.

Written by Richard Lent

Richard has worked in financial services for 20 years. Initially working in compliance, Richard later became an IFA. He is diploma qualified and has completed J04, J05 and AF3 qualifications, and continues to study towards chartered status. Richard also headed up the paraplanning function for a large directly authorised IFA firm, where he introduced Genovo as their report writing software of choice. It is this rounded knowledge of the financial services advice process and industry that makes him a valuable member of Team Genovo. Outside of work Richard enjoys walking in the Shropshire countryside with friends and recently took on the National Three Peaks Challenge. The rest of his spare time is spent with his young children.

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