Class Two Licenceholders – Financial Advice Questionnaire
June 2017
Introduction
The statutory objectives of the Isle of Man Financial Services Authority (“the Authority”) are
to secure an appropriate degree of protection for policyholders, members of retirement
benefits schemes and the customers of persons carrying on a regulated activity; the
reduction of financial crime; and the maintenance of confidence in the Island’s financial
services, insurance and pensions industries through effective regulation.
By way of this questionnaire, we wish to reach out to our Class 2 licenceholders involved in
advisory business to find out more about the current status of the advisory sector that will
mutually help us in meeting these objectives. The two areas, which are discussed more fully
below, are Pensions and a follow up to a Financial Adviser questionnaire that was issued in
2014. Later in the year we expect to make a request for AML/CFT related data from all of
our licenceholders as part of the actions arising from the Island’s AML/CFT national risk
assessment work and the Moneyval evaluation. For completeness, this questionnaire is
being sent to all Class 2 licenceholders; however, not all parts of the questionnaire will be
relevant to all participants.
A summary of the results of the questionnaire will be shared with industry. Individual
licenceholders will also receive individual feedback from their relationship manager.
This questionnaire is a request for information under paragraph 2 of Schedule 2 to the
Financial Services Act 2008.
The closing date for responding to Part 1 of the questionnaire is 28 July 2017.
The closing date for responding to Part 2 of the questionnaire is 1 September 2017.
Please send responses in writing and preferably by email to:
Emma Murphy - Supervision Officer – Banking, Funds & Investments
Isle of Man Financial Services Authority
PO Box 58, Finch Hill House, Bucks Road, Douglas
Isle of Man, IM99 1DT
Email:
[email protected]
Telephone: +44 (0) 1624 689338
PART 1 – PENSION ADVICE
Licenceholder name
Date of submission
Name of person completing
this form
Further to the introduction of pension freedoms and associated regulatory requirements in
the UK, and prospective changes to the Island’s pensions’ legislation, the Authority is keen
to enter into early dialogue with its stakeholders to understand the potential impact of
these changes on both licenceholders and pension scheme members.
The Authority is also keen to understand the scope and scale of pension advice services that
are offered by licenceholders to Isle of Man residents.
Applicability of Part 1 to your business:
A.
Does your firm currently provide pension advice?
B.
Does your firm intend to offer pension advice in the next 18 months?
Y or N
If the answer to both A. and B. is No, there is no need to complete the remainder of Part 1
of the questionnaire. However, all Financial Advisers should complete Part 2 of this
questionnaire irrespective of the answers to the two questions above.
Y or N or
number
1.
Nature of current operations:
1.1
Does your firm provide advice regarding transfers from occupational UK*
pension schemes (defined benefit or defined contribution) to personal
Nonpension schemes?
UK
Does your firm provide advice regarding transfers from defined UK
benefit occupational pension schemes to defined contribution
Nonoccupational pension schemes or personal pension schemes?
UK
Does your firm provide advice regarding making payments to or
withdrawals from a personal pension scheme?
Does your firm provide advice regarding placing certain assets in
personal pension schemes which allow the member(s) to make
decisions about the scheme investments?
Does your firm provide advice regarding opting out or declining to
become a member of a pension scheme (occupational pension
scheme or personal pension scheme) which an employer contributes
to in favour of a personal pension scheme which an employer does
not contribute to.
1.2
1.3
1.4
1.5
1.6
Please state the (approximate) number of clients that your firm has
provided pension advice to in the last 12 months.
*In this questionnaire, ‘UK’ refers to transfers from an occupational pension scheme which is subject
to regulation in the UK (irrespective of where the member is resident).
2.
Nature of planned operations in the next 18 months:
Y or N
2.1 Does your firm intend to provide advice regarding transfers from UK*
occupational pension schemes (defined benefit or defined
Noncontribution) to personal pension schemes?
UK
2.2 Does your firm intend to provide advice regarding transfers from UK
defined benefit occupational pension schemes to defined contribution
Nonoccupational pension schemes or personal pension schemes?
UK
2.3 Does your firm intend to provide advice regarding making payments
to or withdrawals from a personal pension scheme?
2.4 Does your firm intend to provide advice regarding placing certain
assets in personal pension schemes which allow the member(s) to
make decisions about the scheme investments?
2.5 Does your firm intend to provide advice regarding opting out or
declining to become a member of a pension scheme (occupational
pension scheme or personal pension scheme) which an employer
contributes to in favour of a personal pension scheme which an
employer does not contribute to?
2.6 Have you received any enquiries in connection with pension
freedoms?
2.7 Do you anticipate any new business as a consequence of the proposed
introduction of further pension freedoms in the Island?
*In this questionnaire, ‘UK’ refers to transfers from an occupational pension scheme which is subject
to regulation in the UK (irrespective of where the member is resident).
If you answered ‘Yes’ to any question in section 1 or 2, please complete sections 3, 4 and 5
below. Otherwise please proceed to section 6.
3.
Capacity to provide pension advice:
3.1
Please state the number of individuals that your firm currently
employs who provide pension advice.
Do you plan to recruit any more staff over the next 18 months with a
view to accommodating an anticipated increase in demand for
pension advice?
If you answered yes to question 3.2, please state the number of new
employees that your firm intends to recruit to provide pension advice
during the next 18 months.
Has your firm had to turn away any prospective clients due to
insufficient capacity during the last 12 months?
Do you believe that your firm has sufficient capacity to meet a
potential increase in demand for pension advice subsequent to the
introduction of pension freedoms in the Island?
3.2
3.3
3.4
3.5
Y or N or
number
Y or N
4.
Competence to provide pension advice:
4.1
Does your firm have the ability to calculate transfer values and/or
verify whether transfer values have been correctly calculated?
Has your firm turned away any prospective clients in the last 12
months due to the perceived level of risk associated with defined
benefit pension transfer advice?
For each member of staff who provides pension advice, please list the qualifications
held by that individual.
4.2
4.3
Employee 1 Completed Qualifications:
Employee 2 Completed Qualifications:
Employee 3 Completed Qualifications:
If you need additional space, please use the blank space at the end of Part 1.
4.4 For each member of staff who provides pension advice, please list the qualifications
being worked towards by that individual.
Employee 1 Prospective Qualifications:
Employee 2 Prospective Qualifications:
Employee 3 Prospective Qualifications:
If you need additional space, please use the blank space at the end of Part 1.
5.
Professional indemnity insurance:
5.1
If you answered yes to question 1.2, is your firm’s professional
indemnity insurer aware that your firm is providing defined benefit
pension transfer advice?
Has your firm been told by an insurer at any point in the last 18
months that they are unable, or unwilling, to offer terms in respect of
pension business?
5.2
6.
Y or N
Additional information:
The Authority is also seeking to gain an understanding of any issues you currently foresee
relating to pension advice provision on the Island. Please provide any comments you
would like to make below or by attachment to this questionnaire.
Additional information - if necessary - to part 4 of the Pensions Advice questionnaire
PART 2 – QUESTIONS ABOUT THE FINANCIAL ADVICE MARKETPLACE
Licenceholder name
Date of submission
Name of person completing
this form
In early 2014 the then Financial Supervision Commission issued a questionnaire to Financial
Adviser licenceholders to find out more about the product range offered and income
streams. We wish to revisit this exercise to find out about changes over the intervening 3
years.
Who should complete this part of the questionnaire?
All licenceholders who provide advice (Class 2 (3)&(7), Class 2(3)(6) or 2(3)(6)&(7)) should
consider and answer this part.
Question 1 - Overview of Products and Providers
What types of products do you currently advise on and sell?
Please tick against any of the types you have i) sold in the past 12 months or ii) advised upon
in the last 12 months (e.g. previously sold products being monitored and reviewed for
customers).
Product type
Offshore Investment Wrap
Onshore Investment Wrap
Platform
Referral to discretionary manager
Direct regulated Collective Investment Scheme
Direct unregulated Collective Investment Scheme
Direct equity/Debt
Structured product
Other (please specify)
Sold in last 12
months
Advised on the
last 12 months
Question 2 - Income details
a.
Please complete the schedules below, detailing the sources of your income from Class 2
investment business activity (in monetary and percentage terms compared to total
income) during the 12 month period up to, and including, your last quarterly period. NB
please ensure that your answers relate solely to your Class 2 Investment Business work
i.e. not to include income from other streams such as General Insurance.
For the 12 month period ended ____________________________(insert date).
Table A - Source of income
Value (£)
% of total Investment
Business income
Value (£)
% of total Investment
Business income
Initial commission
Trial Commission
Initial fee
Periodic fee
Other (please define)
Table B - Source of income
(offshore and UK (RDR compliant)
products over the same period)
Offshore Product
Onshore Product
b. Rule 8.7 requires licenceholders to establish, implement and maintain a
remuneration policy. In relation to individual adviser remuneration please provide a
summary of your current remuneration policy by ticking against the best fit
description from the list below. Please also provide any other information you may
think is relevant.
Type of remuneration
Salary only
Salary and sales
Salary and profit share/bonus
Sales only
Other (please define)
Question 3 - Breakdown by top 5 investment products and product providers
Please list the top 5 investment products and providers which you advised during the same
12 month period covered in your replies to the earlier questions.
This information should be calculated in terms of both remuneration received and business
written.
Please confirm the percentage of your overall advisory business in terms of both
remuneration and business written this equates to.
a. Top 5 investment products
By Remuneration
Product Name
As a % of
income re
financial
advice
Number
of cases
By Investment
Value
Product Name
1.
1.
2.
2.
3.
3.
4.
4.
5.
5.
As a % of Number
Advisory of cases
Business
written
b. Top 5 product providers
By Remuneration
Provider Name
As a % of
income re
financial
advice
Number
of cases
By Investment
Value
Provider Name
1.
1.
2.
2.
3.
3.
4.
4.
As a % of Number
Advisory of cases
Business
written
5.
5.