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The tools

AdviserAsset currently offers six integrated tools to support advisers;

  • charge comparison tool, that compares the cost for access to funds via platforms and wrappers,
  • platform due diligence tool, that compares how well platforms meet the bespoke requirements of each adviser,
  • pension switching analysis tool that provides a holistic analysis of the switching options available,
  • pension income drawdown tool including life expectancy and annuity income options,
     
  • risk profiling tool meeting the requirements of FCA COBS 9.2
  • cash flow planning tool which is very easy to use but provides high levels of flexibility and insights.

Over 5,000 advisers/para planners and most leading platforms have access to our tools. 

The key differentiating features of each of the tools are as follows.

Charge comparison tool

  • Provides consolidated projections across all tax wrappers/products at all of the rates prescribed by the FCA. Multiple rates are critical, as most platforms and many products operate stepped and tiered charging structures. Price competitiveness can therefore change depending on the growth rate being considered. We also provide a calculation of reduction in yield.
  • Ability to project at fund specific growth rates; critical for some pension switching analysis.
  • Compares every permutation of solutions across multiple wrappers, both on and off-platform. This can result in a solution that includes both on-platform and off-platform products. The tool also considers the charges associated with third party pension wrappers that can be used in conjunction with assets held on platform.
  • Ability to compare more than one class of a fund in one comparison, including mirror funds. This is becoming increasingly important as the number of share classes increases.
  • Allows advisers to set up as many adviser charging styles are required.
  • Allows advisers to take account of special deals that have been negotiated.
  • Can filter-out products based on some 350 product features.
  • Includes ETFs and Investment Trust transaction charges.
  • Users can save their client details, investment portfolios, adviser charges, special terms and platform/product exclusions. Comparisons can project to any term and can take account of switch activity and existing product/platform accounts.

Pension switching tool

The AdviserAsset pension switching tool is the only tool in the market that enables advisers to take account of the full cost of the pension solution including any platform charges and the impact of any non-pension investments. As well as benefiting from all of the functionality of our charge comparison tool, the pension switching analysis tool includes;

  • Ability to capture ceding scheme data on a monetary or SMPI basis, including cash transfer value, regular contributions, PCLS, pre A-day PCLS protection, protected rights and projected fund values at retirement age.
  • Help in translating fund or asset specific ceding scheme growth rates into an overarching growth rate for comparison purposes.
  • Ability to record any benefits or guarantees that might be lost on transfer.
  • Consideration of the full investment scenario being analysed, both the pension switch and other pension and non-pension investments. This is critical as in ‘platform world’, the charges that apply to the pension switch can be influenced by other investment held or being made at the same time.
  • Consolidated analysis of the pension switch element of the investment scenario being considered, including comparison of fund projections and critical yield, PCLS, death benefits, early transfer values and RU64 analysis.
  • Detailed ceding scheme analysis, differentiating between fund projections and critical yields for protected and non-protected rights and redirection of regular contributions. The detailed analysis also includes PCLS and death benefits.
  • Pre-population of the FCA's pension switching template.

Pension income drawdown tool

A unique tool that considers both plans in accumulation and in drawdown. The tool enables various income profiles to be dynamically modelled so that the point at which the fund might be depleted is clear. The tool enables tax free cash to be flexed in line with the recent announcement on the removal of the TFC restriction. Annuity income options are also shown throughout the drawdown planning cycle highlight when it might be viable to move to an annuity. All this is shown against the context of the client's life expectancy.

Platform due diligence tool

This is a unique diagnostic tool which enables advisers to specify their platform requirements across the areas recommended by the FCA for platform due diligence. Specifically, this tool enables advisers to;

  • Record platform requirements across some 300 platform features and functionality as being either a must-have, nice to have, or not required. Requirements can be specified for the practice as a whole, for each client segment or for individual clients.
  • Determine how well each platform meets adviser requirements across a range of areas including fund and asset classes, tax wrappers, functionality, tools, accessibility and user support.
  • See how other advisers have rated the service of platforms, covering remote sales support, BDM support, transaction processing, client reporting and user support/training/help.

Risk profiling tool

Our risk profiling and asset allocation tool has been built specifically to meet the large number of concerns raised in the FSA Guidance Consultation on risk profiling, and also the concerns raised in the more recent global review of risk profiling best practices undertaken for the Ontario Securities commission in which the UK FCA participated. Both reviews found issues in some 82% of tools and questionnaires reviewed. The issues addressed by our tool are too many to list here, but include;

  • Having a straightforward methodology making it easy for advisers to explain to clients and, most importantly, to the FCA,
     
  • Enabling advisers to properly account for the information relevant to assessing the risk a client is willing and able to take as outlined in FCA COBS 9.2,
     
  • Separation of the four key elements of suitability to meet the regulator's concerns over the 'conflation risk',
     
  • Providing clear descriptions of risk categories and a clear line-of-sight between the client's attitude to risk and the underlying asset allocation,
     
  • Asking questions that deal with the many issues raised in the FCA Guidance Consultation paper on the quality and construction of questions,
     
  • Providing ongoing checks of the consistency of client answers throughout the questionnaire, and raising broader advice considerations.

Our risk profiling tool is likely to be of considerable interest to any advisers seeking a robust easy to understand and easy to use tool, and;

  • Advisers who are currently using risk profiling and/or asset allocation tools but have reservations about the extent to which the tools fully meet the requirements of the two regulatory reviews mentioned above (82% of tools reviewed by the FSA had weaknesses that could lead to flawed outputs),
     
  • Advisers who would be concerned by questions from the regulator around the detail of how the tools they are using actually work in assessing risk and aligning risk to assets,
     
  • Advisers who are currently outsourcing asset allocation either via a DFM or multi-asset fund solutions, and are seeking a robust lower cost solution,
     
  • Advisers who wish to continue to run their own risk assessment and asset allocation processes, but are seeking an external source to benchmark/test against. 

Cash flow planning tool

The AdviserAsset cash flow planning tool combines speed and ease of use with powerful planning features. The tool includes the ability to;

  • set income and expenses which can fluctuate over time to reflect the most varied of client circumstances,
  • apply any taxation adjustment and undertake taxation what-if analysis,
  • easily toggle between absolute values and values in today’s terms,
  • stress-test your plan by applying user defined market events, or by quickly and easily running Monte Carlo simulations that are fully integrated with the cash flow plan,
  • take snap-shots of the emerging plan as-you-go to provide a powerful set of easy to understand graphics for your client report.

This tool has been built to be flexible enough to handle the most challenging and complex of client circumstances, but also to be incredibly quick and easy to use.


 

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Consultation

We have consulted extensively with advisers, platforms and product providers throughout the whole development lifecycle of the tools; design, specification, build and particularly testing.

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Comparisons

It is becoming increasingly difficult to compare platforms and products. More platforms are moving to stepped and tiered charging structures. Multiple classes of the same fund can co-exist on a platform. Suprisingly, we have found no platforms or tools that are capable of creating illustrations that calculate the impact of consolidated charges across more than one tax wrapper at all growth rates prescribed by the FCA.

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