Suitability Report
Jane Doe
Marketing Director
Age: 45
Family: Married, 2 children (ages 10 and 12)
Financial Situation
- Income: £120,000 per annum
- Expenditure: £6,000 per month (including mortgage)
- Assets:
- Primary Residence: £750,000
- Cash Savings (ISA): £50,000
- Existing Pension: £250,000
- Company Shares: £30,000
- Liabilities:
- Mortgage: £300,000
Target an initial income of £40,000 per year from age 65, with the flexibility to retire earlier if possible.
Timescale: 20 years
Provide for university education for both children, estimating a need for £50,000 per child starting in 8 years.
Timescale: 8-10 years
Grow surplus capital in a tax-efficient manner, with a medium-term view to potentially fund a property purchase for the children.
Timescale: 10+ years
Attitude to Risk
Balanced (Score: 3/5). Willing to accept a moderate level of risk for the potential of higher returns. Understands that the value of investments can go down as well as up.
Capacity for Loss
High. Client can afford to lose a significant portion of their invested capital without it impacting their current standard of living, due to strong income and existing assets.
Knowledge and Experience
Good. Has experience with ISAs and company share schemes. Understands the basic principles of diversification and risk vs. reward.
Sustainable Preference
The client has expressed no desire to ensure her investments are invested in an ethical manner.
Rationale
Investment Solution
The proposed investment solution is the Tatton Core Balanced portfolio. This portfolio has a risk profile of 3, which aligns perfectly with your 'Balanced' attitude to risk.
This solution is a core part of our firm's Centralised Investment Proposition (CIP). It has been thoroughly researched and benchmarked against other solutions in the market. We believe that Tatton and their Managed Portfolio Service (MPS) solutions represent the best of breed in terms of performance, cost, and risk management.
Platform / Custodian
The company that will hold and administer your investments is a platform called Transact. Transact has also been selected as part of our company's rigorously researched Centralised Investment Proposition. They are one of the largest and most financially stable platforms in the UK market, known for their excellent service and robust technology. Further due diligence on our choice of platform can be provided on request.
Review of Existing Arrangements
Product Reviewed: ABC Pension Plan
Reason for Replacement: The existing plan has high annual management charges (1.5%) and a limited selection of underperforming funds. It is no longer suitable for your objective of maximizing growth.
The new SIPP offers a charge reduction of 0.85% per year, saving you thousands over the term to retirement. It also provides access to a globally diversified portfolio tailored to your risk profile, improving growth potential.
Possible Disadvantages
- The value of your investments can fall as well as rise, and you may get back less than you invested.
- Past performance is not a reliable indicator of future results.
- Pension legislation and tax rules may change in the future.
- Transferring your pension means giving up any guarantees that may have been attached to your old plan (in this case, none were identified).
Costs and Charges Comparison
| Item | Existing Solution | Proposed Solution |
|---|---|---|
| Ongoing Adviser Fee | 0.00% | 0.50% |
| Platform/Provider Charge | 0.50% | 0.25% |
| Fund Management Charges (OCF) | 1.00% | Avg. 0.40% |
| Reduction in Yield (RIY) Effect of charges on future returns. | 1.50% | 1.15% |
The Reduction in Yield (RIY) figure shows the estimated impact of charges on the annual growth of your investment. A lower RIY indicates that more of your investment's growth is retained. The proposed solution has a significantly lower RIY, meaning substantial long-term savings.
Review and Sign
Please read this report carefully. If you are happy to proceed, sign and return the enclosed acceptance form.
Application Process
Once we receive your acceptance, we will complete and submit all necessary application and transfer forms on your behalf.
Implementation
We will notify you once the new accounts are open and the funds have been transferred and invested according to the plan.
Confirmation
You will receive a full confirmation pack with all policy documents and a valuation statement once the process is complete.