July 2023
Business updates
Nucleus wrap updates
Events
News archive
Welcome to Illuminate News
Welcome to our July edition of Illuminate News – we’ve plenty of updates to share as Summer gets fully into its stride.
We published our annual results last month for the first full year of trading since our new group was formed. I’m delighted the numbers show the benefits our combined scale is starting to deliver, with a focus on investing in our products, service and price for you and your clients. Find out more on our business updates page.
With the deadline fast approaching, we recognise that Consumer Duty is at the forefront of a lot of your minds, so we’ve been doing as much as we can to help. Our dedicated hub has a wealth of information to help you with your planning. There’s also time to sign up for the last two webinars with Christian Markwick from The Verve Group. You can register via our events page.
Our acquisition of Curtis Banks continues to progress through regulatory approvals. The timeline for completion is expected to be in Q3. We’ll continue to keep you posted on progress.
I hope you find this edition of Illuminate News interesting and useful. As always, please get in touch if you have any feedback.
Richard Rowney
Chief Executive Officer
In this issue of
Illuminate News...
Business updates
Read about our latest group news and how we’re using our scale to
invest in our products and service.
Nucleus Wrap updates
Here you’ll find information on the Nucleus Wrap platform, including our regular 'You said, so we did' feature.
Events
Our events provide access to technical experts and leading industry commentators to help you gain the knowledge you need.
James Hay Online updates
Keeping you informed about the latest improvements to the James Hay platform.
Using our financial strength to benefit our customers
In May we released our 2022 financial results - the first full trading year since Nucleus Wrap and James Hay Partnership came together. It’s been a year of significant progress and we’ve started to see our strategy deliver results.
We've always said platforms require scale to generate the profit needed to invest. These strong results illustrate this and enable us to keep investing in our products, service and price. In 2022, we invested £12.6m in technology and a further £4.5m in delivering even better service.
This helps us to deliver great financial outcomes for your clients, ultimately helping you to make their retirement more rewarding.
How can we help you get ready for Consumer Duty?
With less than four weeks until the 31 July Consumer Duty deadline, we’ve listened to your concerns about how to prepare. We understand how busy you are, so here’s how we can help simplify things.
Consumer Duty hub
Our Consumer Duty hub is designed to support you in navigating the FCA ask. It provides access to key material, including:
- A guide to Consumer Duty
- Advice on how to approach your planning
- Consumer Duty checklist
- A cost of advice template in partnership with The Verve Group
- Retirement guide from The Verve Group
Consumer Duty webinars
We’re hosting a series of online events with Christian Markwick from The Verve Group covering everything you need to be Consumer Duty ready. You can watch recordings of the six sessions that have already taken place, and there’s still time to sign up for the remaining two:
18 July:
How to test and evidence consumer understanding, linked to terms and conditions
By attending this session you'll be able to:
- Understand how to vary communications based on your client data
- Explain and identify the various options for testing your consumers understanding in line with your own communication methods
- Consider internal training and evaluate what may be required
15 August:
How to test and monitor outcomes to ensure you’re consistently staying compliant
By attending this session you'll be able to:
- Understand how to effectively monitor and evaluate outcomes
- Identify where customers are not receiving good outcomes
- Evaluate your own processes and consider if any adaptations and changes are required
Each session is one hour and will be CPD accredited.
Illuminate articles
We’ve a number of articles on Consumer Duty written by industry experts available on Illuminate - our online hub. These are quick and easy to read, written to help you with your planning and understanding of the FCA requirements.
Spring Statement: helping your clients pay more into their SIPPs
As we mentioned in the last edition, Jeremy Hunt’s Budget proposal to remove the lifetime allowance (LTA) could mean many clients restarting or increasing their SIPP contributions.
And it may only be a limited window of opportunity, with a potential Labour Government making noises they may remove these new freedoms.
We’ve created a dedicated resources page to help you cut through the noise and clarify the opportunities this presents for your clients, with a reminder of what actions you can take. It also includes a video in which some members of our Distribution team discuss these opportunities.
Choosing the right platform
Platform due diligence is even more important in light of Consumer Duty, so we’ve created a dedicated page on our website with the information you need.
The page contains useful information on our financial strength, a welcome to Nucleus summary brochure and a detailed due diligence support guide. All of these are designed to help you make your review as straight-forward as possible.
Helping you understand recent legislative changes
Our technical specialists have been at work simplifying recent legislative updates to help you understand how these might affect your clients.
Neil MacGillivray looks at the changes introduced in the Spring Budget to make the Capital Gains Tax rules fairer for spouses and civil partners who are in the process of separating. They’ll allow them more time to transfer assets between themselves so they’re not rushed into making rash decisions to try and avoid a potential tax liability.
This Tech Talk shares useful insight to equip you in supporting clients who may be facing this scenario.
The second Tech Talk explores tax changes being introduced to simplify the administration of trusts and estates.
Though the changes are minor, they’re expected to affect an estimated 37,000 individuals each year who are beneficiaries of trusts or estates.
Sharing our sustainability activity and plans
The FCA is creating a regulatory framework to support the UK’s commitment to achieve a net zero economy, as well as other aspects of the sustainable investing roadmap, such as transparency on climate change.
In line with the FCA’s Climate-related disclosure rules, from July 2023 we’re:
- Making our climate-related disclosure report available on our website. This outlines how we manage climate-related risks and opportunities when running our business.
- Including wording in customer pension statements that contains a hyperlink to this report. It’ll also let them know they can refer to asset manager websites for more information on asset managers’ disclosures.
6-2023
You said, we did
You said..
Speedier application of re-registration of units.
We did..
We now apply a 20% tolerance between the units keyed and the units shown in the valuation or fund manager’s confirmation. We’ll accept the valuation to allow the re-registration to proceed or apply the units to the account without delay. We’ll also raise a Jira to notify you of this action, instead of asking for permission to proceed.
Inter-account transfer form
Just a reminder, when signing an inter-account transfer form on behalf of a client, this can only be done up to the value of £20,000. Anything over this amount will need a client signature.
Cash interest rates
The way we manage platform cash provides a range of benefits and protections for you and your clients.
- We’ll pay your clients 2.12% in Q2, up from 1.79% in Q1.
- Significantly increased FSCS protection through our panel of 9 carefully-selected banking partners (more than any other platform).
- Our expanding range of cash investment options include gilts, cash funds and competitive fixed term deposit and notice accounts.
Our cash interest rates are regularly disclosed and fully transparent, below and on our website.
|
|
Rate of interest earned | Rate of interest paid |
|---|---|---|
| 2022 Q1 | 0.02% | 0.02% |
| 2022 Q2 | 0.05% | 0.05% |
| 2022 Q3 | 1.80% | 0.48% |
| 2022 Q4 | 2.81% | 1.23% |
| 2023 Q1 | 3.55% | 1.79% |
| 2023 Q2 | 3.99% | 2.12% |
Senior managers and certification regime (SM&CR)
It’s important that you and your firm keep us up to date with any changes to advisers and Nucleus platform users within your business.
Has anyone retired, moved on, changed name, gone on maternity/paternity leave or are no longer certified as fit and proper to perform their role? You can download a list of Nucleus platform users by accessing the platform login information on the reports tab of the platform.
If there are any changes, please let us know by raising a Jira and selecting the issue type ‘adviser request’.
Pension transfers permission
As part of our regulatory responsibilities, we must ensure advisers have the necessary pension transfer permissions to advise on all defined benefit (DB) transfers and pension transfers with safeguarded benefits.
If we're unable to evidence this via the FCA register, the transfer will be rejected and we’ll ask for the name and FCA number of the pension transfer specialist who gave advice on the related transfer. This will delay the transfer process and may also jeopardise any guaranteed transfer values if we can't process this on time for you.
To prevent any delays, please ensure the adviser on the transfer is listed on the FCA register.
Pensions: adviser charging
We understand that your clients may prefer to have one cumulative adviser fee deducted from one of their accounts rather than individual fees deducted across multiple accounts. For some wrappers this is an acceptable approach.
However, HMRC rules only allow adviser charges (i.e. ongoing adviser charge (OAC), ad hoc fees, initial fees) to be taken from the pension account if the advice is solely in relation to the pension scheme the fee is being taken from. For example, if your client has an ISA and an Onshore bond you can’t charge one OAC from the pension account which covers the value of all three tax wrappers. In addition to this, you can’t take a fee from one family member when it relates to advice on the pension for other family members.
If any of your clients’ accounts are set up in this way, please get in touch so we can correct the pension account and avoid an unauthorised payment and the associated tax charges this attracts.
You can find the detailed HMRC rule here.
Client nationality identifiers
When trading any exchange traded instruments (e.g. equities, ETFs) we’re required under Mifid II to report transactions to the FCA.
One of the requirements is to hold client identifiers specific to a client's nationality. This table will help you provide the correct identifier for your client’s nationality. Where an identifier hasn’t been provided or is in an incorrect format, we may not be able to carry out your instruction until the ID has been confirmed.
To avoid trading delays or cancellations, please ensure you provide the client's national identifier correctly and in accordance with the guidance in the table. When creating a client or amending an existing client, the nationality selection will prompt the ID required. For some nationalities no ID is required. For nationalities not listed, please use a passport number.
Illuminate Live summer series
We’ve added new virtual events to our schedule, to help you keep on top of your technical knowledge. This time our technical experts will be joined by financial wellness specialist, Nick Elston.
5 July:
Annual and lifetime allowance changes with John Dunn, Technical Manager, Pensions
John will examine the changes affecting the annual and lifetime allowances that were announced in the budget earlier this year. The changes ease the existing tax restrictions and offer opportunities for some savers to engage in future pension funding and extract benefits in a more tax efficient manner.
12 July:
Money and mental health with Nick Elston
Nick will explore financial wellbeing from a ‘lived experience’ perspective - looking at the impact of money on mental health through emotionally led insight providing you with tools, tips and hacks for life and in business.
Illuminate Live - Helping you prepare for
Consumer Duty
With the first Consumer Duty implementation deadline fast approaching, are you feeling fully prepared?
To support you, we've teamed up with Christian Markwick from The Verve Group, to bring you a series of eight online events that will clarify what you need to consider for Consumer Duty. They’ll help you establish how you can adapt your business to be ready and compliant - and importantly, evidence you are ready and compliant.
Each online session will last for one hour and is CPD accredited.
18 July:
How to test and evidence consumer understanding, linked to terms and conditions
By attending this session you'll be able to:
- Understand how to vary communications based on your client data
- Explain and identify the various options for testing your consumers understanding in line with your own communication methods
- Consider internal training and evaluate what may be required
15 August:
How to test and monitor outcomes to ensure you’re consistently staying compliant
By attending this session you'll be able to:
- Understand how to effectively monitor and evaluate outcomes
- Identify where customers are not receiving good outcomes
- Evaluate your own processes and consider if any adaptations and changes are required
6-2023