You are here: AdviserArchive: December 2012

Archive: December 2012

This page is for Professional Financial Advisers only Latest from Cofunds - week commencing 10 December 2012

IMPORTANT NOTICE: Updated disclosure documents

From next week, our RDR-ready service is live, helping you manage your clients' investments through 2013 and beyond. To reflect this, we've also updated our disclosure literature, effective 17 December 2012.

We previously notified all advised and unsegmented investors about the changes to the Terms & Conditions of the Cofunds Platform and Customer Agreements.

The Terms & Conditions of the Cofunds Platform for self-directed investors are also changing, for both Explicit and Implicit Pricing Models. For self-directed investors in the Cofunds Pension Account (CPA), the relevant documents are the CPA Customer Agreements for Explicit and Implicit Pricing Models.

You'll need to provide the appropriate documents to your clients if you change their segment online or if you set up a trade for them from 17 December.

Your Agreement with Cofunds, which sets out all the terms that apply to advisers/intermediaries, has also been updated.

You can find all the updated disclosure and application forms on the Document Centre from Monday.

The changes are effective from 17 December 2012. For more information, please visit our RDR Page.

Cofunds RDR implementation date - This Monday

Next week we're making the final transition to RDR. This means that instructions for any advised business on which you wish to receive commission need to be with us by Friday 14 December - please make sure you're aware of the cut off times.

Want to make sure you're ready for RDR? Our RDR webpage has all the information you need including our helpful RDR Essentials guides, Q&As and all of our latest RDR news.

How to ensure your fees are paid

As we move to a fee-based world, we're having to make a change to the way you affirm your clients to a new fee model. From Monday 17 December, when a client is first assigned to your fee model, we'll need to see a signed 'Ongoing Fee Affirmation Form' before your fees can be paid to you. Please note - any clients already paying fees are unaffected and won't need to complete the form.

Not sure of the best way to manage your clients fees? Our helpful guide, 'RDR Essentials - Using the Cofunds Cash Account' could help.

From Monday 17 December, although fees will accrue from when a client is first assigned to your fee model, we require a completed 'Ongoing Fee Affirmation Form' that has been signed by your client, before your fees can be paid to you. The 'Ongoing Fee Affirmation Form' will be located within the Account Maintenance section of the website, replacing the tick box. You can also find it in the Client Maintenance section of the Document Centre.

You'll need to ensure that any clients you're yet to affirm via the tick box are affirmed by 5pm 14 December 2012. We'll need an 'Ongoing Fee Affirmation Form' for any un-affirmed clients after this point.

You don't, however, need to get clients who have been assigned to a fee model prior to 17 December to retrospectively sign the form.

The change affects both Advised and Self-directed Explicit investors. If you have any clients that you don't have a face to face relationship with, you may need to mail the form to them - we'll not be mailing investors with the form directly.

The Fee MI available within the My Information section of the website is the easiest way to check the status of your clients fee affirmation and if they're ready to pay your fees. From Monday 17 December you'll be able to access your Fee MI directly as a spreadsheet without having to convert the file first - similar to the Commission MI spreadsheet.

No changes have been made to the process for taking a one-off fee or taking product level fees on the Cofunds Pension Account.

Model portfolios & RDR

RDR will be implemented on the platform on Monday 17 December, meaning that the disturbance rules will be in place for all advised business. Make sure you're aware of how the changes affect model portfolios:

  • Manage your own model portfolios: if you run your own model portfolios and panels on Cofunds, and wish to move clients to an Advised Explicit segment, you'll need to set up new explicit model portfolios for them. You can set them up quickly and easily via our Research Centre. For help building model portfolios, take a look at the 'How do I?' section of the website
  • Morningstar OBSR model portfolios: Morningstar OBSR model portfolios that invest into commission-free share class funds will not be available from Monday 17 December. Their model portfolios for investment within commission-free share class funds will be available shortly
  • Rebalancing to existing: Rebalancing a model portfolio to the existing asset allocation set up prior to Monday 17 December, is not considered to be a new piece of advice and therefore would not cause a disturbance event. If this is the case you'll need to tick the relevant box when rebalancing
  • Rebalancing to new: You're unable to rebalance a model portfolio with commission-included share class funds to a new or updated asset allocation as it would cause a disturbance event. If you wish to move a client to a new model portfolio, you'd need to have created a new model portfolio within an Explicit Advised segment before performing a share class conversion on your client's assets into commission-free share class funds
  • Investing via an RSF: if you amend the funds a client invests into via an RSF, a disturbance event may be triggered. A disturbance event in this case would mean that all of the funds within a model portfolio would need to be converted to commission-free share class funds. In order to prevent this, and continue making investments into commission-included funds post RDR, you need to make any amendments to RSFs by 5pm Friday 14 December
  • Model portfolios without using the model portfolio tool: you may wish to set up these model portfolios using the tool by 14 December to ensure that when rebalancing to an existing asset allocation, a disturbance event doesn't take place.

The removal of the Advised Implicit segment

We're making the final transition to RDR on Monday 17 December - which will mean that commission can no longer be received for new or disturbed advised business.

The Implicit Pricing Model will only be applicable to advised investors with pre-17 December assets that are undisturbed, as well as any Self-directed Implicit investors you may have.

As a result we'll be converting all current Advised Implicit segments to Advised Explicit segments. This means that if you've already set up your own Advised Explicit equivalents to your Advised Implicit segments you'll find that you'll have duplicate Advised Explicit segments. You'll be able to move all clients from one to the other if you wish - however, please remember that you'll be unable to delete any segments that have had clients assigned to them.

Investors' assets within commission-included share class funds in the Explicit Pricing Model will not be subject to our platform charges until the assets are disturbed - take a look at RDR Essentials - Legacy Assets & Disturbance for more details.

Platform charges will not be charged on commission-included share class funds - even if a client is within a segment with explicit pricing. For more details on our platform charges - take a look at RDR Essentials - Platform Charges.

Other changes to look out for on Monday 17 December

Changes to the L&G product range

We've been working with L&G on the availability of their product range on the Cofunds platform as we move into a post-RDR world. Clients with existing assets can continue to top up their investments but the Portfolio Plus Pension, Portfolio Plus SIPP and the Portfolio Bond will be closed for new business from 14 December 2012.

From 17 December you'll be able to buy commission-free share class funds within the L&G Portfolio Plus Pension and the L&G Portfolio Plus SIPP when topping up collectives. Investments within these products or disturbed investments will be subject to the Explicit Pricing Model and the disturbance rules.

Existing clients can continue to top up into insured funds within the L&G Portfolio bond, L&G Portfolio Plus SIPP and Pension as per the current process. The LGII International Bond will remain available for new business for advised clients.

For any top up quotes please contact our Adviser Support Team on 0345 604 4001. (Calls will be recorded for training and quality purposes.)

Top up Application Forms will be available from the website from 17 December 2012.

How Cofunds Cash Reserve will work in a post-RDR world

Investments within the Cofunds Cash Reserve will continue to pay commission from 17 December. However, any additional investments, including buy, switch, transfer instructions or top ups via a Regular Savings Facility (including within model portfolios) after R4 will be classed as a disturbance event.

This will effectively switch off commission on a client's Cofunds Cash Reserve with all commission being rebated to the client's Cofunds Cash Account (this will appear as a 'Platform Rebate').

Interest payments will not be classed as disturbance.

When a disturbance event occurs in the Cofunds Cash Reserve, commission for the whole month within which the event occurred will be rebated to the client. Self-directed clients that are in the Implicit Pricing Model will continue to have commission paid on their assets within the Cofunds Cash Reserve. Assets will not be subject to disturbance.

Note: Next RSF payment causing disturbance will be on the 27 December 2012.

Thinking of re-investing a client's dividends?

From Monday 17 December, an investor can only set up new income mandates to reinvest their commission-free income into commission-free share class funds.

If an investor has an income mandate in place prior to Monday 17 December to reinvest dividends into their commission-included share class funds, they can continue to do so. They'll be unable to set up new, or amend existing income mandates to reinvest into their legacy commission-included share class funds from this date.

Adviser Support Team during the holiday period

With the holiday season just around the corner, we thought you'd like to know the opening times of our Adviser Support Team.

Our Adviser Support Team will also be available during the holiday period so feel free to call us on 0345 604 4001 if you need any help. (Calls will be recorded for training and quality purposes.)

  • Monday 17 to Friday 21 December - Normal 9am - 5pm opening hours
  • Monday 24 December - 9am - 3pm
  • Tuesday 25 December - Bank holiday, closed
  • Wednesday 26 December - Bank holiday, closed
  • Thursday 27 and Friday 28 December - 9am - 4pm
  • Monday 31 December - 9am - 3pm
  • Tuesday 1 January - Bank holiday, closed
  • Wednesday 2 January - Normal 9am - 5pm opening hours resume

Corporate actions

View details of recent and upcoming corporate actions.