Reviewing a client’s existing drawdown plan is a regulatory requirement and is a regular occurrence for any adviser with retired clients. This article provides a step-by-step guide as to how a Writer user can quickly and easily write a brief, concise and compliant report to a client reviewing their existing drawdown plan.
1) Select or add the client
Go to Write report and select or add the client(s) for whom you wish to write the report.
2) Select the Report Creation Method
Although this article walks you through the steps of building a report 'from scratch', it is worth bearing in mind that there is already a Genovo report template covering this advice scenario: Genovo Example: Drawdown Review to save you time and help further speed up the report creation process for you.
3) Create the report
In Report Details, give the report a name and select the Report Type. Assuming you're creating the report 'from scratch', we'd suggest using the Review report – recommendations . However, it is also possible to use the Suitability Report
4) Add the required report section
You’ll then be directed to the Report Builder where you should add the necessary sections from the 'Available sections' drop down, which in this instance will be:
- Review of Your Existing Retirement Income Plans
- Recommended Investment Strategy (if appropriate)
5) Complete all section wizards
Next you'll need to step through the section wizards of all the sections that require your input, starting with the Introduction section.
6) Complete the Introduction section
Progress through the steps of the Introduction section in the usual way.
When you reach the Client Objectives step you should select or add the advice option(s) that accurately reflect the client's objective(s) and add comprehensive Know Your Client (KYC) information to ensure you fulfil the regulator’s expectations of you in terms of documenting a client's objectives. Alternatively, you can add the client's objectives as free text.
7) Complete the Client Risk Profile section
It's in this section that you will confirm the client's attitude to risk and capacity for loss, as well as their knowledge and experience.
8) Complete the Review of Your Existing Retirement Income Plans section
It’s here you’re going to include some basic information about the existing crystallised pension plan(s) you are reviewing.
a) Plan Summary step
Remember you don’t have to enter a value for all fields in the Plan Summary step, and fields which are left empty won’t be included within your report.
However, for a drawdown review, there are some essential fields, such as the fund value, income currently being taken, plus the compliance requirements of comparable annuity, critical yields A and (if applicable) B, and the age that the funds might be exhausted.
You may also wish to include details of the plan’s Current Investment Strategy.
b) Plan Benefits & Features step
Highlight any benefits or features associated with the individual retirement income plans.
c) The Current Plan Charges step
Next, summarise the ongoing charges of the plans being reviewed in the Current Plan Charges step.
Note that if you’ve included the plan in a previous Genovo report, you can have the charges pulled into the new report from the previous report by enabling Predictive Plan Charges.
d) Recommended Action step
In this step, you will need to confirm what action you are recommending in respect to each plan and the reasons to support the recommendation.
- ‘retain’ – if you’re reiterating that the plan remains suitable for the clients purposes.
- ‘maintain the current withdrawals from’ – if you’re recommending that the current rate of withdrawals are suitable and appropriate the clients circumstances.
- 'take a revised income from' - should the income levels need to be adjusted.
- 'start drawing an income from' - if you are recommending that the client begins taking an income.
- 'take a tax-free lump sum from' - if you are recommending that the client takes TFC.
- 'take a taxable lump sum from' - if you are recommending that the client withdraws from the taxable element of the pension.
If your recommendation is also to switch the investments, you’d use:
- 'switch the underlying investments of' - if you are making any changes to the current portfolio/investments of the retirement income plan.
- 'switch the model portfolio of' - if you are making any changes to the current model portfolio of the retirement income plan.
- 'rebalance the existing portfolio of' - if you are retaining the current portfolio but switching the underlying investments to restore the original portfolio asset allocation.
There are other scenarios that can be accommodated through the variety of recommended actions available but the above represent the most common options.
You should also ensure that after you’ve selected the appropriate recommended action, you also add some associated Advice Reasons – this is the ‘why’ part of the advice. Just click the Add advice reason hyperlink and then select from any of the standard advice reasons, or of course, you can add your own custom advice reason.
e) Recommended Withdrawal (if applicable)
If you select a recommended action that involves drawing an income from the plan, a new step will be automatically generated in this section that allows you to input specific details about the withdrawal.
f) Revised Plan Charges (if applicable)
If you select a recommended action that could potentially lead to a change in the charges of the plan, an optional step will automatically be added to the section allowing you to highlight these changes.
If you leave this step blank, then it will not appear in the report.
g) The Key Disadvantages and Tax Implications step
It’s here that you can confirm any disadvantages associated with the recommendation being made, such as the triggering of the MPAA or being moved into a higher tax band.
9) The Recommended Investment Strategy section (if applicable)
If you’re recommending change to the underlying investments, you’ll need to complete the Recommended Investment Strategy section to detail the investment strategy of the plan you’re recommending.
10) Complete the Important Information section
This is the last section you’ll need to complete and is self-explanatory.
11) Tailor the structure of the report
Having completed all of the section wizards you should then tailor the structure of your report by unchecking any sections you do not wish to include in your report and then change the sort order of any sections to reflect your personal preferences.
You’ll find more information about how to remove sections from your report here.
You'll find more information about how to reorder the sections in your report here.
12) Edit the report
Having created the framework of the report of the report with 98%+ of the content already included as an initial draft in the Report Builder, both Writer and Reader users can then make any final tweaks to the content of the draft report in the Report Editor. To open the report in the Report Editor click Create / Edit report.
Having created the report, you may then wish to convert it into a template and save it to your Report Template Library to use as a starting point for creating future drawdown review reports.