Due Diligence Pack. For Financial Advisers

Transcription

1 Due Diligence Pack For Financial Advisers

2 Note from John Fox, Managing Director Liberty SIPP has been in the SIPP market since 2007, a late entrant that learned from the mistakes of its competitors, closely followed how the market has developed and most importantly listened to its customers to provide a simple pension product to meet their expectations. As a result, Liberty is now one of the fastest growing companies in the sector and is seen by its introducing financial advisers as a forward thinking company which has the technical and administrative expertise that offers solutions specific to their customer s needs. From the outset Liberty has set out to: Provide competitive fees that would be accessible and easy to understand; Ensure that success in the marketplace didn t come at the expense of our customer service; Have shareholders and directors, that are committed to investing in the business and building up strong reserves to ensure stability and show our intent to our customers and staff Liberty have never issued a dividend; Only administer pensions and not seek to dilute our brand with any associated services or cross selling; And only take on work that we felt we could manage without customers suffering from a breakdown in service levels and be prepared to turn it down should there be any doubt about Liberty s ability to provide agreed service levels. I trust that this document, which contains information about our company, systems and structure gives you the confidence to view Liberty as a key partner to your business. I sincerely believe that Liberty SIPP and our learning, customer focused and can do culture will add serious value to your advisers, staff and clients. We look forward to working with you. John Fox October 2017 Liberty is now one of the fastest growing companies in the sector and is seen by its introducing financial advisers as a forward thinking company which has the technical and administrative expertise that offers solutions specific to their customer s needs. 2

3 A few facts and figures to kick things off Date company established September 2007 Date of entry into SIPP market March 2008 Assets under administration (January 2018) 2.35 billion Average SIPP size (September 2017) 200,000 Head Office Bury, Manchester Ownership Privately owned (see following pages for more details) No. of advice firms working with Liberty SIPP (January 2018) 695 Members of staff (including directors) 51 No. of SIPPs (January 2018) 10,961 3

4 Structure Liberty SIPP Limited is the Establisher and Administrator of the Scheme. Liberty Trustees Limited is the trustee to the Scheme. Liberty SIPP Limited is authorised and regulated by the Financial Conduct Authority (FCA) registration number Liberty SIPP s permissions from the FCA is for the establishment, operating and winding up of personal pension schemes (including SIPPs). Liberty SIPP Limited is not regulated to provide investment advice. Liberty always recommends that all clients seek financial advice from a suitably qualified adviser. Liberty SIPP Limited is not authorised to hold client money, but can control client money. There are no funds held on its own account. All client s fund and assets are held separately and in accordance with the FCA client money rules. Assets held in the SIPP are legally owned by Liberty Trustees Limited who hold the assets on behalf of members. For property purchases, assets are held by members as co trustees with Liberty Trustees Limited. Liberty Trustees Limited is a non-trading company. Directors and Share Ownership Directors Company Secretary & Director Company Director Company Director Company Director Company Director Company Director Main Shareholders Ian Currie John Fox John Fox Ian Currie Julie Dean Michael Taylor Matthew Rankine David Southworth For more details on the Liberty SIPP directors, please visit our website board-of-directors. Financial Information When choosing a SIPP provider for your clients, financial stability will be at the forefront of any due diligence process. Liberty is run on a very streamlined basis with a low-cost base and financial strength giving us the flexibility to respond to changes within the marketplace and regulatory environment. This gives customers confidence in the company. Liberty SIPPs board have a long-term plan for the company. They are enjoying what they re doing and see lots more growth in the SIPP market, as more and more money enters defined contribution schemes. Liberty SIPP can confirm that they are not looking to purchase any other SIPP businesses or book of business as this could dilute the brand and create unnecessary administration issues which have arisen in some of Liberty s competitors. Since the company s inception in 2007 it has achieved year on year growth by listening to clients and developing products for different niches within the SIPP market which has also helped to broaden its customer base. The latest set of audited company accounts for the year end March 2017 shows a 40% increase in revenue and a profit of over 400,000 which represents a 20% profit margin. This performance illustrates that Liberty SIPPs investment in people and technology over the past few years is working. Forecasts for the current year are targeting a 25% profit margin as we continue to utilise technology to add greater efficiencies. 4

5 Regulatory Capital Liberty SIPP comfortably satisfies the FCA s capital adequacy requirements. For more information on current capital reserves, please get in touch with the sales team. Liberty have implemented a capital adequacy plan based around our forecasts for the next 5 years. This plan is analysed at the monthly board meetings to ensure that capital resources are constantly monitored and changes made where appropriate. Liberty SIPP comfortably satisfies the FCA s capital adequacy requirements. Business Model The Liberty business model is very simple. We have a cost effective product with tight controls of overheads, whilst utilising technology and creativity to implement time saving processes that don t impact service levels. The primary Liberty product is the Liberty Option SIPP, which is where most of our growth comes from. We also have contracts in place to provide third party SIPP administration, usually to Financial Advice or Investment Management companies. Whilst there is a strong focus on the development of new sales and relationships with financial advisers, Liberty s business model is highly dependent on retaining clients, as the value of a SIPP company is in its recurring annuals. The Liberty business development team is trained to manage existing clients and relationships, as well as finding new ones. Scalability As mentioned Liberty SIPP have allocated a large amount of resource towards their systems and technology. This was done so that the business can grow without their service levels being affected something that is key to the board of directors. The levels of business that Liberty SIPP administer has steadily grown over the past few years and nearly 2,500 new SIPPs were setup in the 2016/17 financial year. We now have around 2billion of assets under administration. During this time Liberty s clients and financial advisers were still experiencing swift turnaround times for new business, transactions and communication via or telephone. Liberty s investment into the customer services tool, Zendesk, reinforces our commitment to strong personal customer service. We are one of the fastest organically growing SIPP providers in the market. The plan for Liberty is to become a leading SIPP provider in the UK, which is why there is a continual focus on improving systems and service. The focus of the business is on pensions, there are no distractions on any other areas of business or products. We are one of the fastest organically growing SIPP providers in the market. The plan for Liberty is to become a leading SIPP provider in the UK, which is why there is a continual focus on improving systems and service. 5

6 2018 Awards Liberty SIPP won Best SIPP Provider at the 2016 FT and Investors Chronicle Wealth Management Awards. This was voted for by their readers and shows that Liberty SIPP are well regarded in the industry. They were also nominated for best pension provider at the 2017 Money Marketing awards alongside some huge businesses in the pensions market including Aviva, Aegon and Old Mutual Wealth. On top of this the Liberty Option SIPP has been awarded 5 stars by Defaqto since Liberty Option SIPP has been awarded 5 stars by Defaqto since Systems and Controls These really are the bedrock of any successful organisation and Liberty have developed their own systems and controls by looking at what works well throughout the SIPP industry and asking their clients what aspects of Liberty s service they like. Liberty SIPPs administration and illustration system is powered by CTC Software. Through the help of CTC large amounts of the administration process is automated, helping to provide consistent service levels, reducing the risk of errors. We have a stable and motivated workforce with low levels of attrition. We operate a relatively flat organisational structure where everybody is recognised and respected. CTC company overview CTC delivers web based software solutions for the pensions, savings, investments and insurance markets. Market ready solutions tailored to client needs have been developed using CTC s Elements software suite for the last twenty years. CTC works closely with clients applying commercial and strategic insight to create unique innovative business solutions that generate rapid benefits. The founding directors of CTC have built a long serving organisation where everyone is fanatical about finding quick and sure ways to help clients do smart things with software. The Elements software suite uniquely brings together business processing and financial modelling capabilities delivered online through the web, tablets and mobile devices. Components in Elements can be used to fill a very specific gap, fulfil a particular business need or provide an end to end strategic platform. CTC has a proven track record of evolving and adapting Elements rapidly to support an ever-increasing range of financial products and services. CTC work with a number of the largest providers in the retirement and pensions market. 6

7 Culture Since starting Liberty, the managing director John always wanted the company to be a place where he would like to work. Having worked for a number of companies with differing approaches to the management of their people he felt he had seen enough to be sure how he wanted Liberty to operate. The Liberty team is a distinct bunch of people who have all gelled together to make it a highly efficient yet enjoyable place to work. We feel that having a friendly and respectful culture helps us in our dealings with our customers. There are no separate offices at Liberty and the management team work in the centre of an open plan office with its flat organisational structure. Staff The staff are critical to the business and maintaining high service levels. At the start of the 2017/18 financial year, Liberty SIPP increased the number of administrators by a third and has recruited individuals with SIPP or financial services experience. Attrition rates are good in that most people that come to work at Liberty stay at Liberty helping to increase morale and performance. All staff are on a bonus system which revolves around Liberty s turnaround times. However, in order to keep the quality high, an element of the bonus is linked to the accuracy of their work. The final part of the bonus is linked to total SIPP sales within the quarter, as every member of the Liberty SIPP team helps to generate more SIPPs by providing our Financial Advisers and clients with the service they expect from Liberty The staff are critical to the business and maintaining high service levels. Administration Structure The administration team is split into different teams that cover all aspects of SIPP administration. There are: Customer services; New business; Banking and Reconciliations; Investments; Drawdown; and Property. The benefits of this structure ensure you are speaking to skilled staff with technical knowledge and experience within that area. Financial Services administration is a very technical and skilled job making it very difficult for one administrator to excel in each area. We do not want our administrators to be a jack of all trades. 7

8 Training & Competence A commitment to training is at the heart of Liberty s culture. As well as following the CII examination route Liberty also provide in house training with regular updates about developments that might impact customers or advisers as and when required. Each member of staff has their own individual training file. Performance and competence are reviewed with regular appraisals and an emphasis on customer service is a core behaviour we look to develop. This training is conducted under the supervision of the management team and is backed up with internal control checklists throughout the administration process. Liberty SIPP also runs technical sessions out of work hours to delve deeper into technical areas of pensions. Even though these gatherings are non-compulsory, most administrators stay behind to further their development. A commitment to training is at the heart of Liberty s culture. Treating Customers Fairly Liberty is one of the very few SIPP companies lucky enough to have been set up with the RDR in mind. From as early as 2007 Liberty wanted to develop a SIPP product that would be viable and possibly unique in the post RDR financial world. TCF is at the forefront of everything they do and have constantly sought to develop a SIPP product which meets the expectations of clients and their financial advisers and treat them as a valuable resource in learning how to become a better SIPP provider. To develop a product which meets these criteria, Liberty have: a) Introduced a clean pricing structure written in plain English which is simple for advisers and their clients to comprehend. b) Liberty s initial and continuing fees are communicated clearly to the client in all their welcome letters. c) Clients are given contact details for the administration team who will look after every aspect of the management of their SIPP. d) From feedback from clients, the application process has been simplified to enable clients to set up their SIPPs in an accessible and fully informed way. The online application developed for the Option SIPP has received praise for its simplicity and clarity. e) Constantly changed their terms and conditions and key facts documents to make them more accessible and fairer for clients and written in clear, concise English. f) Made sure all information is readily accessible to advisers and their clients from the website and when requested by next day delivery. g) There is a great emphasis on in-house and external training to ensure that staff have sufficient knowledge, skills and experience to meet customer expectations. h) The minimum qualifications for entry level to the administration team is targeted at graduates and all members of staff become members of CII and follow their qualification route. i) Liberty have reduced their transfer out fee to ensure there are no barriers to exit for customers. j) A fair and impartial approach to handling customer complaints. k) Developed the Liberty Option SIPP which has a transparent pricing structure, can be set up online, has inherent flexibility and can be set up to the client s individual requirements. 8

9 Investment Choice and Due Diligence Liberty SIPP haven t accepted any new non-standard investments since 2013, concentrating solely on the standard investment market. They have less than 6% of their total assets in what the FCA would deem non-standard investments which is an everreducing number. By focusing on the standard market, Liberty has been able to modernise their sales and administration processes. Whilst Liberty SIPP accepted non-standard assets in 2013, they only accepted them after vetting by an investment committee and commissioning third parties to carry out due diligence on their behalf. Liberty never allowed clients to invest in the likes of Harlequin or any product which they deemed unsippable in line with HMRC rules. It isn t just non-standard investments that require due diligence. Liberty run extensive due diligence on any new investment manager, stockbroker or platform to ensure their clients assets are protected. Liberty has a team that constantly monitors clients portfolios with third parties to ensure that they are being invested responsibly and in line with their investment parameters. Liberty SIPP are one of the only SIPP providers to go into this level of detail however the FCA have made it very clear to the market that this is what they expect from all SIPP providers. By focusing on the standard market, Liberty has been able to modernise their sales and administration processes. Adviser Portal We aim to make Liberty s Financial Advisers lives as easy as possible by allowing them to have access to lots of features and online tools. Once an Agency agreement has been set up with Liberty, adviser portal log in details will be supplied to you. Financial Advisers will be able to process both growth and drawdown illustrations via the adviser portal. For drawdown illustrations you will be able to create capped drawdown, flexi access drawdown and phased drawdown quotes. The adviser portal offers a full paperless online application as well as a hybrid online application. The application can also be used for bulk transfers, using a CSV bulk uploader. Finally, you can keep tabs of your existing clients with a wide range of information available on the adviser portal. You can view investment details, SIPP bank account transactions, drawdown details and much more. Liberty SIPP are constantly working with their software providers in order to improve these services. You can keep tabs of your existing clients with a wide range of information available on the adviser portal. Adviser Charging Our Financial Advisers can take their fees in a number of ways. You get the usual options: single; monthly; quarterly; half-yearly; and annually. You can also take fees directly from an investment company, as long as the investment company has the functionality to pay fees in this way. 9

10 Anti Money Laundering (AML) Each client joining Liberty SIPP needs to pass sufficient checks to meet the standards agreed by the financial services industry as laid out by the Joint Money Laundering Steering Group (JMLSG). Liberty has incorporated the GB Group s URU identity software into their online application form. When an application is processed AML checks will be done automatically and these checks utilise a number of databases such as the electoral roll and share register. The checks also compare potential clients against the HM Treasury and OFAC sanction lists. There may be instances where further identity checks are required, in such instances the appointed administrators will contact the client or financial adviser to request further details to complete the application. All members of staff receive anti-money laundering training as part of their induction and there are regular updates to this within Liberty s training programme. All members of staff understand their responsibilities to report any suspicions to the company s MLRO who then investigates the matter and considers whether it should be passed on to NCA. Complaints Liberty takes any complaint raised very seriously. Liberty has developed a robust procedure for all complaints which are considered individually and passed to senior management. Each complaint is investigated in a fair and impartial manner and a response is sent to the complainant within the time frame specified by the FCA. Liberty track every expression of dissatisfaction and consider any route cause analysis at senior management meetings to consider process improvements and new ways of doing things. For a copy of Liberty s complaint procedure, please contact the customer services team. The Financial Services Compensation Scheme (FSCS) is a compensation scheme established by the Financial Services and Markets Act. This is funded by levies placed on financial services firms and provides compensation on the event of a failure of an FCA authorised firm. For more information on the FSCS please go to We hope you found this document useful. If you require any further information, please get in touch with us on or at customerservices@libertypensions.com 10

11 Liberty SIPP Limited Head office: The Exchange, Bank Street, Bury bl9 0dn Tel: Web: Directors: John Fox - Julie Dean - Ian Currie - Michael Taylor - Matthew Rankine - David Southworth Company Registration No: , authorised and regulated by the Financial Conduct Authority (Registration No: ). Published January 2018