Insured self directed pensions. Jim Connolly

Transcription

1 Insured self directed pensions Jim Connolly

2 Just saying. ARFs Personal Pensions Occupational Pensions BOBs PRSAs

3 Used to look like this Funds

4 And now look like this. Funds BANK DEPOSITS PROPERTY SHARES ETFs

5 Spot the Difference. Who provides it? How do they deliver it? How well does it work? How secure is it?

6 WHO PROVIDES IT?

7 Insured self directed Funds providers BANK DEPOSITS Standard Life Zurich Canada Life Irish Life Friends First New Ireland BANK DEPOSITS BANK DEPOSITS Funds SHARES ETFs Funds SHARES ETFs PROPERTY

8 Similarly Acumen & Trust Pension Trustees Limited AIB Wealth Pensioneer Trustee Ltd (Corporate) Allied Insurance Consultants Ltd Allied Irish Banks Allied Pension Trustees Anglo Irish Bank AON Professional

9 Similarly Axiom Private Clients Ltd (Not operate as PT's) BDO PWM Pension Trustee Ltd Bespoke Trustees Ltd C/O Towers Watson (formerly Buck Heismann) Canada Life Capital Trustees Ltd

10 Similarly City Life Pensions Ltd Corcoran Financial Services Corporate Life Davis Tax Consultants Ltd Davy Pensioneer Trustees Deloitte & Touche Ernst & Young

11 Similarly European Pensioneer Trustee Ltd Finance Life Financial Development & Marketing Financial Engineering Trustees Ltd Frank Glennon (Life & Pensions) Freedom Trust Services Limited Goodbody Pensioneer Trustees Ltd Harvest Trustees Limited

12 Similarly HC Pensioneer Trustees Ltd Heissmann Consultants Hewitt & Becketts ( Trustees ) Ltd Hewitt & Becketts ( Trustees ) Ltd. Humbert Trustees Limited I L P Financial Trustees Ltd IFG Self-Administered Pensions, IFS Trustees Services Ltd

13 Similarly Independent Trustee Co Ltd. Inverdea Financial Services Invesco Trustees Jardine Pension Trustees Kershaw Andrew Consulting Ltd Kindlon Insurances KPMG MacCourt Trustees

14 Similarly Marine House Trustees Ltd Mercer Ltd Meritas Financial Advisors Ltd Moneywise Financial Planning Ltd Mount Street Trustees Ltd Mount Street Trustees Ltd Munster Pensioneer Trustees Ltd Newcourt Pensioneer Trustees

15 Similarly O Mahony Actuarial & Pensions Legal Services Limited O Mahony Insurances (Individual Capacity) Opes Wealth Trust Oregan Pensioneer Trustee Ltd Pension Investment & Property

16 Similarly Pension Systems Limited Pinnacle Pensioneer Trustees Ltd Planlife Trustees Services Platinum Pensioneer Trustees (Corporate) PricewaterhouseCoopers Private Client Trustees Private Company Pensioneer Trustees Quest Capital Trustees Ltd (Corporate)

17 Similarly S.I.P.F. Ltd Saffrose Associates Ltd (retiring) Signature Trustees Services Ltd Simon Shirley Advisors Ltd The PSGi Trust Company Ltd TierOne Prudential Ltd Trustee Decisions Ltd

18 Similarly Watson Wyatt Partners Wealth Options Trustees Ltd Willis Ltd Wise Pension Trustees Ltd

19 HOW THEY DELIVER IT.

20 How they deliver it Legal Admin Investment

21 Administration Revenue Policing Record Keeping Paying Benefits Documents Very deep administration pockets Auto-approval Keeping up with Revenue changes Holding Assets & Switching Investment

22 How they deliver it Legal What are you allowed to do? Admin Investment

23 Investment Own funds / limited platform of funds Must use insurers Stockbroker BUT Investment Must use the Insurers panel of 3 rd party providers Must use the Insurers panel of Banks

24 HOW WELL DOES IT WORK

25 Setting up a scheme and investing a contribution in shares Fill out form Select investment option Begin trading 1 Week

26 Setting up a scheme and investing a contribution in shares Wait for Revenue Approval And wait for PT to co-sign all trades Sign trust deed Complete bank mandate Appoint Investment Manager Begin trading 6-8 Weeks More bureaucracy mandates, money transmissions, AML requirements

27 Holding Assets What does the client own? A policy What is a policy? It s a debt that the insurer owes If the policy holds shares, where are they? On the insurers balance sheet

28 Switching investments 200,000

29 Switching investments 200,000

30 HOW SECURE IS IT

31 What happens if an insurer goes bust? Class VII Class I Class VI INSURANCE COMPANY Class II Class V Class IV Class III

32 Statutory Protection Insurance Company Pensioneer Trustee Qualifying Fund Manager Standard Life Personal Pension NONE N/A N/A 90% Executive Pension / SSAS NONE NONE N/A 90% Buy Out Bond NONE N/A N/A 90% ARF NONE N/A 20,000 Maximum 90%

33 Regulation Banks QFMS Insurance Companies MIFID Pensioneer Trustees Exempt Approved Unit Trusts

34 So in conclusion... Self administered and self directed are the same thing The products don t differ but the delivery of them differs hugely Advice is critical

35 WHY MINE IS BETTER THAN YOURS! PART II

36 Arguments for self directed All SSASs

37 Arguments for Self Directed Controversial Superior Factual Cynical Technical Financial Practical Politically incorrect Distribution Concluding

38 Controversial arguments No such thing as a compliant SSAS Pensioneer Trustee must be a cosignatory on all financial transactions Lodgements? Share dealing instructions? Investment switches?

39 Controversial arguments Not all SSASs are the same Over 80 registered Pensioneer Trustees That s 80 different risk appetites That s 80 different knowledge levels That s 80 different fee structures That s 80 different SSAS types

40 Controversial arguments SSASs don t do everything they say on the tin!

41 Superior arguments Providers are internationally recognised brands We re highly regulated We re well capitalised with deep pockets Our product is a Retirement Benefits Product We ve sophisticated admin platforms We love advisors

42 Factual arguments Average SSAS - 330,000 (Source APTI)

43 Factual arguments How is loss likely to occur? Default of the provider Maladministration Misappropriation Negligence Errors Fraud

44 Cynical arguments Anecdotal evidence that some self administered providers aren t exactly independent Why use a Unit Trust to acquire investments?

45 Technical arguments Non-insured ARF structures are not recognised as Pensions for UK tax purposes Voidable transfers to self administered BOBs Insured BOBs, ARFs and PRSAs provide statutory disclosure no requirement for self administered alternatives QROPS approved SSASs contaminates the entire fund with UK reporting obligations

46 Financial arguments Self Directed 0% Entry 0% Exit 0.5% AMC Self Administered 0% Entry 0% Exit 0.25% AMC

47 Financial arguments Self Directed Self Administered

48 Practical arguments Dealing with the bureaucracy involved in setting up a scheme Getting a valuation

49 Distribution arguments Loss of control Limited income Adequate technical support Loss of other support (eg Quotes)

50 Concluding arguments Courtesy of APTI You get substantial tax benefits No requirement to make regular contributions Ability to control investments Allows significantly greater contribution than Personal Pensions Ability to transfer business profits to a personal trust is a key factor

51 Questions..

52 Financial Arguments

53 Politically incorrect arguments Providers only facilitating investments from their own shelf Pensioneer Trustees not being in control of assets Pensioneer Trustees having conflicts of interest Forcing round investments into square holes Pensioneer Trustees investing the assets of the SSAS in insured funds Pensioneer Trustees using Unit Trusts unnecessarily