PROFESSIONAL INDEMNITY INSURANCE INDEPENDENT FINANCIAL ADVISERS PROPOSAL FORM

Transcription

1 PROFESSIONAL INDEMNITY INSURANCE INDEPENDENT FINANCIAL ADVISERS PROPOSAL FORM GUIDANCE NOTES This proposal must be completed in ink (or electronically) by a Principal, Partner or Director of the Proposer. Please use your Company headed paper or the continuation sheet at the end of this proposal to provide full answers where appropriate. The completion and signature of this form does not bind either the Proposer or the Insurer to complete a contract of insurance. DUTY OF DISCLOSURE It is your responsibility to disclose to insurers all material information when obtaining or renewing cover. Information is deemed material if it would influence the judgement of a prudent insurer in deciding whether or not to accept the risk or establishing the terms upon which they are prepared to write the risk. If you are in any doubt as to whether or not an item of information is material, you should disclose it. You have an ongoing duty to disclosed all material information throughout the term of the policy. If any material information is omitted or misrepresented, Insurers may have the right to void the policy and return the premium, and no claims will be paid. Professional Indemnity Insurance policies are written on a claims made basis and no days of grace are applicable. Therefore, in the unfortunate event of you being made aware of a claim or circumstance which may give rise to a claim, after the expiry date, you will be responsible for settling any claims notified during the period for which cover is not in force. Please retain a copy of this completed proposal form for your records

2 1. General Information a) Please confirm the name of your main practice, and the full names of any other entities currentlytrading. Please also confirm any other trading names/styles for which cover is required. (excludingappointed Representatives). Practice Name Date Commenced Trading b) Please state below the full Main Office Address and contact details: Address Postcode Tel No. Fax No. Contact Name Contact Address Website Please provide on a separate sheet any other addresses from which the above entities practice c) If more than one office exists, please confirm if there is a senior Principal, Partner or Director at each office? YES NO If NO please provide a CV of the person overseeing each office. d) Past Business Entities including predecessors in business for which Run-off cover is required: Business Period of Trading

3 e) Please confirm that none of the above Entities is a Limited Company thathas been wound up and/or has no assets. YES NO f) Does the business have any past or current Appointed Representatives/Tied Agentsthat require cover? YES NO If YES please provide full details in the table below or continue on a separate sheet A R Company Name Date of Appointment Date of Termination g) Please provide details of the methods of control used to monitor and supervise the activities of yourappointed Representatives/Tied Agents 2. Please provide the following details of all current Principal/Partner/Directors (including Locums): Name Position Qualifications Date Qualified Current Age Number of Years with Firm FOR ANY UNDER FIVE YEARS EXPERIENCE IN THIS OCCUPATION PLEASE SUPPLY A CV 3. Number of permanent staff other than Principal/Partner/Directors: Registered Individuals (inc Self-employed Advisers Unregistered Mortgage or Protection Advisers Paraplanners and Other Technical Staff Administration and Secretarial Staff Total

4 4. Is cover required for any Principal for past liability prior to joining the Firms above? YES NO If YES please provide full details below: Name of Principal Name of Previous Firm(s) Period To Be Covered 5. Is the proposing entity Directly Authorised with the FSA? YES NO APPLYING If YES please confirm your FSA Registration Number: If not Directly authorised, how are you authorised to practice? 6. Please list below any other Professional/Regulatory Bodies, Trade Associations or Societies to which thefirm belongs: 7. Has any of the proposing entities, or anyone with the Firm, ever been the subject ofdisciplinary proceedings by any regulatory or professional body? YES NO If YES please provide full details on a separate sheet 8. Has any of the proposing entities received, or is on notice of, a visit from theregulator other than for routine compliance monitoring purposes? YES NO If YES please confirm the date(s) of the visit and enclose a full copy of thereport. 9. Have all electronic submissions of the Retail Mediation Activities Return (RMAR)been completed on time? YES NO If NO please confirm why there have been late submissions and advise what, if any, sanctions were imposed? 10. How is your Compliance managed? Solely In-House? YES NO In House, but with the assistance of a specialist firm? YES NO By a specialist firm? YES NO If your compliance is managed In House, please provide details of the compliance officer and the experience in this field: If your compliance is managed In House but with assistance, or by a specialist firm - a) How frequently does the specialist firm visit your office(s)? b) What proportion of files are checked by the specialist firm? c) Is the specialist firm involved in dealing with complaints? d) How long has the specialist firm been appointed?

5 11. Do you operate as a Locum for any other firm? YES NO 12. Have you appointed a Locum to act on behalf of your firm? YES NO If YES to either of the above please provide details of the arrangement 13. Do you provide reviews to all active clients as least annually? YES NO If NO please confirm details of your client review system 14. Do you ever complete proposal forms for clients? YES NO If YES do you ensure that the client signs the form afterconfirming the accuracyof its content? YES NO 15. Approximately, what is the average number of active clients per adviser? 16. Have you fully considered whether or not your current systems fully comply withthe FSA s Treating Customers Fairly Initiative (TCF)? YES NO 17. Have you had any type of TCF audit from the FSA? YES NO If YESplease supply a copy of any subsequent correspondence 18. As part of your normal conduct of business and file keeping, do your files demonstrate compliance anddocument the following (the list below is not exhaustive): a) Suitability (e.g. the choice of investment suited the customer circumstances, complemented their other investments, fact finds have been signed, all risk warnings explained to client at point of sale and in writing, explain why the product has been selected, the level of investment, customer affordability; YES NO b) Know your client - (eg. personal and financial circumstances, dependants, objectives and attitude to risk); YES NO c) Product disclosure - (eg. independent due diligence and understanding product demonstrated to client); YES NO d) Disclosure of commissions/remuneration; YES NO e) Risk warning (eg. written explanation of risks iro return of capital, the investment cannot be guaranteed to mature to the full expected value, the investment involves investment risk, and other forms of investment could meet the client's needs); YES NO 19. Please confirm the date of your Last Completed Financial Year End?

6 20. Can you please confirm your total gross brokerage/commission/fee income including trail/renewal commission achieved for the Last completed financial year and Previous three financial years (where applicable) in respect of all proposing entities/appointed Representatives/Tied Agents and derived from all employees. Last Completed Financial Year Previous Year Previous Year Previous year 21. Please confirm the estimated total gross brokerage/commission/fee Income for all entities to be earned in the current Financial Year? 22. Approximately, what percentage of your income is made up of Renewal/Trail or fund based commission? 23. Approximately, what proportion of the gross income is fees as opposed to commission? 24. Is any income derived from clients outside the UK? YES NO If YES please provide details of clients, territories and services below:

7 25. Can you please confirm the % of gross commission/brokerage/fees received in the Last completed financial year as disclosed in question 19(a) derived from the following categories: Product Type %age of Income Pensions Pension Fund Trustees / Managers Investments - ISAs & PEPs Investments - Unit Trusts & Insurance / Income Bonds Investments - Venture Capital Trusts (VCT) Investments - Enterprise Investment Schemes (EIS Investments - Film Finance/Film Partnerships Investments - Enterprise Zone Trusts (EZT) Investments - Hedge Funds Investments - Split Capital Investment Trusts / Zero Dividend Preference Funds Investments - Precipice Bonds / Structured Capital at Risk Product Sales Other Structured Products Endowments Traded Endowments (TEPs) Traded Life Policies Viatical Settlements Private Client Portfolio Management - Non Discretionary Private Client Portfolio Management - Discretionary Mortgages Equity Release Schemes / Lifetime Mortgages / Home Reversion Plans Protection Policies - PPI / MPPI / ASU Health Insurance - PHI / CII / PMI Other Life Building Society Agency Accountancy / Taxation Estate Agency Risk Management / Management Consultancy General Insurance - Personal Lines General Insurance - Commercial Dealing in Listed, Unlisted UK or Foreign Securities Dealing in Bonds (eg Eurodollar), or Commodities Investment in Tangibles (eg. Coins, Gems etc) Mergers and Acquisitions/Corporate Finance Employee Benefit Advice to The Employer or to Employees on a Group Basis Other (Please Specify) TOTAL 100% 26. Do you perform any Unregulated Business? YES NO If YES please provide details below:

8 27. Are any of your recommendations for investments anything other than collective investment schemes? YES NO If YES please provide details below: Name of Investor Date of Investment Value of Client s Investment Portfolio Product Original Investment Value Current Value Date of Valuation 28. Have the business activities changed substantially during the past ten years? YES NO If YES please state provide full details below: 29. Please indicate the number of single premium or annual investments (excluding Pensions) made in the Last completed financial year where the sum invested was (Please do not include monthly investments): Range less than 10,000 equal to or more than 10,000 but less than 25,000 equal to or more than 25,000 but less than 100,000 equal to or more than 100,000 but less than 250,000 equal to or more than 250,000 Number of Investments 30. Please provide details of the top 3 products providers in terms of commission income in the last 12 months. Provider % of Total Commission

9 31. Please provide details of the top 3 products providers in terms of number of new policies in the last 12 months. Provider Total Number of New Policies 32. During the last 3 years have you issued any direct offer financial promotions to clients promoting a particular product or products? YES NO If YES please complete the table below or continue on a separate sheet. Product Provider and Product Promoted Date Number of clients mailed Number of applications received 33. Did you transact any case that earned over 10k in fees or commission? YES NO If YES please provide full details below:

10 34. Has any services or advice been provided with regard to any investment or deposits with or in securities issued by any Financial Institution that is insolvent or is unlikely to be able to meet its obligations. YES NO If YES please provide full details in the table below or continue on a separate sheet: Has any advice or services been provided with regard to any investment that has had new investment and/or redemptions suspended, had the assets re-valued or is insolvent. YES NO If YES please provide full details in the table below or continue on a separate sheet: Name of Investor Date of Investment Value of Client s Investment Portfolio Product Original Investment Value Current Value Date of Valuation 35. In terms of total number of individual investments arranged and total amount of client funds invested please provide details of the top 3 investment funds. Investment Fund Number of Investments Arranged Investment Fund Total Client Funds Invested

11 36. Pension Advice and Administration a) Please provide a breakdown of your Pension Advice income in the table below. Personal Pensions Type of Work Proportion of Income in Last Financial Year Pension transfers/switches from money purchase schemes Pension transfers/switches from defined benefit schemes SIPP Administration SIPP Advice Pension Fund withdrawals, income drawdowns and phased retirements Annuities Pension Fund Administration Pension Fund Trusteeship Pension Fund Management QROPS Other (please provide details) Total b) Please provide the number of Pension Transfers from Defined Benefit Occupation Pension Schemesthat you have arranged in the last 10 years and provide the average and largest transfer value. Number of Transfers Average Transfer Value Largest Transfer Value c) Please provide a breakdown of Pension Switches undertaken since 6 th April 2006 Type of Receiving Scheme Personal Pension Plan SIPP Year Commencing April 06 April 07 April 08 April 09 April 10 Total d) Please advise the average transfer value during this period e) Please advise the three largest transfers conducted f) What proportion of work was conducted on an Execution Only basis? g) What was the average commission rate received on transfers?

12 h) What proportion of transfers were conducted where full commission was taken? i) Has any pension switch been undertaken which: i. The receiving scheme was more expensive than the ceding scheme? ii. The client lost benefits (eg guaranteed annuity rates without good reason? If Yes to either please provide details below j) Please provide the names and details of the experience and qualifications of the individuals authorised by the proposer to provide Pension Transfer advice. Names Qualifications Experience k) Have you reviewed a sample of individual files of Pension Switching advice against the four areas of suitability identified by the FSA? Yes No If YES how many files were in the sample? Did any Fail the suitability criteria and if so please state what proportion and in which areas? Yes No

13 37. Income Drawdown including Pension Fund Withdrawal plans, Income Drawdowns and Phased Retirement Plans a) Please provide the following details in respect of all income drawdowns undertaken by the firm Year Number of Annuities Arranged Number of Cases Transacted Number of Income Drawdown Cases No. of cases where original fund value < 100,000 Current Fund Value of Largest Case transacted b) In what proportion of these cases did the client take maximum drawdown? c) In what proportion of cases did you take maximum commission with no fee offset? d) How often are reviews of each case conducted following drawdown? e) Please provide a brief analysis of your strategy for Income drawdown products particularly where the fund value is below 100, In respect of Mortgages please confirm the proportion of income derived from the following areas. Residential Mortgages % Sub-Prime Mortgages % Self-Certification Mortgages % Buy-To-Let Mortgages % Commercial Mortgages % Equity Release/Home Reversion/Lifetime Mortgages/Sale and Rent Back % 39. Is any individual authorised to sign cheques as a sole signatory on behalf of either the business or clients accounts? YES NO If YES Please provide details and specifying Limit

14 40. a) How often are entries in cash books reconciled with bank statements by a partner, director, or company secretary (other than the head cashier and/or chief bookkeeper? Weekly Monthly Quarterly b) Is there a complete annual audit by a firm of professional accountants? YES NO c) Is the firm authorised to hold/receive client money? YES NO If YES Are clients funds kept in properly designated client s accounts separate from the accounts of the business? YES NO d) Are satisfactory written references always obtained when engaging all new partners, directors, employees or self-employed persons? YES NO If NO Please provide details on why references are not obtained: 41. a) Does the business currently have Professional Indemnity Insurance? YES NO If YES please provide details of your current Professional Indemnity Insurance below: Insurer/Broker Limit of Indemnity Excess Premium Renewal Date b) Please confirm the retroactive date applied to your current Professional Indemnity Insurance policy. 42. In respect of Professional Indemnity Insurance, has any Insurer ever declined to offer Insurance, imposed any special terms or cancelled / voided an insurance policy of any of the proposing entities, or any Partner, Principal or Director? YES NO If YES please provide full details below: 43. Do you anticipate any major changes in the Firm s Activities during the next Twelve months? YES NO If YES please provide full details below:

15 44. Claims History a) Please confirm whether there have been any claims or circumstances made against any of the proposing entities? YES NO If YES please provide full details below or continue on a separate sheet Date of Claim Brief Details Amount of Claims Paid ( ) Reserves Outstanding ( ) b) If applicable, what action has been taken to prevent a recurrence of a claim? N/A 45. a) Has any of the proposing entities sustained any loss during the last ten years as a result of the fraud or dishonesty of any Principal, Partner, Director or employee of the business? YES NO If YES please provide full details below or on a separate sheet:

16 46. After enquiry, are any of the proposing entities Principals, Partners, Directors, awareof any claim pending or any circumstance which might give rise to a claim against the businessor any of the present or previous Principals, Partners, Directors of the business which have not yet been notified to current or past insurers? YES NO If YES please provide full details on a separate sheet: 47. Have present insurers been notified of all claims including requests for a pension review and all circumstances, which may give rise to claims? YES NO If NO please provide full details on a separate sheet: Important Reminder: All claims/complaints and circumstance (i.e. potential claims) must be immediately reported to your existing insurer prior to expiry of your current policy DECLARATION THIS PAGE MUST BE SIGNED AND DATED IN ORDER TO VALIDATE YOUR PROPOSAL FORM I/We declare on behalf of the Proposing Entities that the above statements and details are true and that I/we have not misstated or suppressed any material facts. I/We agree that this Proposal, together with any other information supplied by me/us, shall form the basis of any Contract of Insurance effected thereon. I/We undertake to inform Insurers of any material alteration to these facts occurring before completion of the Contract of Insurance. Signing this Proposal Form does not bind the Proposing Entities or Insurers to complete this Insurance. Signature of Principal/ Partner/Director: Name of Signatory: Position: Date: Please retain a copy of this completed Proposal Form for your records