Terms of Engagement

Global Financial Ltd is a Chartered firm of financial planners and an Appointed Representative of Best Practice IFA Group Limited, which is a network that promotes a high level of market standards through the provision of back-up resource, technology, training and support. Best Practice IFA Group Limited is authorised and regulated by the Financial Conduct Authority. The registration number is 223112 and a full list of Appointed Representatives can be found on the FCA register.

Introduction

This document is aimed at providing you with a brief overview of our firm and to introduce our services to you in more detail, from which you may then select the service and remuneration package that best suits your needs.  We will discuss this with you so that you fully understand what is offered and how it will benefit you.  Should you have any questions on any element of this please do not hesitate to ask us.

Advice Services

The firm is authorised to advise on and arrange Life Assurance, Pensions, Investments, and General Insurance and Mortgages. We are bound by the rules of the FCA.

We offer advice on an “Independent” basis. This means that we provide unbiased, unrestricted advice based on a comprehensive and fair analysis of the applicable market, giving due consideration to the full range of retail investment, pension and life products available in the marketplace which may be suitable for you.

Where available, we will record our telephone calls for training and quality purposes and these will be referred to as part of our advice records. All call recordings will be used to minimise ambiguity in our discussions or instructions received and are encrypted for security and integrity purposes.

  • Execution only (for one-off transactions instructed by you)
  • Limited Advice (approaching limited aspects of financial planning only)
  • Full Advice (Full Financial Review based on all aspects of financial planning)

Advice options

We offer a variety of advice options including:

Transacting business

By signing these terms of business, you are giving your adviser permission to accept paper, electronic and verbal instructions to transact business on your behalf. This will be especially relevant to switching investment funds. Verbal instructions will only be taken where the advising firm has call recording facilities. Any instruction received will be considered genuinely given and duly authorised.

Termination

You or we may terminate our authority to act on your behalf at any time without penalty. Notice of this termination must be given in writing. The termination will be without prejudice to the completion of transactions already initiated, if this is the case. Any transactions effected before termination are due a proportion of any charges for services accrued and shall be settled to the date of notification. Once signed, this agreement shall apply until such time as it is superseded, replaced or terminated.

Client Money

The firm does not handle client’s money. We never accept a cheque made out to us (unless it is a cheque in settlement of fees, charges or disbursements for which we have sent you an invoice, which would be made payable to Best Practice IFA Group Ltd) or handle cash.

Customer Classification

Each client with whom the firm does business is categorised to identify the level of regulatory protection applied. We believe in providing our clients with full regulatory protection and we propose to classify you as a ‘Retail Client’ for investment purposes. Where you have been classified as anything other than Retail, this may affect the level of protection available to yourself from the Financial Ombudsman Service, though these restrictions will be highlighted to you at the time of classification.

Investment Objectives and Restrictions

Following the issue of this document, any subsequent advice or recommendation offered to you will be based on your stated objectives, acceptable level of risk and any restrictions you wish to place on the type of investments, policies or companies you are willing to consider. Details of your stated restrictions and objectives will be included in the Suitability Report we will issue to you to confirm our recommendation. Unless confirmed in our initial discussion, to the contrary, we will assume that you do not wish to place any restrictions on the advice we give you.

Data Protection

You may be assured that we and any company associated with us will treat all personal data and sensitive personal data as confidential and will not process it other than for a legitimate purposes. Steps will be taken to ensure that the information is accurate, kept up to date and not kept for longer than is necessary. Measures will also be taken to safeguard against unauthorised or unlawful processing and accidental loss or destruction or damage to the data. The information you have provided is subject to the Data Protection Act 1998 (the “Act”). By signing this document you consent to us or any company associated with us processing your personal data, both manually and by electronic means, for the purposes of providing advice, administration and management.

If at any time you wish us or any company associated with us to cease processing your personal data or sensitive personal data, or contacting you for marketing purposes, please contact The Data Protection Officer on (01403 334455) or in writing at Sussex House, North Street, Horsham, West Sussex, RH12 1RQ. Subject to certain exceptions, you are entitled to have access to your personal and sensitive personal data held by us. You may be charged a fee (subject to the statutory maximum) for supplying you with such data

Material Interest

Occasions can arise where we, or one of our customers, will have some form of interest in business that we are transacting for you.  If this happens, or we become aware that our interests or those of one of our other customers conflict with your interests, we will inform you in writing and obtain your consent before we carry out your instructions and detail the steps we will take to ensure fair treatment. We have arrangements in place to ensure our clients are treated fairly, and we have a conflict of interest policy in place to help us manage the risks. You may ask for a copy of this policy at any time.

Rights to Cancel

We will inform you of your statutory right to cancel and the timeframes applicable in which to cancel, for life or pension contracts this is usually 30 days. However, there will be occasions where no statutory rights are granted, although this will be explained before any contract is concluded.

Complaints

Our complaints procedures are available on request. If you wish to register a complaint, please contact us in writing to The Compliance Director, Best Practice IFA Group Limited, Sussex House, North Street, Horsham, West Sussex. RH12 1RQ. Alternatively, you can telephone 01403 334455. If you cannot settle your complaint with us, you may be entitled to refer it to the Financial Ombudsman Service.

Compensation Scheme

We are covered by the Financial Services Compensation scheme (FSCS) if we cannot meet our obligations. This is dependent upon the type of business and the circumstances of the claim. Most types of investment, pension business and mortgages are covered by 100% of the first £50,000, with deposit accounts benefiting from protection of £75,000 and insurance covered up to 90% of the claim with no upper limit. Further information about this compensation scheme arrangement is available from the FSCS.

Law

These Terms of Business are governed and shall be construed in accordance with English Law and the parties shall submit to the exclusive jurisdiction of the English Courts.

Our Services

It is important that you know what to expect in terms of the services we provide, and that you understand our commitment to you in the provision of those services. We intend to be professional, clear, and fair in our dealings with you, and will always ensure that any service or advice provided is in your best interests.

Initial Consultation

We will meet with you face-to-face, via a Web meeting or telephone conference in order to capture important information about your current circumstances, your financial history, and your aspirations, priorities and objectives in terms of your financial future. We will also discuss your attitude towards “investment risk”, and your understanding of how such risk may affect you.

The consultation will close with a summary of our findings, and our suggested next steps toward a tailored, yet realistic, solution to your needs. There is no obligation to proceed at this stage, and no costs will have been incurred.

Research and Analysis

Should you decide to proceed, further to our initial meeting, we will ask you to formalise your permission for us to commence chargeable work for you by signing this Agreement. At this stage, we will begin to undertake the process of thoroughly analysing your current position based on our extensive knowledge of financial markets, and diligently researching potential solutions for your needs.

Should we need to consult with any professional advisers or financial services providers with whom you have an agreement, we will ask for your express consent to do so.

Report Preparation

When we have all the information we require, a full Financial Planning Report will be devised to paint a clear picture of your current position, and outline a clear and thoroughly researched recommendation for the solution we believe to be in your best interests. We will arrange to meet with you to discuss our recommendations in full, and take you through our Report step-by-step. You are free to take the report away and give it due consideration before agreeing to move forward to the next stage.

Implementation

Once you feel that you are in a position to make a fully informed decision to proceed, and you have given us your consent to do so, we will begin the process of implementing our recommendations. We will assist you in completing all of the relevant forms and ensuring your applications are processed by the relevant investment houses and providers in a timely manner.

Ongoing Management Services

Depending on the size and complexity of your portfolio once in place, you may or may not require ongoing management services. These services are optional, and once implemented, can be cancelled should our ongoing management services no longer be required. It is important to be aware that, in the absence of a specific agreement to provide you with ongoing services, your portfolio will not be monitored unless you contact us to ask for a specific service.

Discretionary Management Facility

Where possible, we will offer you the opportunity to run your investments on a discretionary basis, this means that your portfolio will run in real time as there is no need to advise you every time an underlying change needs to be made.  The obvious benefit of this approach is that trading can be done easily and efficiently and dealing charges will, in most cases be reduced.

Where you would like to apply for this service you will need to sign a discretionary agreement and we will inform you if there are any additional fees to pay.

A ‘Comprehensive Plan’

Where a full advice option has been agreed, we aim to provide all our clients with full and comprehensive advice rather than limiting it to one product. This means that we will consider how all your plans and investments overlap and interact with one another in order to formulate the most efficient strategy for your needs. This can be concisely summarised be the phrase “the whole is more than the sum of its parts”.

In order to construct an all-encompassing financial plan for our clients, we will consider Mortgages, Income Protection, Protection, Pensions, Savings, Investment, Taxation and Trusts with a full advice proposition.

How we charge

You will always know our fees before you make a decision to proceed. We don’t hide our costs and we have a transparent charging structure, so you can be sure we are working efficiently for your benefit.

Our fees are based wholly upon the provision of our qualified and professional expertise, the time taken to analyse your circumstances and devise an appropriate strategy going forward, the design of an appropriate summary report to communicate this strategy to you, and also takes into account our firm’s exposure to regulatory, commercial and financial risk.

Should we undertake initial research towards your goals, but you subsequently do not proceed with our recommendations, we will raise an invoice for an agreed fee in order to recoup our costs. This payment will need to be made by cheque or bank transfer.

Should you agree to proceed and we go ahead with the implementation of your strategy, it can be arranged for your total fees to be deducted from the investment amount at outset, via the product provider if the recommended provider will facilitate this. Alternatively, you may prefer to make your payment to us by cheque or bank transfer.

Lifestyle Financial Planning Fee

A lifestyle financial plan is typically £1,895.

£595 is payable upon engagement and the balance payable on completion of your plan. As a guarantee, should you feel that the completed plan, does not add value as agreed at the outset, we will not charge for the balancing payment.

Cost of initial services

Cost of initial services

Scale of initial fees

Scale of initial fees

Charges for Regular Premium Contracts

Charges for regular premium contracts

Invoice Procedure

Invoices are issued within 10 days of either an advice service being finalised and/or presented, or in the case of Implementation fees, within 10 days of your product/s being commenced.

What is not included in our fees?

Will Writing, advice on trusts outside of a product and complex tax calculations/advice. In addition we will pass on any third party expense such as Capital Gains Tax (CGT) reporting or third party discretionary management fees which we may be invoiced on your behalf. If we do need to charge you for any of these services a fee will be agreed with you in advance. Neither our firm nor our employees are qualified to render legal or accounting advice or to prepare any legal or accounting documents. It is hereby understood and agreed that the onus is on you, the client, to refer to a solicitor or accountant any point of law or accountancy that may arise during the course of discussions with us.

Refunds and Cancellation Policy

Fees are payable subsequent to our Professional Advice Services being provided, and therefore refunds are not available in normal circumstances. Fees paid in respect of regular or annual services are not refundable. However, any ongoing services may be cancelled upon request. Please also see “Rights to Cancel” above, in respect of cancelling individual products or policies.

Should a refund be required due to any element of dissatisfaction on your part, this should be approached via our normal Complaints procedure as outlined above. We will try to resolve the issue to your satisfaction, which may include offering a discretionary refund.

Cost of Ongoing Management Service charge

Whether you have a sizable and complex portfolio of products, or one or two modest investments, it is important to consider how these should be managed going forward.

We can provide an ongoing management service designed to expertly maintain and monitor your portfolio. The benefit of this is to ensure that your objectives and attitude to risk are correctly aligned with your holdings over an extended period of time. In addition, ongoing advice services ensure that developing and future financial objectives are taken into account. Furthermore, aspects of your financial arrangements can change over time, including your goals and risk profile as well as the underlying asset’s risk characteristics. Ongoing management service can help adapt and position your arrangements to manage such changes and influencing factors.

The availability of some services is dependent upon the type of financial plan we implement for you. Our typical fee is shown below;

Service Charge: 1% per annum, based upon the prevailing value of your portfolio. Examples as follows;

service charge example

Please note that with funds under management, as the funds grow and the value of your investment increases, so will the charge applicable.

Using a Wrap Platform or Custodian

With the advance in technology it is possible to notionally combine products and hold them together on a Wrap Platform. A Wrap Platform is merely a benign structure for holding your pension and investment plans in one place and it is not a plan in its own right.

Holding your investments in this way will give you greater functionality and much wider choice of funds, structured products, direct equities and gilts. One of the main attractions is the ability to negotiate discounts on the purchase of funds which can be passed back to your account to improve growth or buy funds at an institutional rate. A simple example of this is a share dealing account where a nominee will hold the shares on your behalf rather than holding all the paper certificates yourself.

A platform is not suitable in all cases especially if your existing contracts have penalties or a tax charge would apply on surrender. It is possible for us to manage your assets either ‘On Platform’ or ‘Off Platform’ for the same charge but services will differ as per the service descriptions overleaf.

Group Pension Arrangements

There will be an initial fee of £900 to research and supply a report with options and recommendations. Thereafter the fees are individually agreed based around the amount of input require, complexity ad size of the work force.

What is Included in our Ongoing Management

Our services include

Opting Out

You may decide to “opt-out” of any ongoing management service. Fees will continue to be applied up to the day that we receive your written or verbal confirmation that our ongoing service is no longer required. From this point on we will no longer provide the services detailed under the “Ongoing Management Service” section of this agreement. You are free to do so, however, please take note of the following;

  • If your financial circumstances, objectives and attitude to risk change over time, the structure of your investment portfolio may no longer be in your best interests
  • As financial markets fluctuate, the way your assets are allocated in your portfolio may become unbalanced and ultimately expose you to more equity risk than you wish to accept
  • Any negotiated discounts in respect of fund charges may cease should you opt out of ongoing services. The monetary value varies widely, but typically equates to 0.5-1.0% per annum
  • If you use a Wrap Platform the provider may apply a charge if you do not have a nominated adviser on your account. Typically this is 0.5% per annum
  • We must be notified either verbally or in writing of your request to opt out of the ongoing management service

You may opt back in to ongoing management services at any time.

Tax Efficient Fee Collection

As part of the overall financial planning process we will also take into account how best to charge for our service. In almost all cases this is best taken from contracts which either obtain tax relief on creation or are taxed on exit because this effectively saves you this percentage in tax. For example, if our fee to manage your pension investments was £1,000 which was taken via the pension itself the net cost to you may be as low as £600*.

Exceptions to the above are ISAs which do not receive tax relief but grow tax free (subject to the 10% tax credit) and are tax free on exit, therefore, it would be prudent to pay the annual management charge outside of the wrapper from a cash account. This would have the added advantage of reducing the growth on the cash account which effectively saves paying savings tax of up to 40% on the amount of the fee.

 By using the above you can save a large amount on the payment of overall fees by engineering the payment from tax efficient sources. The net effect of this approach can reduce fees by up to 40%.

Value added Tax

As we act on your behalf as an intermediary our fees are presently exempt from VAT which means we do not usually have to make an additional charge of 20%. If we do have to charge you for a service which is subject to VAT we will inform you in advance.

Potential savings on VAT and Tax

If we combine the fact that we act as your intermediary and collect fees direct from a contract rather than ask you to write out a cheque for a service then the full savings becomes more apparent in the table below.

potenital savings

*This example assumes that you are a 40% tax payer and have the ability to pay £1,000 into your pension rather than pay a cheque. This is our interpretation of current tax law which is always subject to change and therefore there is no future guarantee that we can retain tax efficiency of future fee payment.