What can we do when reviewing a client’s existing plans, where the funds the client holds cannot be found using research systems? Sian Davies-Cole, director of outsourced paraplanning firm Plan Works, considers the options.
Reviewing a client’s arrangements such as pensions and investments that they have in place before seeing the financial planner is a key part of the paraplanner role.
But sometimes we hit a brick wall with this analysis.
We have very expensive, comprehensive tools available to us but sometimes in certain situations the fund or funds held within the plan cannot be found using these tools.
This is quite common with older plans or workplace pension schemes. Sometimes you will see that the provider has referenced this when they respond to the LOA request – “this fund cannot be found using research systems”.
So what do we do?
We have to look at what information we have got and what else we might be able to get but also why we need it.
We are always trying to find out the fundamental things about the portfolio – the asset allocation and the historic performance.
If there is one fund within the plan and the provider has given us a factsheet – hey presto – we can use that. We do find that FE Analytics and the other research tools we use to be more accurate, so I would always use those over a provider factsheet if it is possible.
If the fund or funds are not available on FE Analytics, you could try searching TrustNet or a quick internet search – but remember one of the fundamental rules of reviewing an existing plan – do not make assumptions. If you do find the answers through an internet search, just take care as I often see this bit go wrong.
Where you have more than one fund and only factsheets to use for analysis, you might have to put together your own tool which will work out the proportion of the portfolio in equities, fixed interest etc. The same for performance – if you have this per fund, you could turn the performance for each fund into a proportion of the portfolio to apply it overall.
I am totally aware how back of an envelope this is, but in the absence of being able to analyse the portfolio properly this seems the only way.
You could of course just look at each of the individual funds, but this will not tell you the overall view of the portfolio, which is key.
[Mian image: john-schnobrich-FlPc9_VocJ4-unsplash]
