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private clients our approach a guide to the suitability assessment 3

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the foster denovo group the foster denovo group is home to some of the most creative and progressive financial businesses in the uk we pride ourselves on innovation which is why we believe our key brands are rapidly becoming bywords in their sectors for excellence and service.

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the foster denovo group has continued to flourish throughout the financial turmoil of recent years we have built on our capital base and continued to invest both in our people and our technology we believe this is because we are a business founded on strong corporate values with a vital and engaging stakeholder culture built on equity participation across the firm we work with highly motivated and forward thinking individuals both on the private client and corporate sides of our business we believe they share our values and our aspirations and we strive to bring their needs to the heart of our business which is why the relationships we build are so strong our investment management firm sequel investments has we believe gone further than any other firm in the retail investment space to build a process around the needs of the client we partnered with some of the world s leading investment houses to run our clients money on a day-to-day basis and made them more accountable than ever before we have made their decisions more transparent and given them a clear brief in terms of volatility and performance based on our knowledge of our clients medium to long-term goals we are delighted with the quality of investment managers that have come together under the sequel proposition however should they fail to perform as agreed and as our clients expect we have retained the right to replace them because moving the manager rather than the money is a more effective solution for our clients our employee benefits team including our specialist brand secondsight has been blazing a trail through the corporate benefits industry for some years and has a trophy cabinet bulging with awards to show for it our clients include some of the best respected and most recognisable businesses in the world secondsight is founded on an absolute commitment to client service our mission is to surprise and delight not only our clients but also their employees because we want to add value right through an organisation to help firms maximise their investment in people and often become employers of choice in highly competitive recruitment markets pensions and investment uk scheme 2010 winner best strategy for investment advice on pensions corporate advisor awards 2009 highly commended employee benefits awards 2011 winner the cipd people management awards 2011 winner employee benefits awards 2009 winner most effective pension strategy 03

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how can we help you foster denovo private clients is a specialist group dedicated to helping wealthy individuals entrepreneurs and their families make sound financial decisions what we work with our clients to help them identify their financial objectives and build strategies to achieve them how we build close working relationships with our clients so we really understand them we also take an holistic view of all their financial arrangements and create a single strategy designed to achieve their financial goals short on time take 15 seconds to find out what we do and why we do it who we help a range of clients from entrepreneurs to families and individuals with a variety of priorities from growing their capital to protecting their family s assets or passing them on to the next generation why because the financial world is complex and our clients time is precious they need expert help to make the best decisions for their future 04

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covered in this document 06 09 18 07 14 19 08 16 05

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our values foster denovo was founded on a belief in the value of long-term relationships built on trust so we expect the highest client service standards from our partners and staff as a result we believe our clients get the best of both worlds they not only build a relationship with an individual they trust but also with a business committed to maintaining consistently outstanding performance core principles our drive to bring clients to the heart of the advisory process is based on four key principles 1 relationships we value good client relationships because the better we know our clients the better we are able to help them develop a strategy to achieve their financial ambitions an ongoing relationship takes commitment from both sides and requires the ability to listen empathise and adapt it also means straight talking from time to time and facing uncomfortable truths together which is why we place such a heavy emphasis on the value of trust 2 trust our commitment to building a business based on trust is closely aligned with our belief in the value of lasting relationships we believe that relationships are built on trust and that constructive long-term working partnerships cannot function without it 3 service we view our business as a partnership because we share the same values first among which is the commitment to outstanding client service our unerring ambition to bring clients nearer to the heart of our business drives everything we do 4 partnership our partnership symbolises our shared values and approach we also believe it makes our business stronger and helps us provide a better service our partners not only work together to provide complete financial planning solutions to our clients they also share best practice and new discoveries we believe it helps to keep us fresh and constantly focused on the client experience we provide 06

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what we do we work with our clients to help them identify their financial objectives and build strategies to achieve them we have a specialist team dedicated to our private clients and focused on providing an outstanding client experience our private clients come to us for any number of reasons some have recently become wealthy perhaps through inheritance in other cases we may have managed their family s assets for a number of years we see a lot of company directors who have built and run successful firms but we also work with clients who have retired or are approaching retirement whatever the circumstances we help to ensure that our clients have clear goals and are equipped to make the best decisions for their finances we believe the strategies we propose should be easy to understand even if some of the products that underpin them are complex so we take care to communicate clearly and simply and provide advice that is suitable to an individual s level of experience and understanding we strive to reach a joint understanding when dealing with key areas of financial decision making so our advice empowers our clients to make the right choices we will look at their investment portfolio and make sure that it is properly diversified for example we will also consider their entire financial situation to help ensure the required protection is in place and that their affairs are structured as effectively as possible that could include any private medical insurance business protection general insurance or more esoteric investment products such as venture capital trusts vct or enterprise investment schemes eis having put a structure in place we will continue our analysis on an ongoing basis and as key milestones are reached like the repayment of a mortgage a child s graduation or retirement we believe that ongoing advice financial coaching and reviews of financial objectives and strategy are essential to ensure that the arrangements in place continue to meet clients objectives we jointly agree regular reviews to determine whether the strategy is still relevant or whether we need to incorporate any changes to circumstances or priorities we will also review performance at those meetings and make sure clients leave with a clear understanding of their current position and any decisions or actions required while financial products can be complicated what most clients want to achieve is relatively simple the majority of our clients want to either grow their capital and increase their net worth protect their family s assets from inflation pass wealth on to the next generation enjoy the capital they have accumulated plan for key life events such as a child s education make sure that their finances are as tax efficient as possible 07

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how we do it we build close working relationships with our clients so we really understand them and we take an holistic view of all their financial arrangements to create a single strategy to achieve their financial goals we will arrange a first meeting at our cost to go through requirements outline our approach and demonstrate our capability the purpose of this meeting is to understand a client s current financial situation their objectives and the complexity of their affairs we will determine whether we are able to help them achieve their financial objectives and likewise clients need to decide whether they would like to work with us once we have committed to work together we will begin the process of reviewing their current finances and formulating a strategy clients will be supported by the relevant people in our team who are dedicated to their needs so they can rest assured their financial future is not just in the hands of one individual but a team of specialists discovery to help us identify the key features of a client s financial life understand their objectives and attitude to risk and define a successful outcome to our work together strategy to assess a client s current position relative to their objectives we will analyse their existing arrangements and conduct a gap analysis before creating a strategy and providing recommendations we have a four stage advice process designed to help us get to know our clients better identify their objectives recommend strategies and help them make great decisions about their finances implementation once the strategy is agreed we are able to implement solutions on our clients behalf review the case studies overleaf are real examples which demonstrate our approach and how we delivered against client objectives 08 the most important part of the process in many ways a wide array of internal and external forces could impact on a client s objectives or our strategy including the wider macro-economy legislative changes or changes to their circumstances regular communication is essential therefore to help ensure the strategy is still relevant and they are still on track.

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case study one objectives 1 to retire from work in two years time with a gross income of over £50k per year 2 to downsize their home and invest surplus funds 3 to provide financial assistance for their children to access the property ladder 4 to protect the capital that has been accumulated to date 5 to have a very flexible solution a middle aged couple working abroad they were very close to taking early retirement and could save substantial sums each month they had children of university age the key features of their financial lives were · large savings in various personal pensions · a final salary pension scheme · various bonds and unit trust investments · significant deposits in various cash accounts · substantial main residence · further buy-to-let investments strategy 1 we produced a detailed cash flow analysis that illustrated the value of assets and the income that could be yielded risk was discussed in detail so the most appropriate investment strategy could be selected this enabled realistic assumptions to be made about inflation and growth 2 we discussed in detail the various investment strategies that could be adopted and focused on the risk associated with each we talked about the different asset classes that could be bought and also the various wrappers in which these investments could be held 3 we requested up to date information on all the existing plans in place so we could determine how suitable these were in achieving the clients objectives proposal we moved a significant proportion of the cash savings into a range of structured deposits and low risk investments to ensure that their capital was not eroded by inflation and that they could commence a tax efficient income we amalgamated a number of pensions reducing the administrative burden and cost a highly valuable final salary pension was retained but we were able to contact the trustees to request a deferral of the income outcome for the first time the clients had a clear understanding of their financial position they were comforted by the knowledge that their financial objectives and desired level of regular income could be reached their administrative burden was reduced the case studies presented here are designed to provide information only and do not represent advice please contact a foster denovo partner to receive advice that reflects your personal needs and circumstances 09

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case study two objectives 1 to achieve pension income of circa £5,000 per month with the flexibility to increase if needed 2 consolidate investments to reduce paperwork 3 cautious attitude to risk a senior executive about to retire he had a large pension and significant savings and investments including isas and oeics strategy 1 we discussed the various retirement options that were available including annuities `3rd way products and income drawdown 2 we looked at the current investments and how they could be incorporated into the retirement strategy in a tax efficient and simplified way 3 we discussed in detail the various investment strategies that could be adopted and focused on the risk associated with each we talked about the different asset classes that could be bought and how we could apply a strategy across both the pensions and investments proposal we arranged for the client to receive `income of close to £50,000 over the next 12 months of which less than £8,000 was taxable thereby saving him nearly £6,500 per annum in tax we moved the existing isas and oeics and lowered the ongoing charges saving the client hundreds of pounds each year in costs we will then use the client s capital gains tax cgt allowances and tax-free withdrawals from the isas to boost his `income without incurring tax saving a further £2,500 annually outcome the client has the required income and the flexibility if it s needed the income received is very tax efficient so less has to be stripped from the pension and investments to generate the required net income the client can see the investment strategy being applied across his entire portfolio in one easy to access place the client is saving over £9,000 annually in tax and charges 10

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case study three objectives the client and her children were keen for someone independent of the family to review her assets and help her to · assess the level of income needed to maintain her lifestyle · receive advice on a suitable investment strategy to get better returns for cash held on deposit · analyse assets built up over a long period · help simplify her situation to reduce the amount of administration needed to manage her finances a recently widowed lady wanted advice on how to generate adequate income from her assets · significant amounts of cash were held on deposit rates of return · she had a large number of national savings accounts return and tax positions with very different rates of · more than 65 of her total accounts receiving very poor assets were achieving returns significantly less than current inflation levels strategy first we obtained authority to get the details on every account held and collated this information we also carried out work to · identify the tax position and rate of return being paid on each account · identify and where necessary renew any matured accounts · analyse her current accounts to understand what her spending habits were and how much income she would need on average to live the lifestyle she was used to · identify current pension income being paid into her bank account benefits · simplified financial position · reinvested to achieve better rates of income · withdraw income more tax efficiently saving £8,000 of income tax · reduce account fees saving £1,000£1,500 annually outcome the client now feels completely in control of her finances and is less reliant on her family she is confident knowing that we are here should she need our help and she has assets which should achieve returns ahead of inflation she also has the peace of mind that · she is in control of her financial planning · she has sufficient income for the rest of her life · her portfolio is more tax efficient the case studies presented here are designed to provide information only and do not represent advice please contact a foster denovo partner to receive advice that reflects your personal needs and circumstances 11

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case study four objectives 1 protection for the family in the event of death serious illness or long-term disability 2 create a tax efficient plan to build up assets to allow them to have a comfortable retirement 3 understand the various investment vehicles that are available so they feel they can make an informed choice on how they should build up their capital 4 create an easy to use cash flow model to assess income at retirement 5 simplicity was of huge importance they wanted to keep paperwork to a minimum 6 happy to take a moderate view towards investment risk a married couple with 2 children they own their own property and have income in excess of £200k per annum they have some savings and pensions in place but have no insurances strategy 1 we discussed the range of insurances that were available both personally and through their company including life and critical illness cover to protect the mortgage long-term disability cover to protect income and private medical cover 2 we produced a cash flow forecast so they could understand the potential fund values and incomes that could be achieved at retirement we reviewed the different tax wrappers that should be considered to minimise tax on income in retirement and thus minimise risk needed to be taken in the portfolio 3 the cash flow model was targeted at very specific retirement goals and identified an ideal level of investment needed to achieve them proposal insurances were put in place to provide · security that his income would be maintained and his family provided for if he became ill and was unable to work · savings of £12,000 income tax by making contributions outcome · the clients felt more comfortable that the family was properly protected · we have created a very simple and easy to monitor plan for the future · we agreed an ongoing process to review their progress · we did what was needed so clients recovered their confidence in the financial system 12

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case study five objectives · to achieve a high level of income in excess of £6,000 per month with the flexibility to increase this if desired · to focus on investment for income whilst generating some growth to minimise capital erosion · to take a cautious approach to investment risk · to mitigate inheritance tax liability and preserve wealth a retired client with assets of several million pounds including significant property pensions and various other investments strategy · review available options for drawing income from pensions · review investments to maximise tax efficiency and income options whilst looking to retain some growth potential · discuss investment strategy and acceptable levels of investment risk · discuss different asset classes and how these can be used to generate income proposal we set up regular withdrawals from the existing investments in such a way that we will make use of her annual cgt allowances tax-free withdrawals from the isas and income from the offshore bonds so that when added to the pension income we will generate the required total income without the client paying any higher-rate tax thereby saving over £17,000 annually in tax the investment strategy has been reviewed and only minor changes needed to be made as the majority of the target income will be generated from capital withdrawals as it is more tax efficient we are also arranging life cover in trust for the children to pay the inheritance tax iht that would be due on her death so that the family home and other assets can be passed down to the children this will mean that the children will not have to sell assets in order to pay the iht outcome the client has the required income and flexibility if it s needed and will save a significant amount of tax less has to be stripped from the pension and investments to generate the required net income thereby adding further protection to the portfolio the strategy is clear and easy for the client to understand the case studies presented here are designed to provide information only and do not represent advice please contact a foster denovo partner to receive advice that reflects your personal needs and circumstances 13

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meet the team andré jordache senior partner david stockdale senior partner dave wilkinson senior partner claire evans client experience manager we pride ourselves on the individual service we provide our clients which is delivered through our specialist private client team 14

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simon tamworth specialist researcher ­ retirement james ross specialist researcher ­ investments aoife brunt senior client experience executive lucy anderson client experience executive fleur mcguffie client experience executive roles and responsibilities of each individual are clearly defined ensuring that everyone is accountable and works to their strengths our clients have told us that they place the greatest value on face-to-face interaction with foster denovo partners our approach ensures that partners are able to spend more time with clients while the team focus on researching reviewing and implementing solutions the private client team is made up of some of the most experienced and well regarded partners at foster denovo claire evans our client experience manager oversees all activities relating to the design implementation and servicing of our clients financial plans our specialist researchers and client experience executives are responsible for the day-to-day administration and servicing of clients financial plans and keeping them updated on progress 15

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