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Consumer Duty Closed Book Review

As part of our responsibilities under Consumer Duty we have completed our closed book value assessment.

What does our closed book cover?

Our closed book covers our bundled charging structures on the Collective Retirement Account and Collective Investment Bond:

Charge Basis

Platform

Adviser

1

Bundled charging with Investor Charge

Fund based and Nominated Trail commission

2

Bundled charging with Investor Charge

Adviser Charging

What was the outcome of our value assessment?

Overall, the closed book provides value to customers. It provides a similar range of services, features, functionality and support to our open book (Charge Basis 3). Specific findings include:

  • The range of funds is appropriate, but we expect the choice of funds to continue to diminish as fund groups move away from bundled share classes.
  • The fixed investor charge can be high in % terms and we will be taking action to avoid potential harms in this area.
  • Charge Basis 1 has higher charges, linked with commission, but provides value where the customer can benefit from their adviser relationship.
Download our updated assessment of value document

Charge Basis 3, our open book, typically provides better value and we intend to move customers to this structure in time, subject to avoiding adverse tax outcomes. We are aiming to provide you with an update on our progress in this move in 2025.

What do advisers need to consider?

You now need to consider your distribution arrangements in light of our closed book review findings and the recent Dear CEO letter, which asks:

  • Have you applied your fair value framework consistently to open and closed products and services? You should justify any different approaches you have taken.
  • Have you assessed the expected total price to be paid by or become due from retail customers? Is this reasonable relative to the potential benefits provided by the product or service to retail customers?

Remember the FCA are clear that actions taken before Consumer Duty came into effect will be judged against rules that applied at the time but going forwards you should ensure that any remuneration received which impacts the charges paid by your clients continues to provide value.

Need a list of customers on Charge Bases 1 and 2?

Accessing which of your clients have investments on Charge Bases 1 and 2 is easy and can be done in a few simple steps in the platform:

  • Once logged in, click on the reporting button in the top right-hand corner.
  • Select the Adviser Fees and Charges report.
  • Column S will confirm the charge basis for each of your clients.

Updated assessment of value document

This guide provides further details to help you demonstrate the suitability of Quilter’s products to specific customer segments, and helps you assess the value you are providing your clients by recommending a Quilter product.

Making the cost of investment clear – Charge Basis 1

A summary of the charges on your client’s investments for Charge Basis 1.

Making the cost of investment clear – Charge Basis 2

A summary of the charges on your client’s investments for Charge Basis 2.

How do I

Amend existing commission or charges?

Notify you that you no longer advise a client?