National Protection Sales Manager Bernie Buron looks at whether advisers could be getting more out of administrators and paraplanners within the firm, whilst also highlighting what they generally can and cannot do.
I have had many enquiries from advisers asking exactly what an administrator/paraplanner can and can’t do within an adviser firm. This is an important question to ask, with many advisers rightly erring on the side of caution as to how best utilise administrators within such a tightly regulated sector. But with advisers so very busy at the moment, they are eager to ensure they are getting the most value out of their resource.
I already hear of success stories where the right set up with an administrator can be a godsend to advisers, especially during busy times. But it surprised me that some advisers do not even have an office administrator, and one or two are finding the workload becoming a big challenge.
So what can an administrator/paraplanner do?
Administrators, sometimes referred to as paraplanners, are utilised by a lot of advisers to free up more time to spend with clients. In some cases, opening up the admin role can even be a good way for them to become an adviser themselves through the firm, by learning more about the role the adviser does.
I have spoken to many advisers who have fully ensured their administrators/paraplanners are helping to free up time where possible, which gives the advisers in turn more time to spend with clients and deliver great advice. Here are just some of the ways that administrators have been helping out advisers with their protection, general insurance and mortgage business levels:
Freeing up time by chasing quotes | Handling general client queries | Preparing quotes ready for client discussion | General research on client cases | Calling the protection desk on behalf of the advisers | Underwriting and pre-underwriting | Retrieving and submitting Iress quotes | Chasing medical information from clients to receive the best terms
What can’t an administrator or paraplanner do?
What an administrator should not be doing as part of an adviser firm falls into two main categories:
Advising
Advising would include discussions of appropriate terms, rate type, best lenders, C&I vs IO, suitable amount of life cover, whether it is best to go pure life or relevant life etc. It is important to recognise when a role becomes advisory and ensure this is done by a qualified adviser. This includes certifying documents which must also be done by the adviser.
Fact Finding
Fact finding is slightly more difficult to define categorically, but collecting hard facts (name, DOB, address etc) is generally ok for administrators/paraplanners to do. However, retrieving softer facts strays away from what is allowed. This may include, but is not restricted to, asking a customer their view on interest rates or questioning how they intend to repay an Interest-only mortgage.
If you would like to know more about how to join our award-winning Mortgage Network as an appointed representative or becoming a member of our Mortgage Club, call our Broker Support Team on 0845 130 7446, option 1.
Stephanie Charman takes a look at the latest developments on the government’s Lifetime ISA: A new savings account to help young people save for a house, or retirement.
How does it work?
As of April 2017, anyone between the ages of 18 and 40 will be able to open a Lifetime ISA, or “LISA”. Any savings put into the account before the account holder’s 50th birthday will also receive an added 25% bonus. There is no maximum monthly contribution, they can save as little or as much as they like, up to £4,000 per year. The total amount someone can save each year into all ISAs will also be increased to £20,000 as of April 2017.
What can it be used for?
The savings and the bonus can be used to either pay towards a deposit for a first home worth up to £450,000, or to help fund retirement. As with the Help to Buy ISA, the accounts are limited to one per person, as opposed to one per home, which means a couple can save twice as quickly if buying together. This has made it a popular move for young couples hoping to plan for not just their first home, but their future as well.
What if they already have a Help to Buy ISA?
If they already have a Help to Buy ISA, the funds can be transferred over to the Lifetime ISA in 2017, or they can continue to save in both. But only one account will receive the bonus for a first home. So if they have both and intend to use the bonus on the Help to Buy ISA to go towards their deposit for a home, the Lifetime ISA must be used for retirement in order to receive the bonus on that account.
Can they also have a pension?
The treasury is keen to remind savers that the account is not a pension and therefore can exist and run alongside other long-term savings such as private pensions. Savers can still pay into a pension and get tax relief on their contributions.
Who will offer the Lifetime ISA?
The details surrounding who will offer the LISA is still being worked out. But as with the Help to Buy ISA, it will likely generally be offered by banks and building societies. The treasury says that the new LISA will be like other ISAs, in that the funds will contain a mixture of stocks, shares and cash. When the funds are eventually withdrawn, the returns will be free of tax.
When will they receive their LISA bonus?
If using the account for retirement, all the savings can be withdrawn tax free, including the 25% bonus, once they have reached their 60th birthday. It is possible to withdraw the funds before this time, but the governmental bonus will be lost, including any interest or growth gained. There will also be a 5% charge added if the funds are withdrawn before their 60th birthday.
If any or all of the savings are being used to go towards a residential property, the funds can be withdrawn at any time, as long as the account has been held for over 12 months, and will retain the full bonus. In this case, they will need to claim their bonus through their solicitor or conveyancer, which may be subject to additional fees.
If you would like to know more about how to join our award-winning Mortgage Network as an appointed representative or becoming a member of our Mortgage Club, call our Broker Support Team on 0845 130 7446, option 1.
Stephanie Charman takes a quick look at five of the most important tax and savings announcements to come out of George Osborne’s 2016 March budget.
The 2016 budget may have passed by without turning too many heads, but there were fact in some key changes worth noting:
Capital Gains Tax
The headline rate of Capital Gains Tax (CGT) is to be cut from 28% to 20%. CGT is an annual tax on the gain made from selling an asset (such as a person possession, second home or shares), which has gone up in value. It was also announced that the basic rate of CGT will be cut from the current 18% to 10% at the beginning of the new tax year. The reduction in CGT will not apply to residential property, which means the previous higher rates will still apply to gains from additional property.
Lifetime ISA
George Osborne announced the introduction of a new Lifetime ISA, to be launched in April 2017. This is to go alongside the Help to Buy ISA, which is available to help those saving for a deposit for a home. But the new Lifetime ISA, or “LISA”, can be used to save for retirement as well as a property, without paying tax on the interest earned. The new account is available to those aged 18 to 40 and offers a bonus of 25% on any savings, up to £4,000 a year, deposited before the account holder turns 50.
Tax Threshold Increase
One of the biggest announcements from the Chancellor was that the higher rate of tax threshold is to be raised to £45,000. This is a move surrounded by political controversy, especially in conjunction with the planned cuts in disability benefits. These changes are expected to save half a million people money, and are to be phased in to increase from £42,385 to £43,000 in 2016 and finally to £45,000 by this time next year.
Stamp Duty
As well as confirming the planned 3% stamp duty land tax (SDLT) surcharge on all purchases of additional homes, the government also withdrew the originally planned exemption for those with 15 properties or more. Osborne also announced that purchasers who move before they sell their main residence now have 36 months to sell and reclaim the extra stamp duty paid.
Personal Allowance
As well as the increase in the higher rate tax threshold, George Osborne announced that the Personal Allowance will increase to £11,500, from £10,600. This is the amount of money you must earn before you start paying income tax. The threshold will rise to £11,000 in 2016, eventually climbing to the new figure by April 2017.
If you would like to know more about how to join our award-winning Mortgage Network as an appointed representative or becoming a member of our Mortgage Club, call our Broker Support Team on 0845 130 7446, option 1.