The changing face of growth

Synaptic anticipated the increasing burden that regulation, including MiFID II and Consumer Duty would put on firms. As the focus for Synaptic research is suitability, Synaptic users are now also well placed to address the new FCA initiative – ‘The thematic review retirement income advice (2023)', confirming that pension advice is not only the focus of firms' activities but also their requirement for the best possible research and due diligence. Furthermore, the FCA states that it will be using the thematic review to 'explore the effectiveness of the Consumer Duty Rules'.

Data published on the FCA website in October 2022 (below) shows the trends that are increasing requirements for advice and due diligence in the key area of pensions:

› Total number of pension plans accessed for the first time in 2021/22 increased by 18% to 705,666 compared to 2020/21 (596,080).
› All products saw an increase in 2021/22. Number of Uncrystallised funds pension lump sums (UFPLS) saw the biggest increase of 28% from 28,305 in 2020/21 to 36,274 in 2021/22.
› Drawdowns also saw an increase of 24% from 165,988 in 2020/21 to 205,641 in 2021/22.
› Sales of annuities rose in 2021/22 by 13% (60,383 in 2020/21 to 68,514 in 2021/22).
› The overall value of money being withdrawn from pension pots rose to £45,638m in 2021/22 from £37,432m in 2020/21. An increase of 22%.
› 40% of regular withdrawals were withdrawn at an annual rate of over 8% of the pot value (43% in 2020/21).
› 33.4% of plans accessed for the first time in 2021/22 were accessed by plan holders who took regulated advice (up from 32.7% in 2020/21).

Synaptic recognises the importance of this work to advisers and their clients and have partnered with Salesforce™ and Moody’s to create the industry’s most effective research and due diligence suite, with an ability to produce a quick and comprehensive illustration to support any investment recommendation. This enables practitioners to evidence suitability in the most transparent manner possible.

There is more information inside this guide as to the Synaptic assets and processes that make this level of research and due diligence possible. Synaptic has built an advanced ‘in house’ development capability but is first and foremost a research house. The research capabilities that have been deployed in Synaptic Pathways include: proprietary data around products and portfolios; detailed charging information; risk profiling of clients and investments thanks to a unique application of the Moody’s stochastic forecasting capability - all delivered in a single joined up proposition built on the Salesforce technology and CRM platform.

Synaptic can be tailored for firms of all sizes, but also comes with new ‘Network’ capability, allowing vertically integrated organisations to work efficiently, including the application of governance frameworks (products, portfolios, fund lists and charging) and the distribution of investment solutions (PROD). All types of advised portfolios are available for research, including DFM MPS’s, insured portfolios, model, bespoke and In House DFMs.

The full capabilities of Synaptic are deployed in the review process, the area where the majority of firms tell us they are expending resources to ensure consistent and reliable quality. Synaptic can remove hours of administrative work and is now also supported by a dedicated paraplanner feature, that allows firms to share their client and holdings data with their paraplanners to complete work on their behalf.

The next page shows the breakdown of the review process, including how the data is treated in order to create a virtuous circle, whereby once there is a record in the system, it can easily be revisited, updated and research reports pulled off to support recommendations made in the review.

It is possible for firms using Synaptic to not only transform the quality of their research but to reduce the time taken from hours to minutes.