Investments are a huge part of what we do here at PSG SIPP. Just like organising a transfer from a Receiving Scheme, it can sometimes require a lot of back and forth between us, the client’s Adviser and the investment provider. We asked our investment expert, Meg O’Beirne to discuss what’s involved in establishing investments on behalf of our clients and what types of challenges can occur.
What are the biggest challenges when trying to organise investments on behalf of a client?
We can often come up against problems before we have even sent the application to the investment company.
We must balance our requirements with those of different investment providers. Naturally, this means we need to allow for different requirements within our investment application and this can occasionally lead to key information being missed off submitted applications and some general confusion from the client or their Adviser on which parts of the application they need to complete.
Once we’ve received everything we need from the client and Adviser and sent this to the investment company, they will either accept this information or respond with any further requirements that need to be supplied. PSGS has no influence over these requirements, and this stage can involve a lot of back and forth. If the investment company require more forms to be completed, PSGS may require the client to sign these forms before countersigning and once again having to balance our requirements with those of the investment company.
Inevitably this can all lead to delays with sending funds for investment. A policy number has to be provided by the investment company to PSGS in order to do this and they will not provide one until they are completely satisfied that they have got all the information they’ve asked for. This isn’t something that PSGS can control, although we will follow up regularly.
Would you say these challenges have become more significant in recent times and if so, what does that look like?
The impact of the global pandemic has brought many challenges that until now weren’t even considered to be problems. For example, different investment providers have had varying approaches to electronic signatures. Some have accepted them, others have not. But in many recent cases it has taken a considerable amount of time for this decision to be reached, prolonging the time it takes for the investment application to be reviewed and accepted. As a SIPP provider, this isn’t something we can control, and we have had to be flexible in how we work. We have our own requirements regarding electronic signatures, and we must ensure these are met before we can proceed with processing investment applications.
What is a typical deadline expected by a client or their Adviser?
I think Financial Advisers expect applications to be completed and sent to the investment company within a few days. This is often the case, provided our banking partner can open the bank account in a reasonable timeframe. However, if we have to go back to the Adviser to provide missing information e.g such as a missing client signature in the declaration section of the application, then it will be relogged for processing until that requirement is met and the clock will start again. Once the app has been sent to the investment provider, it is then up to them to review the application and come back with any further requirements.
What is a typical deadline delivered by a ceding provider?
Different providers work in different ways. Some provide the policy number in their first email, allowing us to invest funds as soon as we are able, whereas others do not open the account until their final requirements have been satisfied. In these cases, the longer it takes for the requirements to be met, the longer it takes for us to be able to send the funds for investment.
We will always try to answer any queries raised by the investment company as soon as we can, and will do so as comprehensively as possible, only leaving queries for the Adviser where we are unable to answer them ourselves. However, it is important to note that we must always take into account our own requirements, and if we are referring queries to the Adviser, it is not because we are being difficult or trying to delay the investment, but because we need certain documents and information that only they can provide themselves.
In your considerable experience, what would you say are the most common mistakes that lead to unnecessary delays?
A missing client signatures from the application form, or an electronically signed form that is not accompanied by a DocuSign certificate. Whilst the investment company may only need the application to be signed by PSG as the Trustees, it is PSGS’s requirement that the client sign the application in the first instance, to reflect their agreement to the T&Cs of the bond. It is important that our requirements are considered to be as important as those of the investment company, because the back and forth that can follow causes delay to the bond being set up ready to receive funds.
We also sometimes see dealing instructions from the Adviser with missing or incorrect signatures and no DocuSign certificates (if signed electronically). Issues with incorrect signatures often come about when we receive dealing instructions which have been signed by a different Adviser to the one we hold on file for the client, and we will therefore need to go back to query whether there has been a change of Adviser. If so, this will need to be processed too. If signed electronically we need the DocuSign to process.
It is important to note that a lot of advisers do provide completed investment applications and forms of good quality, allowing us to do our job more efficiently. Where we don’t have to go back to the advisers, we can process these cases more promptly and get them across to the investment company for processing more quickly.