Our FidUcia Service

It is important that you know what to expect in terms of the services we provide and that you understand our commitment to you in the provision of those services. We intend to be professional, clear and fair in our dealings with you, and will always ensure that any service or advice provided is in your best interests. This service is subject to a minimum investment of £750,000

Fiducia Service is a trading style of KRD Financial Advisers Ltd, 74 Worcester Road, Hagley, Stourbridge, West Midlands, DY9 0NJ which is authorised and regulated by the Financial Conduct Authority (FCA).  Our Financial Services Registered number is 456629. Further information about KRD can be found on our website www.krdfa.com

Initial Consultation

We will meet with you face-to-face to capture important information about your current circumstances, your financial history, your aspirations, priorities and objectives in terms of your financial future. We will also discuss your attitude toward “investment risk” and your understanding of how such risks may affect you. The consultation will close with a summary of our findings and our suggested next steps toward a tailored, yet realistic, solution to your needs. There is no obligation to proceed at this stage and no costs will have been incurred.

Research and Analysis

Should you decide to proceed, further to our initial meeting, we will ask you to formalise your permission for us to commence chargeable work for you by signing this Agreement. At this stage, we will begin to undertake the process of thoroughly analysing your current position based on our extensive knowledge of financial markets whilst diligently researching potential solutions for your needs. Should we need to consult with any professional advisers or financial services providers with whom you have an agreement, we will ask for your express consent to do so.

Report Preparation

When we have all the information we require, a full Financial Planning Report will be devised to paint a clear picture of your current position and outline a clear and thoroughly researched recommendation for the solution we believe to be in your best interests. We will arrange to meet with you to discuss our recommendations in full and take you through our report step by-step.

You are free to take the report away and give it due consideration before agreeing to move forward to the next stage.

Implementation

Once you feel that you can make a fully informed decision to proceed and you have given us your consent to do so, we will begin the process of implementing our recommendations.

We will assist you in completing all the relevant forms and ensuring your applications are processed by the relevant investment houses and providers in a timely manner.

On-going Services

It is important to be aware that the Fiducia Service is only available with an ongoing service agreement in place. Fiducia is built around the ongoing service that will provide ongoing management of your portfolio and products as well as keeping you updated with changes in the market that may have implications for you and your business or family.

Client Categorisation

Unless you receive confirmation in writing to the contrary, in all our dealings on investment matters you will be treated as a Retail Client. This means that you are afforded the highest level of protection under the regulatory system and should have the right to take any complaint to the Financial Ombudsman Service (FOS).

Where we have categorised you other than as a ‘retail client’ you may request re-categorisation under a client category which benefits from a higher degree of protection.  However, we reserve the right to agree to such a re-categorisation on a case-by-case basis, and where we agree to do so it does not necessarily mean that you will have a right of access to the Financial Ombudsman Service.

Further information in respect of the Financial Ombudsman Service is available on their website at the address:- http://www.financial-ombudsman.org.uk/

How we charge

You will always know our fees before you decide to proceed. We don’t hide our costs and have a transparent charging structure, so you can be sure we are working efficiently for your benefit. Our fees are based wholly upon the provision of our qualified and professional expertise; the time taken to analyse your circumstances and devise an appropriate strategy going forward; the design of an appropriate summary report to communicate this strategy to you and considers our firm’s exposure to regulatory, commercial and financial risk.

Should we undertake research and analysis work on your behalf, but you decide not to take up our recommendations, we reserve the right to charge you a fee to cover our time. This will typically be represented by a rate of £150 per hour, with a minimum fee of £750. We will estimate the total cost for you in advance of commencing work if you wish. You may ask us not to exceed a specified amount. This payment will need to be made by cheque or bank transfer.

Should you agree to proceed and we go ahead with the implementation of your strategy, it can be arranged for your total fees to be deducted from the investment amount at outset, via the product provider. Alternatively, you may prefer to make your payment to us by cheque or bank transfer.

Your choice can be made in the Client Declaration section of this document.

Cost of Initial Services

Initial Consultation (1st meeting) – Free of charge

Our Fee for research, analysis and implementing advice is £5,000 for initial investments up to £2m.

(If you decide not to take our Ongoing Management Service, then a 1.50% initial fee of the amount invested will be payable, subject to a minimum fee of £10,000 and a maximum of £25,000. If this path is taken you will not become a client of the Fiducia service and will be treated as a transactional client only).

Over £2m there is no initial charge subject to you taking out our Ongoing Adviser Service.

(If you decide not to take our Ongoing Management Service, then a 1.50% initial fee of the amount invested will be payable, subject to a minimum fee of £15,000 and a maximum of £25,000. If this path is taken you will not become a client of the Fiducia service and will be treated as a transactional client only).

Invoices (if applicable) are issued within 10 days of either an advice service being finalised and/or presented, or in the case of implementation fees, within 10 days of your product/s being commenced.

Standard fees for on-going management services is 0.50% of portfolio value, payable quarterly.

Our fees are unique in the market place, we charge what we consider a very competitive standard rate of 0.50%, then we have a scale of fees that link to risk levels and our RPI (Retail Price Index) benchmark, this is where we are different.

We use Distribution Technologies market leading risk rating software to determine your attitude to investment risk. Once this is agreed we also discuss your capacity for loss. Once determined this decides the benchmark we will apply to your investment return, as shown in the table below.

We then apply our scale of fees linked to the benchmark as measured over a 1 year period as published by the Office for National Statistics.

If we get a return above the benchmark but below the benchmark plus 50%, then the standard 0.50% fee applies.

If we get a return over benchmark plus 50% but below benchmark plus 100%, then a fee of 0.60% applies to the funds.

If we get a return more than 100% of the benchmark, then a fee of 0.75% will be applied.

But here is where we are different, should we not reach the benchmark then we will reduce our fees.

The reduction is linked to the size of the fund value at the annual review date, and is reduced as per the table below

Fees are charged at 0.50% throughout the year and the fee is adjusted at the next quarterly payment date due in the new portfolio year. A portfolio year is determined as the first investment anniversary date. Subsequent investments can be made at any time must wait to be included in the Fiducia service charging structure at the portfolio anniversary date. The standard 0.50% will apply over this period.

Only investments into growth investments will be included in Fiducia. Any income taken will be added at the end of the portfolio year to make the calculation for fees. Any funds that income is being taken from can be at the choice of the investor be removed from Fiducia fee calculations and our standard fee of 0.50% will apply.

The choice of selecting which products will be subject to the Fiducia fee scale can be changed at the portfolio annual review date.

For the Fiducia service to apply clients must agree to let the advisor make the changes he/she feels are in the best interests of the client in meeting the selected benchmarks.

Advisers will only be able to switch funds or proportions of funds within the agreed risk scales and any movement out of a risk scale with only be allowed with the consent of the client and an appropriate written agreement to change signed by the client.

This will protect the client from any risk of the adviser attempting to gain a higher return to meet a higher benchmark to gain from a higher fee and for the adviser to be protected should the client try to fail a benchmark to induce lower fees.

Fiducia Service Bullet Points

• A minimum of two structured business meeting per annum
• Quarterly portfolio valuations
• Tax and estate planning
• Risk profiling
• Cash flow modelling
• Multi adviser meeting (two heads better than one)
• Pooled ideas from adviser team on advice offered
• Performance fees that can go down
• Access to other professionals if required
• Direct access to an adviser

Clients Risk

You are advised that because investments can fall as well as rise, you may not get back the full amount invested.  Past performance is not a guide to future performance.

Our Fees do not include; Will writing, Trusts advice or complex tax calculations. Advice for these services will be a separate fee agreed with you in advance.

Fees paid in respect of regular or annual services are not refundable; however, any on-going services may be cancelled upon request. Please also see your Rights to Cancel above, in respect of cancelling individual products or policies. Should a refund be required due to any element of dissatisfaction on your part, this should be approached via our normal Complaints procedure as outlined above.

We will try to resolve the issue to your satisfaction, which may include offering a discretionary refund.

Cost of On-going Management Services whether you have a sizable and complex portfolio of products, or one or two modest investments, it is important to consider how these should be managed going forward. We can provide an on-going service designed to expertly maintain and monitor your portfolio. The benefit of this is to ensure that your objectives and attitude to risk are correctly aligned with your holdings over an extended period of time.

In addition, on-going advice services ensure that developing and future financial objectives are considered. Furthermore, aspects of your financial arrangements can change over time, including your goals and risk profile as well as the underlying asset’s risk characteristics.

On-going service can help adapt and position your arrangements to manage such changes and influencing factors.

This document represents our standard Terms of Engagement, upon which we intend to rely. For your own benefit and protection, you should read these terms carefully before signing below. If you do not understand any point please ask for further information.

Best Execution Policy

It is in the interests of our clients and KRD Financial Advisers Ltd that we obtain the best possible result when placing orders with other firms (e.g. third party brokers) for the execution of client orders or when transmitting orders on behalf of clients for particular investments (e.g. shares).  We are required under the Rules of the Financial Services Authority to take all reasonable steps to provide ‘best execution’ when carrying out such transactions.

Where we place or transmit orders for such investments on behalf of our clients, we may utilise the services of a third-party broker and base our decision to place or transmit an order on the price and cost of execution of the order.  For orders in collective investment schemes (e.g. unit trust) however, the price of units or shares in the scheme is normally set by the scheme operator or manager and as such, we have little influence over the price available.

Full details of our best execution arrangements are provided in our Best Execution Policy, a copy of which can be provided on request.

Mode of Communication

We will enter communication with you through whatever means are convenient to you and us, including face-to-face, telephone, e-mail and other acceptable electronic communication methods.

Conflicts of Interest

KRD Financial Advisers Limited offers advice in accordance with that described in this document.  Occasions may arise where we or one of our other clients have some form of interest in business being transacted for you.  If this happens or we become aware that our interests or those of one of our other clients conflicts with your interests, we will write to you and obtain your consent before we carry out your instructions, and detail the steps we will take to ensure fair treatment.

KRD Financial Advisers Ltd do not handle clients’ money.  We never accept a cheque made payable to us, or handle cash (unless it is payment in settlement of adviser charges or disbursements for which we have sent you an invoice).  If you do send us money, this may delay your transaction, as we may have to return this money to you.