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Foreword With all best wishes for your success. Phil Wickenden GAAR is, on balance, good news for planners in that it encourages consumers to eschew “aggressive” avoidance plans and concentrate on the “tried and tested”. Nevertheless, IHT and estate planning is an under-exploited area. Advisers won't get involved in anything that isn't tried and tested, steering clear of overly complex and aggressive schemes… “if it seems too good to be true... it probably is”. Advisers are, in general, concerned to stay the right side of the “tax planning line” and as a result will, in the main, stick to fairly vanilla schemes. There's a clear dividing line between precedent based action and opinion based action - what you know vs. what you think – with advisers staying firmly in the former camp. As people become more aware of GAAR they want and expect greater certainty from advisers. The more innovative a scheme the more justification is required and the heavier the emphasis on due diligence. Advisers will increasingly not go anywhere near the “cliff edge”. Boring is the new exciting, but significant opportunities exist for providers and platforms that are able to engage and equip advisers with the level of expertise that is clearly missing presently. ??? With all best wishes for your success. Phil Wickenden Managing Director So Here’s The Plan limited Tony Wickenden Jt .Managing Director Technical Connection limited e: tkw@tecconn.demon.co.uk m: 07802584743 e: phil@soherestheplan.com m: 07966092075

Objectives We have spoken to 100 of the types of advisers that you want to partner with, to gain an intimate understanding of what is required to build better propositions, support and communication that reflect the current regulatory landscape and opportunities emerging from it: Understand the relative size of the tax planning market and identify the key concerns advisers and their clients have on taxation related issues. Identify what activity advisers are currently undertaking around tax planning and explore perceptions on products and strategies currently available. Unearth advisers’ practical understanding of GAAR and explore opportunities, challenges and impact on the range of solutions that result from this. Understand how advisers perceive providers and platforms in terms of the support they provide on the issue of GAAR and tax planning generally, outlining clearly where and how greater value can be added. 3 3

Methodology Nationally representative sample of firms in terms of number of RI’s, geography and AUM 100 advisers were randomly sampled from a robust panel of 800 Technical Connection adviser clients and over 17,000 advisers from So Here’s The Plan’s growing database. The sample comprised advisers who were: All interviews were conducted by telephone, lasting 25-30 minutes on average. Interviews were conducted during Q3 2013. Participating advisers were offered access to online client facing material from Technical Connection in return for their participation. Individual anonymity agreed. 4 4

Respondent Profile Q. Approximately, what are your Assets under Management? Q. How many Registered Individuals are there within the business? % of advisers Closely mirroring the profile of advisory businesses in the UK, the majority of the businesses sampled (46%) had £0- £20m in AUM while nearly four in five (77%) had between one and three RI’s. Over a quarter of the sample (26%) have AUM over £50m 19% of the sample have £100m+ in AUM. 10% of firms interviewed had 20+ RI’s. 5 5

Contents Market Sizing & Client Concerns Adviser Activity Products and Strategies GAAR: Opportunities & Challenges GAAR: Impact on Business Models, Operations & Solutions Provider and Platform Support Proportion of adviser client bases comprising: HRTs & ARTs. Proportion of clients able to invest more than £40k a year – current vs. aspirational. Client concerns: income tax / IHT / CHT. Advisers’ expected changes to tax rates and impact on planning. Page 7 Importance of tax mitigation in planning currently and expected change. Implementation of tax planning solutions- the planning process The role of and value attached to provider-led tax planning ideas Tax planning ideas and business opportunities – where the opportunities lie. Page 16 The role and effectiveness of products in the current tax environment The importance of brand / reputation Product / provider selection: what influences advisers decision making process Funding for Retirement other than through Registered Pension Arrangements Page 27 The impact of GAAR on advisers’ planning process Client appetite for tax mitigation in light of GAAR Impact of GAAR on tax planning business opportunities What’s putting a brake on business? What is required to leverage opportunities & how can provider help? Page 35 Advisers’ GAAR policies & understanding of measures. Impact of regulation on business operations. Influence of GAAR on product selection. Innovation needs. Partnering with third parties. Page 47 Providers delivering on GAAR support Providers most associated with tax planning support Perceived value in tax related technical support – what advisers want Appetite for paid for support The ideal technical support model Page 59

Section 1. Market Sizing and Client Concerns This section explores: Size of additional / higher rate tax payer market Current and aspirational client bases Extent of client concern in relation to tax Adviser expected changes in tax levels Market Sizing and Client Concerns

Section 1: Market Sizing and Client Concerns Market Sizing & Client Concerns Adviser Activity Products and Strategies GAAR: Opportunities & Challenges GAAR: Impact on Business Models, Operations & Solutions Provider and Platform Support Approximately a third of all advisers client base is comprised of higher rate taxpayers. Additional rate taxpayers represent just under 7% of total client bases. Though we note that the higher an advisers total assets under management the higher the proportion of higher and additional rate taxpayers. 40% of firms with over £50m AUM’s clients are HRTs 9% of these businesses’ clients are ARTs. Income tax and Inheritance tax are considered the biggest concern (it being most keenly felt) tax concerns, with CGT relegated to third, though advisers failed to rate any of these three areas more than 7/10 in terms of importance. Those businesses with a higher percentage of clients falling into HRT and ART brackets did not express any greater concern about tax related issues. CGT, income tax and IHT are all expected, on balance, to increase over the coming three years. Page 7 2. Page 16 3. Page 26 4. Page 34 5. A significant gap (52% pts.) exists between advisers’ current and aspirational client bases with advisers keen to move up the food chain. Page 45 6. Page 56

Higher and Additional Rate Tax Payers Q. What proportion of your clients do you believe are higher rate tax payers? (MEAN AVERAGE) Q. What proportion of your clients do you believe are additional rate tax payers? (MEAN AVERAGE) Overall Mean: 32.78% Overall Mean: 6.72% Q. What proportion of your clients do you believe are higher rate tax payers? Q. What proportion of your clients do you believe are additional rate tax payers? At an overall level advisers estimate that 32.78% of their clients were higher rate tax payers – with this increasing with AUM. Despite this, there remains a fifth of the smallest advisers (in terms of AUM) with more than half of their client base being higher rate tax payers. However, only 6.72% of all advisers’ clients are estimated as being additional rate tax payers – again with this increasing with AUM. Across all assets under management classes, the vast majority of advisers estimate that only 1-24% of clients are additional rate tax payers.

This rose to nearly half (48.9%) among advisers with a £50m+ turnover. At an overall level two fifths of advisers’ clients (39.5%) were estimated to be higher rate or additional rate tax payers. This rose to nearly half (48.9%) among advisers with a £50m+ turnover.