Model Portfolio Services How to Guide for Advisers · model portfolio. Exchange traded instruments will not be subject to auto-disinvestment. We recommend that your client has enough

MODEL PORTFOLIO SERVICESHOW TO GUIDEFor Advisers

CONTENTS

3 | GET STARTED

11 | MODEL PORTFOLIOS

31 | MANAGE YOUR ACCOUNTS

43 | REPORTS

Embark platform | Model Portfolio Services How to Guide for Advisers

WELCOME TO EMBARK PLATFORM MODEL PORTFOLIO SERVICE

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When it comes to delivering your centralised investment proposition

(CIP), the Embark platform offers a wide range of options, to suit a

wide range of business models.

Advisers are increasingly choosing to outsource some or all elements

of their investment proposition.

There are many reasons, but a key one is to reduce the operational

overheads involved and so increase efficiency in your business.

Take running model portfolios as an example.

Outsourcing is an effective way to remove all the cost and

administration involved with:

• Running an investment committee;

• Meeting and managing fund manager relationships;

• Building, running and maintaining multiple models – including

rebalancing;

• Managing all the client communications back and forth;

• Creating and issuing documentation.

The Embark platform allows you to easily outsource and choose from

a full panel of discretionary investment managers through the

platform.

You’ll find the following types of investment on the Embark platform:

• Mutual Funds (OEICS, Unit Trusts, SICAVs/ICVCs);

• Equities;

• Crestable investments;

• Investment Trusts and REITs;

• Scheme Specific Investments;

• ETFs and ETCs;

• Cash on Deposit.

GET STARTED


CHOOSING YOUR DISCRETIONARY INVESTMENT MANAGER (DIM) PARTNER

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You can find a list of the full DIM panel on embarkplatform.co.uk, or

through your usual Embark platform Business Development Manager

contact.

You have access to the DIM insight supplied by the Embark Group’s

dedicated research companies at no charge to you. They are:

• theadvisercentre.co.uk

• DISCUS.org.uk

These businesses offer financial advisers access to research that

covers funds, multi-asset and multi- manager propositions and DIM

platform model portfolios.

It can help you with your due diligence to select the most suitable DIM

partner or partners for your business.

GET STARTED

https://www.theadvisercentre.co.uk/

http://discus.org.uk/


GETTING YOUR DIM AGREEMENTS IN PLACE

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Once you’ve made your DIM selection, you’ll need to agree terms and

access directly them. You do this off-platform.

There’s an agreement between you as ‘agent’ of your client and the

DIM. This gives you the authority to act on behalf of your client.

With most DIMs, there’s no relationship at all between your client and

them.

This protects the integrity of your client relationship and avoids any

confusion for your client about who they should deal with.

When you’re ready to get started, log onto the platform, go to

Research and select Model Portfolios under Search Type.

Click the search button and you will be presented a list of Models you

have been granted permission to.

The model portfolios that are available to you are determined by the

permissions granted by each DIM.

GET STARTED

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DECISION MATRIX – HOW TO SELECT THE RIGHT NAVIGATION PATH FOR KEY PROCESSES

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In this guide, we’ve included the key process steps for setting up and

managing model portfolios as part of your clients’ investment

portfolios.

Like many other platform transactions, there are different navigation

paths for some processes, depending on the existing status of each

individual client.

For example, whether they are a brand new or existing client.

For each step by step guide where this applies, we’ve made clear

which client status this relates to in the header.

Where there are multiple options but it isn’t status specific, we’ve just

included one navigation path in this guide.

For ease and quick reference, this matrix shows the different

navigation paths (along the top) for key processes (down the left-hand

side).

Note: the term ‘Product’ refers to the wrapper.

GET STARTED

DECISION MATRIX NEW/AMEND PROD PAYMENT

NEW INVESTMENT

TRANSACTION

TRANSFERIN

PAYMENTS OUT

New product, new money

Existing product, new money

Existing product, existing money

New product, transfer in

Existing product, transfer in

Existing product, switch

Existing product sell

One off payment with available cash

Reg withdrawal set up


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UNDERSTANDING CLIENT DIM CHARGES

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There’s no extra platform charge for any of the DIM model portfolios.

The value of assets in the model portfolio are simply included as part

of the overall asset value that’s used to calculate the monthly

platform charge.

Setting charges

The DIM charge will be set by the individual DIM and will always be on

an ad valorem basis.

Payment frequency

The charge is calculated and accrued daily against the client account,

from the moment they buy into the model portfolio and is paid on the

25th of each month.

Paying charges

DIM charges are paid from the cash holding within the model

portfolio.

If there’s not enough to pay, auto-disinvestment will occur on a least

volatile stock (LVS) basis for any managed funds held within the

model portfolio. Exchange traded instruments will not be subject to

auto-disinvestment.

We recommend that your client has enough in the model portfolio

cash to pay charges. As a pre-requisite, all model portfolios will be

subject to a minimum cash balance of 0.5% when they are set up. The

model cash position can be rectified by the DIM through a rebalance

or by the client through an additional deposit into a model portfolio.

Remember, as well as the DIM charge and VAT (if applicable), there’s a

cost for the individual assets such as the annual fund management

charge (AMC).

There’s a flat rate charge of £1 per trade per client

GET STARTED

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UNDERSTANDING CLIENT DIM CHARGESCONTINUED

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Viewing DIM charges

Clients can see the default DIM charge in each model portfolio fact

sheet which the DIM is responsible for updating. It’s also considered

in any client’s personal pension illustration you run for them.

(If you’ve negotiated any strategic deals with a DIM, please be aware

that this won’t show in the pension illustrations.)

You can also find it in the client’s charges schedule page on the

platform (see step 8).

Create pre-sale client illustrations

You can create a pre-sale illustration for the model portfolio that

includes DIM charges and total charge for the individual assets within

the model portfolio (although it won’t show the individual break

down).

Note: illustrations are only available for the Pension wrapper.

GET STARTED

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Once you have completed the pre-sales illustration wizard, you will be

presented with the client pension illustration. A copy of the

illustration document can also be found in Reports and Documents.

Post sale and ongoing charges are provided in the client’s charges

documents in their Library, through the Reports and Documents

found in the navigation pane. The document type can be filtered to

Charges Information to only display these.

GET STARTED

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The Charges Information Document (CID) will also contain the

investment charges based on the model selection as this is required

for MIFID purposes.

To see a breakdown of the individual charges within a client’s account,

select existing accounts, search, (select the relevant account number)

charges and remunerations.

Select Adviser Remuneration to see the adviser charges and Client

Charges to see the platform charge.

To see DIM charges, select existing account, cash account, then

statement.

GET STARTED

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SELECTING AND MANAGING MODELSHOW TO INVEST IN/BUY A MODEL PORTFOLIO (SEE DECISION MATRIX)CLIENT STATUS ONE: CLIENTS WITH NO EXISTING ASSETS IN THE TAX WRAPPER

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Where your client has no exiting assets in the relevant tax wrapper,

follow the existing accounts, new work path and then select

New/amend prod payment. This is under the Payment activities

section.

Next, click through to step four - Invest/Allocate.

Here you’ll see the client’s tax wrappers. You will also be able to

allocate (as a monetary or percentage amount) a value of the cash

payment between any selected investment type and cash. There’s no

option to protect the model portfolio from auto disinvestment.

MODEL PORTFOLIOS

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SELECTING AND MANAGING MODELSHOW TO INVEST IN/BUY A MODEL PORTFOLIO (SEE DECISION MATRIX)CLIENT STATUS ONE: CLIENTS WITH NO EXISTING ASSETS IN THE TAX WRAPPERCONTINUED

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To find the relevant investment type, go to the Search Criteria section.

Click on the Search Type dropdown box, and you’ll see several

options, including a search for a specific DIM or model portfolio.

Select the appropriate type and click on the Search box.

The search results will show on the right. If a model portfolio is not

available for a tax wrapper it won’t appear as an option to select.

Results will only bring up models which for which the DIM has

granted you permission to invest in.

You can further filter your search by Model Manager.

MODEL PORTFOLIOS

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You can also look at all the underlying assets and target allocations

that make up the model portfolio by clicking on the arrow to the left.

This expands the portfolios.

Once you have chosen the model portfolio(s) you want, click select.

More than one model portfolio can be held in a single wrapper.

MODEL PORTFOLIOS

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8


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Once you have clicked select, a pop-up box will appear, from here you

can select the tax wrapper you want to apply the investment strategy

to.

You will also need to specify the percentage or monetary amount of

your client’s payments that should go into the selected investment

strategy and if this applies to individual payments or all payments.

Once you’ve completed your selection, click on Add Investment for the

model portfolio (and any other investment selection you’ve made)to

be applied as the investment strategy. You can move onto the next

stage.

Follow the steps ensuring you specify the income strategy and

complete any other relevant sections.

MODEL PORTFOLIOS

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Note: the income strategy for the model is determined by the DIM

and will either be “Return income to model” meaning that any income

received will be added to the cash component of the model or

“Return income to platform” meaning that any income received will be

added to the cash account of the wrapper the model is held in.

Click Next step until you get to the validation screen. This highlights if

there’s still some outstanding information for you to complete

otherwise it will note the wizard has been successful.

Select Next step and you go to the final Submit stage of the process.

You can see the client and adviser documents here. You must tick the

declaration box before submitting.

Click on Complete to submit.

MODEL PORTFOLIOS

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SELECTING AND MANAGING MODELSHOW TO INVEST IN/BUY A MODEL PORTFOLIO (SEE DECISION MATRIX)CLIENT STATUS TWO: CLIENTS WITH EXISTING ASSETS OR CASH IN THE TAX WRAPPER

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Where your client has existing assets or cash in the relevant tax

wrapper, follow the existing accounts, new work path and then select

New investment transaction.

This is under the Investment activities section.

Go to step 3, Buy Trades and click on Find.

MODEL PORTFOLIOS

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SELECTING AND MANAGING MODELSHOW TO INVEST IN/BUY A MODEL PORTFOLIO (SEE DECISION MATRIX)CLIENT STATUS TWO: CLIENTS WITH EXISTING ASSETS OR CASH IN THE TAX WRAPPERCONTINUED

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To find the relevant investment type, go to the Search Criteria section.

Click on the Search Type dropdown box, and you’ll see several

options, including a search for a specific DIM or model portfolio.

Select the appropriate type and click on the Search box. The search

results will show on the right for model portfolios which are available.

Availability is based on the DIM operator granting you access to the

model portfolio and it being available for the selected wrapper. Click

Select on the relevant model.

MODEL PORTFOLIOS

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The model portfolio you’ve selected now appears in the Buy Trades

step.

Input the Order Value you wish to be invested into the model

portfolio. If there are any other investments you wish to purchase,

these can also be included in the same wizard.

MODEL PORTFOLIOS

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Read and tick the declaration at the bottom of the page in order to

continue with the model portfolio purchase.

Navigate to the final stage and when you’ve reviewed the information

select Confirm and this will complete the process.

MODEL PORTFOLIOS

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HOW TO SELL A MODEL PORTFOLIO(SEE DECISION MATRIX)

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Go to existing accounts, new work and click on New investment

transaction. You’ll find this under Investment activities.

If you want to sell out of the model portfolio, select Sell Trades. The

model portfolio will appear under Investment.

Complete the Order Value and you can enter either a percentage or

value for the amount you wish to sell.

If you complete one of the fields, then the others will automatically

populate.

MODEL PORTFOLIOS

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HOW TO SELL A MODEL PORTFOLIO(SEE DECISION MATRIX)CONTINUED

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Alternatively, you can tick the Sell All box in order to sell 100% of the

model to cash. Click Next to proceed.

When you’re ready, go to Confirm (step 6 along the top navigation).

You’ll see a display of the order(s) you’ve created.

If you’re happy to go ahead with the sale, select Confirm.

MODEL PORTFOLIOS

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HOW TO SELL A MODEL PORTFOLIO(SEE DECISION MATRIX)CONTINUED

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Proceeds from the model portfolio sale will go into the client’s

portfolio cash account.

Note: you can’t re-register assets directly in or out of a model

portfolio however, you can deconstruct a model portfolio and then re-

register the assets.

If the client holds any assets in their product which are contained in a

model portfolio which the adviser is permissioned to access, then

these assets can be reconstructed into the model.

Any assets which are not part of a model portfolio will need to be sold

into cash before they can be invested in the model.

MODEL PORTFOLIOS

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HOW TO SWITCH INTO A MODEL PORTFOLIO(SEE DECISION MATRIX)

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This is switching from one or more single investments to a Model, not

from Model to Model (not available) or from Model to one or more

single investments (not available).

Go to existing accounts, new work and click on New investment

transaction. You’ll find this under Investment activities.

To switch into a model portfolio, click through to step 4 Switches.

Select the monetary or percentage amount of one or more

investments you wish to switch from. Then complete the Switch From

section click the Find button to bring up the search box for

investments to Switch To.

MODEL PORTFOLIOS

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HOW TO SWITCH INTO A MODEL PORTFOLIO(SEE DECISION MATRIX)CONTINUED

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To find the investment you want to switch to, go to the search

investment screen and click on the Search Type drop down.

Choose Model Portfolios, and then select the appropriate model. You

will be presented with a list of models that you are permissioned to.

MODEL PORTFOLIOS

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HOW TO SWITCH INTO A MODEL PORTFOLIO(SEE DECISION MATRIX)CONTINUED

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You’ll be taken back to the Switches screen and you’ll see the

investment you’ve selected will automatically show in the Switch To

field. You will need to allocate proceeds of the switch sale to the

model. Any percentage unallocated will be deemed to remain to cash.

Go to Confirm (step 6), check the details and when ready, click on

Confirm at the bottom of the page.

MODEL PORTFOLIOS

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MOVING ASSETS OUT OF A MODEL PORTFOLIO (DECONSTRUCTION)

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It is possible to remove assets from a model portfolio without having

to sell them into cash. This must be done as a full deconstruction

(movement of assets outside of the model and back into the product

wrapper) – there is no option to move some assets out and leave

some in.

Go to existing accounts, new work and select Remove assets from

Disc Mgmt from under Investment activities.

This takes you to the screen shown below.

Select the DIM the model portfolio applies to. If models are held for

multiple DIM firms, these firms will be listed.

MODEL PORTFOLIOS

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MOVING ASSETS OUT OF A MODEL PORTFOLIO (DECONSTRUCTION)CONTINUED

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You will be presented with all the DIM Model Portfolios the client is

invested in for the selected DIM Firm.

Tick remove for one or more Model Portfolio under the selected firm

you wish to deconstruct.

If you wish to deconstruct multiple models under different DIM firms

for the same client, you will need to repeat the process.

This will take you to the submit page where you will need to confirm

the declaration before submitting.

Note: once this has been submitted, a confirmation letter will be sent

to the client.

The client’s investments stay in the funds, but they’re no longer in the

model portfolio. This means their investments won’t move in line with

the portfolio (for example when it’s rebalanced).

You can choose to leave their investments as they are, or move them

elsewhere.

MODEL PORTFOLIOS

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MOVING ASSETS INTO A MODEL PORTFOLIO (RECONSTRUCTION)

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It is possible to move assets into a model portfolio without having to

sell them into cash. This can be done as a full or partial amount of the

asset. Only assets that are already part of the model can be

reconstructed into the model

Go to existing accounts, new work and select Move assets to Disc

Mgmt from under Investment activities.

You will be taken to the screen where you can select models you are

permissioned to invest in.

MODEL PORTFOLIOS

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MOVING ASSETS INTO A MODEL PORTFOLIO (RECONSTRUCTION)CONTINUED

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Select the Model portfolio. Next you select the product containing the investments you wish to

move into the model portfolio. It will present you with the current

investment holdings within the product. Here you can select the funds

and ETI’s which are part of the model and the value you wish to move

into the model as a monetary or percentage amount.

MODEL PORTFOLIOS

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MOVING ASSETS INTO A MODEL PORTFOLIO (RECONSTRUCTION)CONTINUED

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If you elect to move all from the account, it will auto populate the

allocation (£) field with the maximum amount that can be moved.

Note: only investments held within the model portfolio may be

selected.

The final step in the page presents you with a summary of your

selection and before you can proceed, you must tick the declaration

box.

When you click submit, the assets will move into the model and be

managed by the DIM.

MODEL PORTFOLIOS

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HOW TO MAKE REGULAR WITHDRAWALS(SEE DECISION MATRIX)

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You can set up automatic regular withdrawals from the model

portfolio on the platform.

The underlying assets are sold in line with the DIM’s allocation

strategy. This means there’s nothing for you to do if your client is fully

invested in the model portfolio.

If your client is partly invested in other assets then you may need to

set up an allocation strategy yourself.

If you have clients who rely on these withdrawals, it may be a good

idea to keep a cash buffer or sell well ahead of time.

This is because a sale can’t happen if rebalancing is in progress, so

payments could be delayed.

Go to existing accounts, new work, then Payments out.

MANAGE YOUR ACCOUNTS

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HOW TO MAKE REGULAR WITHDRAWALS(SEE DECISION MATRIX)CONTINUED

32

Select the tax wrapper and payment type by clicking on the

appropriate boxes and click on Next step.

Click on Add regular payment out.


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G E T T I N G S T A R T E D


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Complete the frequency, amount and dates information then click

Save.

The withdrawal you’ve set up will show in the top box. If any

information has been entered incorrectly click on Edit to change this,

otherwise click on Next step to proceed.


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You will be taken to page for setting up the income payment strategy.

Select the investments you want to be sold to generate the income

(this includes a specific model portfolio) and whether you want a

monetary amount or a percentage amount.

Click the Next step to proceed.

You will be taken to the Review and submit step. Once you’re happy

the information is correct, click on Submit to complete the process.

Note: if you’re making a one-off withdrawal, you follow the same

process. First, you must have available cash or make a product sale

(see separate step by step guide.)


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HOW TO VIEW MPS TRANSACTIONS AND INVESTMENTS

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Go to existing account and select transactions. You will automatically

be brought to the Deposits/Withdraws page.

From here, you can select what you want to view from the navigation

bar along the top.

To view the status of Deals, select this option from the top navigation

bar.


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HOW TO VIEW MPS TRANSACTIONS AND INVESTMENTSCONTINUED

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You can search for Model Portfolio deals via Order Status and/or

Order Type. Once selected, click on Search.

This will display the results of your search. To see a full history for the

selected transaction, select H (underneath History).


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Here is an example of the information shown for a transaction To view a listing of investment transactions – navigate to the

Investments Tab. You will also be able to search for investment

related transactions through the Contract No. or Security Type.


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You will be able to filter your search to different types of investment

related transaction and this will include model portfolio related

investment transactions i.e. Buy trades, Sell Trades and Corporate

Actions.

To see the full suite of investments (including cash) for a client, follow

existing accounts, portfolio, then select Investments from the top

navigation bar.


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The page displays total holdings across all products however you can

use the drop-down list to narrow down to individual product wrapper

level.

Expand the model portfolio by clicking on the + symbol to display the

underlying investments within the model.


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UNDERSTANDING NATURAL INCOME OPTIONS

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Depending on the income strategy of the Model Portfolio, you may

wish to amend your product income strategy.

For example, if the Model Portfolio Strategy is “Return income to

platform” and you want to stop the income from being re-invested in

the model, this can be changed by following the instructions

contained in the next section(s).



CLIENTS WITH NO EXISTING ASSETS IN THE TAX WRAPPER (INC CASH)

41

To set up natural income options when setting up a new product,

select existing accounts, new work and select New/amend product

payment (under Payment activities).

You will then see the screen shown below. Click through to Payments

Out (step 6) on the top navigation bar.

There are three options for distribution and dividend payments:

• Natural income (paid into a nominate external bank account).

• Product Cash.

• Re-Invest.

Select the option you want and click on Save.


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CLIENTS WITH EXISTING ASSETS OR CASH IN THE TAX WRAPPER

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You can also edit/amend any natural income options that you’ve

already set up by following the existing accounts, transactions and

Income Strategy path.

Select Edit and you’ll be presented with the three options.

Select the one you want and click on Save.


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REPORTS TO HELP YOU AND YOUR CLIENTS

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To find a full suite of client reports, go to existing accounts, reports &

documents and you’ll see the screen opposite. Select Request Report.

Select the date range and the report you want and select Go.

Client documentation relating to the model portfolios from the DIMs

will be in the client’s document library. To see this, select Library from

the top navigation tab. Clients will see the following types of pre and

post sale documents:

• Charges.

• Illustrations (SIPP only).

• Statements.

• Contract Notes.

• MiFID II portfolio depreciation reports (see point 8).

REPORTS

REPORTS

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REPORTS TO HELP YOU AND YOUR CLIENTSCONTINUED

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Click on Complete to download the document as a PDF. You can also

add a new document to the client’s library.

Here is an example of a contract note following a buy into a model

portfolio:

REPORTS

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The Transaction listing report will also show details on purchases and

sales in relation to model portfolios.

To include the Archive Status, select the appropriate option from the

dropdown menu. Click on Save when you’re ready.

REPORTS

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The platform will automatically produce MiFID II deprecation reports,

which go to you and the client’s Document Library.

This functionality alone can save you a huge amount of

administration and cost.

There’s no manual monitoring, co-ordination with the DIM or

production of timely client communications each time the portfolio

drops by 10% or more, compared with the quarterly valuation. It’s all

done for you.

REPORTS

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Embark platformPO Box 240651 Tanfield, Edinburgh EH3 1EY // embarkplatform.co.uk

Embark platform is a trading name of Embark Investment Services Limited, a company incorporated in England and Wales (company number 09955930). Embark Investment Services Limited is authorised and regulated by the Financial Conduct Authority (Financial Services Register number 737356). 7th Floor, 100 Cannon Street, London, EC4N 6EU.EP-DIM-HTG-A 07/19

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