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FOCUS ON VALUABLE BUSINESS.New Model Adviser Conference 2010

RETIREMENT PLANNING SOLUTIONS

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WHO WE ARE.

PAUL MEASURES JAMIE VALE ANNE DUNLOP CLAIRE BROOKS

Legal & General Legal & General Legal & General Suffolk Life

Sales Director,IFA Key Accounts

Director, BusinessDevelopment

Head of PensionDevelopment

Technical Team Manager

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WHAT YOU TOLD US

THREAT OR OPPORTUNITY?

THE CHALLENGE

SOLUTIONS

WHAT WE WANT TO TALK ABOUT.

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WHAT YOU TOLD US.The changing face of retirement planning solutions

business - % from existing clients.

7%

9%

16%

24%

38%

5%

8%

19%

22%

29%

16%

6%

0% 5% 10% 15% 20% 25% 30% 35% 40%

None - 10%

11-30%

31-50%

51-75%

75% and over

Don't know

Currently

Post RDR

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37%

16%

15%

15%

4%

4%

3%

3%

2%

36%

17%

13%

14%

5%

7%

3%

2%

3%

0% 5% 10% 15% 20% 25% 30% 35% 40%

Competitively priced products

Platform functionality

Range of pre and post retirement product solutions

Speed and quality of administration service

Portfolio Planning tools

Comprehensive MI

Pension Consolidation tools

Accessible sales support

Other

Currently

Post RDR

MOST IMPORTANT PROVIDER SERVICE.

VALUABLE BUSINESS ESSENTIALS.

55%

54%

48%

44%

40%

37%

36%

36%

35%

22%

18%

24%

30%

29%

22%

30%

24%

33%

33%

12%

30%

28%

21%

16%

23%

34%

31%

40%

31%

31%

52%

48%

53%

0% 20% 40% 60% 80% 100%

Investment platforms

Compliance support

Back office systems

Fund groups

Research houses

Specialist SIPP providers

Wraps

Professional connections

Traditional product providers

Discretionary fund managers

Outsourced investment modelling

Currently essential and will remain so Will become more important post RDR Not important

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THREAT OR OPPORTUNITY? • Capital adequacy

• Fees • New income / recurring income • Right level of service for the right price

• Business Model

• Qualification requirements

• Client• Confidence • Financial awareness

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COMMERCIAL CHALLENGE

Typical Revenue from a Commission Based Savings Sale =

£1,400 Initial Charge + £200 pa

Based on average total case size of £40,000 attached a blended average of 3.5% initial + 0.5% trail

L&G’s own research shows 75% of customers expect charges to be less than £100 per hour

More than 50% of advisers expect to charge in excess of £150 per hour

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WORKED EXAMPLE

Relationship Based Advice

Required revenue generation per adviser pa £150,000

Adviser capacity 150 customers per adviser

Sale Conversion Rate N/A

Revenue required per customer £1,000

Revenue generation on Assets Under Advice 65bps (+VAT!)

(based on a charging structure of 0.5% ongoing + 3% initial on new assets equating to 5% of AUA a year)

Required average AUA per customer £154,000

We estimate 1.2 million households in UK with invest able assets above £100,000 of which 600,000 take advice.

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WORKED EXAMPLE

* Note this will need to be achieved with less ‘recycling’ of existing customer assets

** No ongoing service = no ongoing ‘trail’ fee

Relationship Based Advice Transactional

Required revenue generation per adviser pa £150,000 £150,000

Adviser capacity 150 customers per adviser 200

Sale Conversion Rate N/A 66%

Revenue required per customer £1,000 £1,100

Revenue generation on Assets Under Advice 65bps (+VAT!) N/A

(based on a charging structure of 0.5% ongoing + 3% initial on new assets equating to 5% of AUA a year)

Required average AUA per customer £154,000

Transactional Advice Fee 3% (+VAT)**

Required average investment size £ 37,500*

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THE RETIREMENT JOURNEY.

WEALTH ACCUMULATION PHASE

WEALTH DE-ACCUMULATION PHASE

RetirementStart working

Starting out

Retirement options

Asset building

De-risk and asset transfer

Assets £

HOW THINGS MAY CHANGE.

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WEALTH ACCUMULATION PHASE

WEALTH DE-ACCUMULATION PHASE

RetirementStart working

Starting out

Retirement options

Asset building

De-risk and asset transfer

Assets £

Debt management

Consolidation opportunities

Generation transfer (IHT)

Income strategy

TAX PLANNING

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SOLUTIONS.BUSINESS AREA HOW WE MAY BE ABLE TO HELP

COST AND VALUE

Explaining the value of your service

Succeed in difficult times

Placing a value on your time

REVENUE AND EQUITY

Getting the most of your existing clients

Targeting clients to increase revenue streams

Developing effective professional connections

Maximising business value

RISKS AND STRATEGIES

Building TCF principles into your work

Planning business succession

Identifying your client propositions

Influencing business change

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WORKING IN PARTNERSHIP.

ADVISERS

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THANK YOU FOR YOUR TIME.

We’d be please to speak to you in greater detail about Retirement Planning and Business Solutions with Legal & General so please come and see us during lunch or give us your details and we’ll get in touch.

We’d like to invite you to enter our prize draw to win a case of wine!

To enter please place your business card in the dish near the exit.

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CONSOLIDATION. Millions perhaps billions of pounds in pension assets in poorly performing , high charging or restrictive pension plans.

The benefits• Better control over pension assets• Broad investment choice, flexibility and control• Single portfolio • MI, administration, economies of scale• Balance of assets• Act against risks• More informed choice as retirement approaches