Zurich Intermediary Platform – Transaction Impacts

A number of property funds have currently suspended trading. This document is intended to help you understand how transactions on the Zurich Intermediary Platform are impacted.

You need to consider the implication of the suspensions for your clients and determine any appropriate actions.

You may want to consider:

  • Existing investments held in property funds will remain invested and cannot be traded until fund managers remove the fund suspensions. Fund distributionswill continue to be paid.
  • Suspended funds are non-tradeable;you cannot buy or sell a non tradeable fund.
  • You need to select an alternative investment strategy for futureregular investments if your current strategy includes non-tradeable funds, this includes considering phased investments and ongoing regular direct debits.
  • Where an adviser, a network or a Morningstar model portfolio includes a non-tradeable fund, the proportion of any additional investments allocated to the non-tradeable fund will be allocated to cash inside the model portfolio. For adviser model portfolios you may want to update the model before further investment. However, existing investments in a model portfolio, that contains a non-tradeable fund, should not be rebalanced or upgraded. To move existing investments to a new model portfolio,, these models should be deconstructed and reconstructed without the non-tradeable fund.
  • Where a DIM model portfolio includes a non-tradeable fund the proportion of any additional investments allocated to the non-tradeable fund will be allocated to cash inside the model portfolio.
  • Where a regular income is being taken from a non-tradeable fund may want to review the income payment strategy. In the interim, regular withdrawals will continue to pay until there is no cash available to fund the regular withdrawal and then the disinvestment strategy, selected by you, will be used to fund the cash element inside the account.
  • On crystallising pensions the non-tradeable fund cannot be used to pay tax free cash, so the non-tradeable fund cannot be crystallised.
  • Where you have inflight transfers or payments that where the intended allocation is to non-tradeable funds, we will take appropriate action to redirect the proportion allocated to the non-tradeable fund to cash.

Following the recent announcements regarding property fund suspensions, please find attached a table showing the impact on various transactions within the Zurich Intermediary Platform if the affected fund has been suspended. This is based on our latest understanding of the platform following conversations with FNZ.

Transaction Type / Individual Fund / Model Portfolio / DIM Model Portfolio
Buy / New money in / Switch in / The suspended fund will not be able to be selected to create a buy order into the suspended fund. / If a model portfolio contains a suspended fund, the model portfolio will not be able to be selected for new money. / If a DIM model portfolio contains a suspended fund, the amount allocated to that suspended fund will be determined by the DIM. This will either be allocated to cash or will be spread proportionately across other tradeable assets.
Sell / Switch Out / The suspended fund will not be able to be selected to create a sell order from the suspended fund. / If a model portfolio contains a suspended fund, the model portfolio will not be able to be selected to create a sell order from the model. / If a DIM model portfolio contains a suspended fund, the sell order will be spread proportionately across other tradeable assets within the model.
New Phased Investments / The suspended fund will not be able to be selected for setting up the phased investment as part of the new money in wizard. / If a model portfolio contains a suspended fund, the model portfolio will not be able to be selected for new money. / If a DIM model portfolio contains a suspended fund, the amount allocated to that suspended fund will be determined by the DIM. This will either be allocated to cash or will be spread proportionately across other tradeable assets.
Existing Phased Investments / The amount allocated to the suspended fund will stick. It is imperative that advisers remove the suspended fund from the phased strategy to prevent allocation becoming stuck each time. / If a model contains a suspended fund, the allocation to the suspended fund will remain as cash within the model portfolio sub account. / If a DIM model portfolio contains a suspended fund, the amount allocated to that suspended fund will be determined by the DIM. This will either be allocated to cash or will be spread proportionately across other tradeable assets.
Edit regular DDs / The suspended fund will not be able to be added to the new asset allocation.
If the suspended fund is already part of the asset allocation, the allocation on edit will be forced to 0. / Model portfolios that contain a suspended fund will not be able to be added to the new asset allocation.
If the model portfolio containing a suspended fund is already part of the asset allocation, the allocation on edit will be forced to 0. / DIM models will continue to be able to be selected as part of the edit.
Ongoing regular DDs / The amount allocated to the suspended fund will try to place a buy, creating a stuck trade. It is imperative that advisers go in to choose a new asset allocation that does not include the suspended fund to avoid this. / If the direct debit is directed at a model portfolio that contains the suspended fund, the amount that is allocated to that fund will be allocated to cash within the model. / If a DIM model portfolio contains a suspended fund, the amount allocated to that suspended fund will be determined by the DIM. This will either be allocated to cash or will be spread proportionately across other tradeable assets.
Ongoing income payment strategy / If there is sufficient value with the account, the income payment will pay irrespective of whether the account contains a suspended fund. / If there is sufficient value with the account, the income payment will pay irrespective of whether the account contains a suspended fund. / If there is sufficient value with the account, the income payment will pay irrespective of whether the account contains a suspended fund.
Setting up income payment strategy / Asset will not be able to be selected to create an income payment strategy from the suspended fund. / If a model portfolio contains a suspended fund, the model portfolio will not be able to be selected to create an income payment strategy from the model. / DIM models can still be selected for a new income payment strategy.
Full Transfer Out / If a portfolio contains a suspended fund, we will work with the adviser and the receiving provider if applicable to understand the options. For example if the transfer is to go to another platform, we will need to check the receiving provider will be happy to take the residual fund at a later date when the suspension is lifted. / If a portfolio contains a suspended fund, we will work with the adviser and the receiving provider if applicable to understand the options. For example if the transfer is to go to another platform, we will need to check the receiving provider will be happy to take the residual fund at a later date when the suspension is lifted. / If a portfolio contains a suspended fund, we will work with the adviser and the receiving provider if applicable to understand the options. For example if the transfer is to go to another platform, we will need to check the receiving provider will be happy to take the residual fund at a later date when the suspension is lifted.
Partial Transfer Out / If a portfolio contains a suspended fund, we will work with the adviser and the receiving provider if applicable to understand the options. For example if the transfer is to go to another platform, we will need to check the receiving provider will be happy to take the residual fund at a later date when the suspension is lifted. / If a portfolio contains a suspended fund, we will work with the adviser and the receiving provider if applicable to understand the options. For example if the transfer is to go to another platform, we will need to check the receiving provider will be happy to take the residual fund at a later date when the suspension is lifted. / If a portfolio contains a suspended fund, we will work with the adviser and the receiving provider if applicable to understand the options. For example if the transfer is to go to another platform, we will need to check the receiving provider will be happy to take the residual fund at a later date when the suspension is lifted.
Re-reg in / A suspended fund cannot be selected for re-registration. / A suspended fund cannot be selected for re-registration. / A suspended fund cannot be selected for re-registration.
Re-reg out / This will depend on whether the fund manager allows this type of transaction. / This will depend on whether the fund manager allows this type of transaction. / This will depend on whether the fund manager allows this type of transaction.
Pension crystallisation / A suspended fund cannot be sold to fund cash for PCLS or income but will not affect the crystallisation process. The suspended fund should not be included as part of the crystallisation / A suspended fund cannot be sold to fund cash for PCLS or income but will not affect the crystallisation process. The suspended fund should not be included as part of the crystallisation / A suspended fund cannot be sold to fund cash for PCLS or income but will not affect the crystallisation process. The suspended fund should not be included as part of the crystallisation
Conversions from capped to flexi / A suspended fund will not stop customers from converting from capped to flexi-access drawdown. / A suspended fund will not stop customers from converting from capped to flexi-access drawdown. / A suspended fund will not stop customers from converting from capped to flexi-access drawdown.
Distributions / Distributions will continue to be paid into the wrapper cash account. / Distributions will continue to be paid into the wrapper cash account. / Distributions will continue to be paid into the cash within the DIM model.
Auto-disinvestment / The auto-disinvestment strategy will realise money from available tradeable assets. / The auto-disinvestment strategy will realise money from available tradeable assets. / The auto-disinvestment strategy will realise money from available tradeable assets.
Stuck trades / We are working with FNZ to unblock any stuck trades from the suspended funds following the recent announcements.
Once released, any stuck buy trades will remain in cash, and any stuck sell trades will remain in the suspended fund. / We are working with FNZ to unblock any stuck trades from the suspended funds following the recent announcements.
Once released, any stuck buy trades will remain in cash, and any stuck sell trades will remain in the suspended fund. / We are working with FNZ to unblock any stuck trades from the suspended funds following the recent announcements.
Once released, any stuck buy trades will remain in cash, and any stuck sell trades will remain in the suspended fund.
Work in Progress / If a work in progress wizard is retrieved and it contains a now suspended fund, this will fail on submission unless the asset allocation is amended. / If a work in progress wizard is retrieved and it contains a now suspended fund, this will fail on submission unless the asset allocation is amended. / If a work in progress wizard is retrieved and it contains a now suspended fund, this will fail on submission unless the asset allocation is amended.

There are a number of different activities available to advisers when using model portfolios. If Adviser/Network/Morningstarmodel portfolios contain a suspended fund, then advisers cannot upgrade or rebalance these model portfolios. Current understanding following discussions with FNZ is that rebalance functionality will continue to work for DIM model portfolios where suspended funds are present.

For Adviser/Network/Morningstar models, once the model portfolio asset allocation has been amended, deconstruct reconstruct functionality can be used to return tradable assets to the latest model portfolio, leaving the suspended fund as a standalone fund in the customer’s account.

Model Portfolio Activity / Versioned Model portfolio / Non-versioned Model Portfolio / DIM Model Portfolio
Deconstruct / Yes / Yes / Yes
Reconstruct / Yes / Yes / Yes
Upgrade / No, if the existing model portfolio contains a suspended fund. / N/a / N/a
Edit / Yes, but the suspended fund cannot be included in the new version. / Yes, but the suspended fund cannot be included in the new asset allocation. / Yes
Auto rebalance / No, if the existing model portfolio contains a suspended fund, the auto rebalance will not be carried out. / No, if the existing model portfolio contains a suspended fund, the auto rebalance will not be carried out. / Yes
Manual rebalance / No, if the existing model portfolio contains a suspended fund, the manual rebalance option cannot be selected. / No, if the existing model portfolio contains a suspended fund, the manual rebalance option cannot be selected. / Yes

FOR ADVISER USE ONLY – NOT FOR USE WITH CLIENTS.