NAME

ADDRESS

XXXXXX

XXX XXX

DATE

Dear NAME

Following our recent discussions and completion of a Personal Financial Planning Profile on date, I am writing to detail the recommendations which I feel are appropriate to your current circumstances. The recommendations are aimed at meeting your objective of (amend as appropriate) reviewing your current pension provision, and taking a more proactive approach with the management of your personal pension funds.

Further to our discussions, we agreed that we would need to use self investment to get access to the type of funds you wish to invest in. Transact offer a very competitive method to hold assets such as pension funds within a wrapper that allows access to over 2000 unit trusts and OEIC’s. The advantages are that you will be able to considerably improve your investment choices and construct your own investment portfolio to match your risk profile.

I am unable to compare projections for the Transact wrapper to that of your existing providers because of the completely different charging structures. Wrappers are traditionally more expensive than stakeholder contracts. However, Transact have kept charges to a minimum by restricting investments to Cash, unit trusts and OEIC’s.

The charges are as follows:

§  Nil Establishment Fee

§  X.X% initial charge.

§  Investment Charges are dependent on the investment options chosen.

(See investment fact sheet).

§  Annual Management Charge X.XX% p.a.

§  The charges for switching funds will vary depending on the type of fund chosen.

§  Annual Administration charge of £YY.YY.

If there are other charges associated with collective investments (i.e. unit trusts and OEICs) that are levied by fund managers, then these will be charged to your Transact Personal Pension. However, you will receive the benefit of any rebates of these charges that Transact are able to negotiate on your behalf. When purchasing and selling equities on your behalf through licensed stockbrokers, Transact will also endeavour to achieve reduced dealing charges, and Transact clients benefit from any rebates they are able to negotiate.

In addition, equity dealing charges may be effectively reduced where purchases or sales are

aggregated for more than one client. Transact will pass on to you any stamp duty, government, bank or other charges, audit fees, taxes or imposts that arise out of the operation of your Transact Personal Pension (and which are not specifically excluded by the Transact Terms and Conditions).

Transact will reduce their annual charge based upon the value of your Transact Portfolio. There are two scales of discount, “Premium” and “Platinum”. Premium Discounts are shown in the table below and will apply to Portfolios in which the average Portfolio Value has been at least £50,000 for either the preceding Quarter or at all times since the Portfolio was opened, whichever period is the shorter.

Average Portfolio Value Discount on

Annual Contributions

On the first £50,000 Nil

On the next £100,000 15%

On the next £100,000 25%

On the remainder 35%

Platinum Discounts are shown in the table below and will apply instead of Premium Discounts to Portfolios in which the average Portfolio Value has been at least £250,000 for the two preceding Quarters or at all times since the Portfolio was opened, whichever period is the shorter.

Average Portfolio Value

Discount on Annual Contributions

On the first £500,000 35%

On the next £500,000 45%

On the next £1,000,000 55%

On the remainder 65%

A full list of charges are provided in the Key Features Document, enclosed with this letter.

The details of the transfers is/are as follows:

Provider / Current Fund / Transfer Fund
£ / £

These values are not guaranteed and are subject to change as the price of units fluctuates on a daily basis.

The charges on your current contract are (please detail all applicable charges for comparison)

In view of the fact that your future fund selection will incur higher charges in comparison to the existing stakeholder contracts, I would not normally recommend the transfer. However, the main reasons for transferring are as follows: (Amend as appropriate)

·  Greater fund choice

·  Total control over fund choice

·  Total control over portfolio construction

You have told me that these reasons are of importance to you. You are aware that should your future fund selection perform at the same rate as your existing providers funds, you will receive a lower final fund value as a result of this transfer. You are, however, optimistic that by utilising a greater spread of more directly managed funds you should have greater potential for enhanced returns.

(For new regular contributions) Having analysed your monthly net disposable income we agreed that you could afford monthly contributions of £amount net per month. All premiums to this pension plan are paid net of basic rate tax with any additional relief for higher rate tax payers being made as an adjustment to their tax codings, as per the information needed to be supplied on the annual tax return.

OR

(For existing regular contributions) You are currently paying £XXXX net per month into your existing product provider personal pension and I recommend that you cancel the direct debit for this once your funds are transferred to Transact. You should then initiate the regular contributions to Transact for the same amount per month, which you have confirmed continues to be affordable to you. We will / not receive any initial remuneration on the regular premiums.

The enclosed 'key features document' provides a great deal of information concerning the terms under which this policy will be issued. As previously confirmed PK Financial Planning will receive an initial commission on the transfer of XXX% of the transfer value and 0.5% trail commission.

You should read these documents carefully and contact me if you have any queries concerning them. I would like to draw your particular attention to the sections on charges and cancellation and early transfer and retirement penalty

The Name of Fund was selected to match your cautious / balanced / speculative attitude to investment risk (if more than 1 fund, state % invested in each). This fund (brief description of fund)

OR

We have selected the cash fund for the initial investment, as you do not wish to select funds at this time, as there may be an extended period before the monies reach Transact. Therefore we have agreed to construct the portfolio on receipt of the monies from your existing pension providers. We have therefore enclosed cash illustrations and it is very important to note that the charges on the new contract will be higher than shown in the enclosed illustration and therefore the funds should be invested as soon as possible. It is also important to note that the cash fund does not suit your risk profile, which we agreed to be XXXXXXX.

To view up to date fund listing and fund discounts you can access the Transact Website which can be found on www.transact-online.co.uk. If you then click on Transact Information and following that, Investment Funds, you can open this as a PDF file to see the full list of funds.

It is important that you are aware that the value of units in a unit linked investment, as well as any income, which it generates, can fall as well as rise and that past performance is not a guide to future returns.

Total Charges

The table below shows the charges for your plans over the next 12 months. Where relevant, we have used weighted averages for some of the charges and also, where regular contributions are made:-

Plan Details / Charges
Platform charges
Product Charges
Fund/Investment Charges
DFM Charges
Adviser Initial Charge
Ongoing Annual Service Charge / %
X
X
X
X
X
X / £
X
X
X
X
X
X
Total / % / £

Please note, for certain investments, there may be the possibility that other costs may arise, including taxes.

If you understand and agree with the contents of this letter, please sign the copy and return in the prepaid envelope provided.

Yours sincerely

Adviser’s Name

Title

……………………..

Client’s Name