Tenet has unveiled a capital adequacy calculator to help IFAs determine the provision they need to make ahead of first phase implementation of the new regulations on 1 January 2014.
“Having been deferred for two years to allow firms to deal with the RDR, there are now only five months to go until the new rules and transitional arrangements come into force,” said distribution & development director, Helen Turner. “This new tool will enable advisers to establish the minimum capital resource applicable to them.”
Tenet says the calculator – together with guidance the firm has issued alongside it – allows firms to identify and understand the basic requirements and which of the two options is required.
Based on a spreadsheet, it will assist advisers in understanding what constitutes ‘fixed expenditure’ and whether or not IFAs need to be looking beyond the new minimum threshold of £20,000.
“We envisage it will prove particularly useful for those firms who will be contending with the issue for the first time,” continued Turner, “especially as the last few months tick away.
“And even though it is a staged implementation programme, we are recommending that they provision for the full amount as soon as possible.”
Simon Lunn, operations manager for Oxford-based Focus Independent Financial Advisers & Independent Insurance Consultants said: “it is a particularly useful tool to identify what provision will be required moving forward for all firms providing investment, mortgage and insurance advice.
“The calculator will help firms understand the expenditure-based requirement in order to prepare for the pending increases that look set to affect the whole industry.”
Tenet has prepared the calculator for its directly authorised members however as for network members, the network holds the capital on their behalf.
