Joint/individual payments in
First up, a point to note: our new business team here at Zurich is no longer required to call out for clarification if there is a payment discrepancy where the monies have come from a joint bank account, but the expectation has been keyed as individual (or vice versa).
These payments can now be processed without the requirement for a re-key, improving your experience of using the platform and reducing clients’ time out of the market.
We agreed this new approach with our anti money laundering sanctions unit, which was comfortable with the change as it only relates to payments from individual or joint accounts. Third party payments will still be queried in the normal way.
Child trust funds
Child trust funds (CTFs) were savings accounts available to children born between 1 September 2002 and 2 January 2011, which their parents could use to deposit free cash vouchers of up to £250 (or £500 if they were on a low income). They were handed out twice to each child by the government. CTFs are no longer available to newborn children, having been replaced by the junior ISA (JISA) in 2011.
If we receive a JISA application, we are required to check if the child was born within the qualifying CTF years, as they are not permitted to hold both products. If they did qualify, we will then check whether a CTF transfer expectation has been keyed.
If it has, we can proceed without any further action. If it hasn't, we'll contact you and explain that this has to happen for us to proceed (the only exception being a cash-only CTF which can be held at the same time as a stocks and shares JISA (we don't offer a cash JISA).
Please be aware of the above when submitting a new JISA application, as we've found transfer expectations are missing on approximately half of the cases where the child qualified for a CTF.
Cancelling transaction lines on taxable pension payments
One to keep an eye on: we've seen some examples recently where a pension withdrawal has been authorised and processed through our internal tax system as normal, but the adviser has then cancelled the transaction line on the portal after we've submitted it to HM Revenue & Customs (HMRC).
All of this has unfortunately meant that we incorrectly reported income and PAYE to HMRC. This could also disadvantage the client as any payment could result in a tax code change or less allowance on a subsequent payment.
To avoid this, please don't attempt to cancel a transaction once it's gone through the internal tax system in order to generate the net figure.
Full sell/switch out of a model portfolio
And finally a quick reminder that if a client fully sells or switches out of a model portfolio, the sub account will close.
If there is a direct debit for regular contributions in force and the contributions were previously being allocated into that model portfolio, any subsequent collections will be left as uninvested cash in the respective wrapper unless action is taken beforehand.
In order to avoid this scenario, please edit (or re-key) the direct debit with the revised investment choice prior to keying the full sell/switch out of the model portfolio.
Check out our platform user tips from Mar/Apr, and from May/Jun