Treating customers fairly in with profits

Treating Customers Fairly (TCF) is a key part of our regulator's (the FCA’s) approach to principles-based regulation. The FCA has set out a series of outcomes that it expects both product providers and advisers to deliver for customers. The FCA website gives full details of these outcomes.

Legal & General is committed to fulfilling its TCF requirements and helping advisers help customers.

Provider and adviser responsibilities

Product providers and advisers are required to help customers make informed decisions regarding their with profits investments. In particular, information should:

  • Provide investment performance information so that customers (or their advisers) understand how their investments are performing.
  • Enable customers to judge if the product continues to meet their requirements.
  • Remind customers of the key benefits of their product, particularly if they are about to take action that could result in them losing these benefits.

Helping you

A large number of policies have been made available across the UK market over the last few decades. With all the different approaches to providing with profits policies and products, it would be difficult for advisers to know the detail of all policies available.

We believe there are key events during the investment journey that may require specific advice, for example, switching investments, pension transfers, early retirement or surrendering/early surrenders.

The information below will help you understand the key considerations when advising a Legal & General with profits customer at these events.

Important considerations at key events in the customer's investment journey

This is not an exhaustive list as all customers and their circumstances are different. You should carefully consider the specific advice required, and be happy with the information provided for each individual. 

Consideration Key event(s) when this consideration may apply
A Market Value Reduction (MVR) may apply. You can find more information in our factsheet PDF file: Understanding Market Value Reductions Q28306 PDF size: 53KB Switching
Pension transfers
Early retirement
Surrendering/early surrenders
One off and regular withdrawals
The customer may lose out on investment growth if their policy has a guaranteed minimum annual growth rate. (Contractual Annual Interest/Contractual Minimum Addition applies, at varying rates, to certain policies).

Switching
Pension transfers
Early retirement
One off and regular withdrawals
Surrendering/early surrenders

If the customer's policy includes a guaranteed annuity rate, they may lose out on their pension income. Switching out of with profits
Pension transfers
At retirement (if the customer buys their annuity from a different provider)
One off and regular withdrawals
If the customer’s plan was set up following conversion from a Money Purchase Plan (MP2), High Performance Pension Plan (HP3) or Personal Investment Plan for Executives (PIPE), they may be eligible for a comparison of benefits, which could be valuable. Switching
Pension transfers
Retirement
One off withdrawals
The customer may lose out on the opportunity of guaranteed returns at set dates. Please see your client's Key Features for full details. Switching
Surrendering/early surrenders
One off and regular withdrawals
The policy may become non-qualifying for tax purposes and the customer may be liable for tax. (Life policies only) Switching
Surrendering/early surrenders
Assignments
Variations
The customer may lose life insurance and critical illness cover benefits that are built into their policy. Surrendering/early surrenders
Assignments
Variations
The customer may not receive as much as their Guaranteed Minimum Pension (GMP), if applicable. Pension transfers
The Personal Retirement Plan (PRP) has some valuable guarantees. There are various things customers should bear in mind if they are considering transferring out of their PRP or taking their benefits, particularly if this is earlier than age 60. See the following Personal Retirement Plan factsheets for more information:

PDF file: What is a Personal Retirement Plan PDF size: 48KB   

PDF file: Understanding your Personal Retirement Plan Q21720 PDF size: 97KB  

Transferring or taking Personal Retirement Plan (also known as Golden Years Plan) benefits before age 60

For further information and communications that will help customers make an informed decision about their policy, please view our with profits literature.