Our reservations process: the importance of ensuring that reservations are carefully agreed, confirmed, managed and fulfilled

The process of agreeing, confirming, managing and fulfilling reservations is important.

When we agree reservations for professional adviser firms, we may be contractually and financially committed to arranging the necessary assets for the plan / plan option, with the issuing / counterparty bank, to match the reservation.

If an agreed reservation is subsequently unfulfilled (i.e. if a professional adviser firm’s client(s) does not invest in the plan / plan option as per the agreed reservation, and / or if there is any shortfall) we may incur financial losses – which can be significant – in ‘unwinding’  assets.

The risks of reservations for us as a plan manager generally increase – and our ability to mitigate them generally decreases – the closer that we get to the end of offer periods.

Because of the financial risks involved, we agree reservations on a ’best efforts’  basis – confirmation of a reservation is not a guarantee that assets will be available and we retain the right to amend and / or cancel reservations and exclude applications, if necessary.

Completed applications and funds for investments must be submitted to our plan administrator and processed within the timelines agreed and within the deadline for the offer period.

If your client is investing through a platform, the instructions may need to be given to the platform several days before this deadline.

It is, therefore, mutually beneficial if investments in respect of reservations can be completed as soon as possible after reservations are agreed – and as early as possible in offer periods.

Our process for agreeing, confirming, managing and fulfilling reservations

We operate with a robust process for agreeing, confirming, managing and fulfilling reservations with professional adviser firms. It is important that professional adviser firms who wish to arrange reservations in our plans / plan options for their clients are aware of, understand and agree to our reservation process – this is a requirement under our Professional Adviser terms of business’.

  • Step 1: Carefully agree reservations with us: Professional adviser firms should carefully identify the clients and amounts that they wish to arrange reservations in our plans / plan options for. An online request form to arrange a reservation, providing us with the basic details of the reservation wanted, should be submitted. Our business development and operations team are available to assist with the process at any point, if helpful.
  • Step 2: Confirmation of agreed reservations provided by us: A member of our business development and / or operations team will aim to make contact in response to all reservation requests promptly, to discuss requests in more detail and to agree and confirm reservations.
  • Step 3: Managing and fulfilling reservations, providing regular updates and good communication: After a reservation is agreed and confirmed, professional adviser firms should seek to manage and fulfil the reservation as agreed, including providing regular updates and good communications for us throughout the offer period.

Informing us of any unexpected changes at the earliest opportunity

Our experience of arranging and managing reservations with the professional adviser firms we work closely with evidences that carefully agreed reservations are fulfilled nearly 100% of the time, with only minor exceptions to this. In instances where agreed reservations aren’t subsequently fulfilled, our experience is that these are typically caused by unexpected client or administration issues.

In order to ensure that our reservation processes is as efficient as possible, minimising the financial risks involved, we require professional adviser firms to familiarise themselves with our process and work closely with us throughout the process of managing and fulfilling the reservation.

It is important that professional adviser firms inform us of any unexpected changes which may mean that an arranged reservation may not be fulfilled at the earliest opportunity, to enable us to try to take action to mitigate any financial loss which may result.