1. The Financial Services Authority (FSA) The FSA is the independent watchdog that regulates financial services. It requires us to give you this document. Use this information to shop around and decide which firm to use. 2. Our Services We offer an initial meeting without charge when we will describe our service more fully and explain the payment options. If you decide to go ahead, we will: Gather and analyse personal information about you, your finances, your needs and objectives; Recommend and discuss any action we think you should take and, with your agreement, arrange relevant investments for you. 3. What are your payment options? Not all firms charge in the same way. We will discuss your payment options with you and answer any questions you have. We will not charge you anything until you have agreed how we are to be paid. Paying by fee. Whether you buy a product or not, you will pay us a fee for our advice and services. If we also receive commission from the product provider for selling you a product, we will reduce the fee; or increase the amount invested; or refund the commission to you. Paying by commission (or product charges). If we sell you a financial product, we will normally receive commission on he sale from the product provider. Although you pay nothing up front, that does not mean our service is free. You still pay us indirectly through product charges. Product charges pay for the product provider’s own costs or any commission. These charges reduce the amount left for investment. If you buy direct, the product charges could be the same as when buying through an adviser, or they could be higher or lower. We will tell you how much the commission will be before you complete an investment, but you can ask for this information earlier. 4. How much might our services cost? Fees We will agree the rate we will charge before beginning work. We will tell you if you have to pay VAT. Our typical charges are: Principal/Director/Partners £150-£200 per hour Financial adviser £100-£150 per hour Administration £50-75 per hour You can ask us for an estimate of how much in total we might charge. You can also ask us not to exceed a given amount without checking with you first. Commission Tables 1 and 2 show examples of the amount of commission we would receive (or the equivalent we earn through product charges) and compares that with the market average (see notes 1 & 2 at the end of this section 4). The amounts vary according to the type of product, the amount you invest and (sometimes) for how long you will invest or your age when you start the product. We will confirm the actual amount to you before selling you a product. Table 1 – Commission if you pay monthly Monthly Products Example term or age Comparison of costs An example based on £100 per month     Our maximum The market average Our maximum This column shows the maximum our sales and advice costs would be for a monthly investment or premium of £100, ignoring any increases through fund growth Collective Investments (e.g. unit trusts) Any 3% of all payments plus 0.5% of your fund value each year from month 1 2.3% of all payments plus 0.5% of your fund value each year from month 1 £36 each year plus £6.00 in year 1, £12 in year 2 and so on (The actual amount in later years will vary in line with your fund growth) Endowments 10 year term 25% of your first 12 payments then 2.5% of all payments from month 17 30.6% of your first 12 payments then 2.5% of all payments from month 17 £300.00 initially plus £30 each year from month 17 Whole of life Assurance Age 40 109.5% of your first 12 payments then 2.5% of all payments from month 49 95.0% of your first 12 payments then 2.5% of all payments from month 49 £1,314.00 initially plus £30 each year from month 49 Personal and Stakeholder Pensions 25 year term 51.1% of your first 12 payments then 2.5% of all payments from month 28 24.3% of your first 12 payments then 2.5% of all payments from month 28 £613.20 initially plus £30 each year from month 28 10 year term 24% of your first 12 payments then 2.5% of all payments from month 13 13.2% of your first 12 payments then 2.5% of all payments from month 13 £288.00 initially plus £30 each year from month 13 Personal Pension Schemes Not all types of personal pension scheme are included in the information above about commissions. Instead only the more common types are included, and schemes such as SIPPs are not. Before we start advising you, we will inform you of how much we could be paid if we do recommend one of these products to you. You can also ask us about commission we might receive on underlying investments we recommend you hold within a SIPP if not contained in the information above. Table 2 – Commission if you invest a lump sum Lump Sum Example term or age Comparison of costs An example based on £10,000 lump sum     Our maximum The market average This column shows the maximum our sales and advice costs would be for a lump sum investment of £10,000, ignoring any increases through fund growth Collective Investments (e.g. unit trusts) Any 3% of the amount you invest plus 0.5% of your fund each year after the first 1.8% of the amount you invest plus 0.5% of your fund each year after the first £300 plus £50.00 each year from year 2 (The actual amounts in later years will vary in line with your fund growth) Investment Bond Any 3% of the amount you invest plus 0.5% of your fund value each year from year 2 3.0 % of the amount you invest plus 0.5% of your fund value each year from year 2 £300.00 plus £50.00 each year from year 2 (The actual amount in later years will vary in line with your fund growth) Annuities Any 1.5% of the amount you invest 1.3% of the amount you invest £150.00 Income Drawdown Any 3% of the amount you invest plus 0.5% of your fund each year after the first 2.2% of the amount you invest plus 0.5% of your fund each year after the first £300 plus £50 each year from year 2 (The actual amounts in later years will vary in line with your fund growth) Personal and Stakeholder Pensions Any 8% of the amount you invest 5.3% of the amount you invest £800.00 Personal Pension Schemes Not all types of personal pension scheme are included in the information above about commissions. Instead only the more common types are included, and schemes such as SIPPs are not. Before we start advising you, we will inform you of how much we could be paid if we do recommend one of these products to you. You can also ask us about commission we might receive on underlying investments we recommend you hold within a SIPP if not contained in the information above. Notes: The market average figures are estimated by the FSA using actual figures from a representative sample of regulated firms and are shown in a way that you can compare with our own maximum rates. Where a firm sells its own products it must calculate its figures according to FSA guidelines. 5. Further information If you need any more help or information ask your adviser or: Visit www.fsa.gov.uk/consumer; or Call the FSA help line on 0845 606 1234
Somerville Financial Services Ltd is authorised and regulated by the Financial Services Authority Somerville Financial Services Ltd is an Independent Financial Adviser ©Copyright 2007 Somerville Holdings plc