We’ve reached the end of an unprecedented year, but how has STEP fared?

Denese MolyneuxIt’s no secret that 2020 has been an unprecedented year; and just about everyone writing a commentary on the last twelve months would probably say the same. But how has STEP fared during this turbulent time?

I wrote in June of how lucky we were to be part of an organisation that strove to keep its members informed and engaged throughout the turbulent early months of the pandemic. I have continued to be impressed at the ingenuity of both STEP head office staff and the resilience of branches which have worked tirelessly to keep the STEP show on the road.

CPD and examinations went virtual; branches met by Zoom; the Spring Conference, Tax Conference and the recent Branch Chairs’ Assembly had the highest number of attendees ever – online, of course. The members of the events team have surpassed themselves and have more than earned our gratitude.

In the background STEP continued to contribute and influence policy; work with the All Party Parliamentary Group on Inheritance Tax and Intergenerational Fairness generated STEP positive publicity and greater visibility amongst key audiences. Thanks to Emma Chamberlain OBE TEP and Emily Deane TEP for their input into the report that was published earlier this year.

STEP’s work with the government around the 5th Anti Money Laundering directive saw a change in definition of ‘business relationship’. This is a key outcome for the industry and shows how respected STEP is within government departments.

STEP’s work with the UK Ministry of Justice on video witnessing of wills has also been a highlight, showing that our pragmatic and practical advice is being listened to in vital areas.

HMRC’s consultation on raising standards in the tax advice market is ongoing and STEP has been encouraged to contribute further. Many thanks to Sarah Manuel for her work in this area.

Whatever 2021 brings us I am confident that STEP will emerge stronger and better. The recent Branch Chairs’ Assembly proved to me just how passionate and motivated our membership is, and I very much look forward to working with you all in the year to come.

Denese Molyneux TEP, Chair, STEP England and Wales Regional Committee

FATF holds consultative forum to inform review of beneficial ownership system

On 24 November, the Financial Action Task Force (FATF) held its private sector consultative forum on beneficial ownership of legal persons, which focused on Recommendation 24 Transparency and beneficial ownership of legal persons of the FATF Recommendations. FATF stated that it is undergoing a major review of this area, which may lead to a comprehensive overhaul of the system of beneficial ownership to address issues such as inconsistencies across many countries, privacy concerns, centralised registries, legitimate purposes for access, and how information should be verified.

The forum was divided into two sessions with the first being chaired by Jennie Haslett and featuring Maira Martini, Transparency International; Jason Sharman, University of Cambridge; and John Cusack, the Global Coalition to Fight Financial Crime. The panel gave a third-party view with the aim of defining and understanding the nature and scale of problem. The following challenges were identified by the panel:

  • the quality of the information and how it is being verified;
  • the importance of flexibility and adapting requirements to the risk of the jurisdiction (as it was stated that a one-size-fits-all approach does not work);
  • that rather than implementing new laws, existing ones should be properly enforced; and
  • the need for increased collaboration between all players.

The second panel was chaired by Alexandra Kadet and featured Young Led, Department of Treasury, USA; Michela Maggi, European Commission; and Mariano Garcia Fresno, Ministry of Justice, Spain. The panel shared its views on the effectiveness of the measures being implemented and the potential problems and solutions. The discussion focused on who should have access to beneficial ownership information, the balance between what needs to stay private and what can be made available, the challenge faced when involving legal entities outside of the EU, and the need to have it centralised.

The overarching consensus from the forum was that this is a very challenging issue with no perfect solutions. FATF confirmed that a number of significant challenges were identified that needed to be addressed, such as complacency among some gatekeepers, the need for discrepancy reporting to make sure registers don’t work in isolation, consequences for non-compliance, and the need for consistency of global standards and practice.

Robert Carington is Policy Executive at STEP

Modernising Lasting Powers of Attorneys in England and Wales

The Ministry of Justice (MoJ) and the Office of the Public Guardian (OPG) have jointly initiated a project to modernise the process of making and registering lasting powers of attorney (LPAs), which may include an element of digitisation. They will be collaborating on a series of scoping events, roundtables and surveys to obtain research that will culminate in the publication of a consultation in spring 2021 to gather evidence and inform the future of the LPA service.

On 19 November the MoJ and OPG invited STEP to attend a virtual roundtable, which was introduced by Alex Chalk MP, Parliamentary under Secretary of State in the MoJ and hosted by Nick Goodwin, Public Guardian and Chief Executive of the OPG. During the roundtable, discussions were held on two specific areas of the research and engagement so far.

Improving safeguards for the donor in relation to identity checks

There was general consensus that there need to be more advanced identity checks for donors, which would consequently improve safeguards. It is a prevalent concern of the industry that identity fraud and theft are fairly accessible particularly if someone has access to a Health & Welfare LPA and the donor is incapacitated or vulnerable. It was also flagged that ID verification online may be technologically robust but there will be a small demographic, usually the more elderly, that do not have access to a computer or smartphone for verification. It was also reinforced that it is essential that any new online system is securely piloted within the industry before it is implemented.

The importance of the role of witnesses

It was recognised by attendees that the process of obtaining witnesses for LPA signing can add some gravitas and formality to the process, which in turn also gives the donor time to consider the importance of the legal document that is being created. It was also considered that it might be more appropriate to introduce digital signatures for the witnesses but to retain the obligation of the physical signature for the donor. On 9 November, STEP’s UK Industry News Digest covered highlights of the results of the first survey that has been undertaken, which showed that more than 90 per cent of 410 solicitors surveyed in England and Wales want to retain the rule requiring LPAs to be physically signed by the donor rather than by electronic means to prevent fraud.

We were informed that these areas have been marked for more extensive research under this initiative and will be discussed further.

The MoJ and OPG have stressed that empowering and protecting the individuals acting as donors in the LPA process is of paramount importance and amendments to the legislation will only be made if modernisation will provide the same level of protection or preferably enhance it. However, it is clear that the world is becoming more digital and we have seen accelerated evolution on the digital platform due to the COVID pandemic this year.

The MoJ and OPG intend to carry out extensive engagement within the industry, alongside the consultation next year, and will gather a wide range of evidence and expertise to understand user needs and challenges. STEP will continue to engage with the MoJ and OPG and monitor the progress of this initiative.

Emily Deane TEP, STEP Technical Counsel

STEP webinar on Mental Health and the Financial Advice Relationship

Robert CaringtonOn 18 November STEP will hold its third webinar in the Thought Leadership webinar series, following webinars on the remote witnessing of wills and wealth taxes earlier in the autumn.

Mental Health and the Financial Advice Relationship will be chaired by Mark Dunkley TEP, Shakespeare Martineau LLP (UK); and the panel will consist of Carol Lynde, Bridgehouse Asset Managers (Canada) and Adam Wiseman, Bridgehouse Asset Managers Advisory Panel (Canada).

Mental health has traditionally been treated either an afterthought, or in some circles of life not taken seriously at all. However due to recent and ongoing changes in trends, exacerbated by the COVID-19 pandemic and lockdown, it has become a matter of increasing public and global concern.

Mental health disorders cover areas such as depression, anxiety disorders, eating disorders, and alcohol/substance abuse; and it is estimated that around 10 per cent of the global population has some form of mental health disorder (source). In the UK, it is estimated that one in six people will experience a common mental health problem every week (source). In Canada, half of the population will have, or will have had, a mental illness by age 40.

Based on this increased awareness, advisors are now having to ask how they can detect an illness early on in a client relationship, and how they should effectively manage it to avoid any harm to the client’s health, finances, reputational risk, or damage to the advisor’s ongoing relationship with the client.

Using insights gained from research, advisor interviews and mental health expertise, this upcoming event will give an overview of the current mental health landscape and its impact on investors, providing advisors with a suite of educational tools and real life scenarios that they can apply with their clients who may be experiencing mental health issues.

Robert Carington is Policy Executive at STEP

How’s your career health these days?

What's next?

When was the last time you had a career check-up? With client concerns, professional development and a pandemic to contend with, STEP members might quite reasonably believe that career development comes low on the priority list.

Actually, the turbulence of the times is exactly why you should be investing in your career health. Digitisation combined with new work patterns and changing client expectations are just some of the characteristics of the 21st century career landscape. Rapid and continuous change is the new reality and having the agility to cope is the best way to meet not just your own needs, but also those of your stakeholders. You won’t be doing anyone any favours if you’re feeling unfulfilled and your skills are not being fully deployed. Stop paying attention to your career and you may find that obsolescence comes all too quickly.

Prevention, as they say, is better than cure and deciding that you want to take control rather than ploughing on, head down, is a key first step. So, how to get started on a new regime? Here are some thoughts from Rosemary McLean, Valerie Rowles and Mark Anderson, course guides for the Be Bold in Your Career course:

Rosemary: ‘If thinking about your career is something you haven’t done for a while, it’s a good idea to take a temperature reading on where your career is now, where it’s heading and whether that seems like a good direction for you.’

Valerie: ‘We don’t all want the same thing from work and often this changes at different stages in life anyway. What are your personal criteria for job satisfaction? Why not generate a list right now? It’s useful to think about what’s essential for you to thrive rather than just survive.’

Mark: ‘Maybe you feel you don’t have time for this? Actually, just like taking care of your general well-being, it’s about getting into good habits and making them part of normal working life.’

Perhaps you’re broadly content with what you’re doing and just want to continue developing. Or maybe you want to change something … or even transform everything!

Career Innovation are currently offering the ‘Be Bold in Your Career’ course (usually GBP225) free to STEP members. The course will trigger ideas and galvanise you to be more proactive in your career.

  • You’ll feel confident to tell the story of your career in a way that opens up new possibilities for you.
  • You’ll map your network of contacts, tapping into their knowledge about trends on the horizon so that you can start to future-proof.
  • You can work out the kind of stretch that will shake you off a career plateau: building courage in stages is a wonderful liberation from the paralysis of inertia.
  • Or determine how to actively influence how others see you, communicating your career brand and having career conversations that lead to tangible, positive outcomes.

Be Bold in Your Career September 2020 is open for enrolment until 22 Sep. Log in to the STEP site to find out more and to book.

Rosemary McLean is a Director, and Valerie Rowles and Mark Anderson are Consultants at Career Innovation.

STEP’s upcoming Thought Leadership Series: expert perspectives on today’s big issues

Tony Pitcher TEPOne of the most exciting things set to happen in STEP this year was to be our fourth Global Congress, which would have brought together leading experts in Dublin to exchange insight and expertise with delegates from all over the world. Sadly, the COVID-19 pandemic has meant the event has had to be postponed, but we are looking forward to holding it in June 2021 instead.

The agenda for next year’s Global Congress will remain focused on the big issues impacting the industry both now and in the future, with the wide variety of topics being discussed highlighting the breadth of expertise represented across STEP’s membership.

The world does not stop though, and while we look forward to Dublin we have some very pressing matters to discuss in the meantime. As Chair of the Congress panel, I was asked, alongside fellow STEP board members, in the wake of the COVID-19 pandemic, to review what those matters might be for our industry and the short and long-term impact.

As a result, STEP has launched the Thought Leadership webinar series, kindly sponsored by Rawlinson & Hunter, bringing you some of the more topical elements of the Congress agenda over the next six months. The sessions will include a look at what the tax landscape may look like post-COVID; the risks to vulnerable people when making financial decisions; issues arising for those caught in jurisdictions during the pandemic and how we, as STEP, can rejuvenate the reputation of trusts worldwide.

We’re also delighted to welcome Professor Jason Sharman to the series. Jason will be talking about the findings of his study over lockdown, co-authored with Michael Findley and Daniel Nielson, which involved soliciting offers from 5,000 banks and 7,000 corporate service providers to test know-your-customer standards. The results will be of huge interest to our industry.

The series kicks off with the highly topical subject of video-witnessing of wills, given the changes that have happened in a number of jurisdictions during the pandemic. The panelists will not just look at what has changed but whether the changes are here to stay.

We hope you’ll join us throughout this series, as we showcase the breadth of interests of STEP’s membership and provide up-to-date knowledge on the subjects that matter to our industry. For more information, head to the STEP website.

Tony Pitcher TEP is Director at LGL Trustees and a member of the STEP Board.

Law Society issues guidance to solicitors advising on tax

Emily Deane TEPThe England and Wales Law Society has issued guidance to solicitors who advise on tax, drawing out their obligations within the Solicitors Regulation Authority (SRA) rules and regulations.

The new guidance acknowledges the Professional Conduct in Relation to Taxation (PCRT), which has been developed and published by several UK accounting and tax professional bodies, including STEP, and sets out the principles and standards of behaviour expected of all members. Compliance is mandatory for STEP members advising on UK tax matters and failure to comply may result in disciplinary action.

The Law Society explains that it has not adopted the PCRT because the obligations of the solicitors’ profession as a whole are already set out by the law and the relevant regulatory rules governing solicitors. These rules have been formulated over centuries, and they comprehensively describe the relationship between solicitors and their clients. They draw the right balance for the solicitors’ profession by combining the protection of the interests of the client, the interests of the public and the rule of law, while ensuring that access to legal advice is preserved and backed up by an independent regulator.

However, solicitors advising on tax matters are encouraged to be familiar with the content of the PCRT, which overlaps with many of the existing professional obligations on solicitors. For example, the five core principles of the PCRT (integrity, objectivity, professional competence and due care, confidentiality and professional behaviour) are consistent with the legal and regulatory framework that already applies to solicitors.

The PCRT expressly provides that it is not to be interpreted so as to be in conflict with any other professional duties of solicitors. Solicitors that are subject to the PCRT because they are members of one of the signatory professional bodies should therefore comply with the obligations and duties required by the SRA and covered in this guidance in priority over the PCRT.

HMRC also produces standards that set out its expectations of tax advisors. HMRC published a Standard for Agents which sets out its expectations of individuals and businesses that professionally represent or advise taxpayers. Where relevant, solicitors may wish to consider the contents of this or any other HMRC standards, but those standards do not form part of a solicitor’s professional obligations.

Emily Deane TEP, STEP Technical Counsel

Introducing STEP’s new Private Client Awards charity partner, the World Literacy Foundation

children with booksEach year, STEP supports a charitable organisation through its Private Client Awards. Instead of charging an entry fee to the Awards, we ask entrants to make a donation to our chosen charity; attendees can donate at the event itself, and STEP members can also donate online here. Charity partnerships are for three years, and previous partners include Room to Read, Feed the Minds, the International Senior Lawyers Project, and Operation Smile. We typically raise in excess of GBP200,000 over the three-year partnership as a result of the incredible generosity of entrants, attendees and STEP members. 

This year we have started working with a new charity partner, the World Literacy Foundation (WLF). Here, Louise James and Paula Rico introduce the charity and its work.

Imagine you had no education and could not read or write, blog Louise James and Paula Rico. How difficult would your life be? Most of us take our literacy skills for granted but there are over 750m illiterate people (according to UNESCO) who cannot read a single word, and more than 2 billion who struggle to read and write a sentence.

While this means enormous difficulties with such everyday tasks as reading a newspaper, understanding a traffic sign, or filling in a job application, the full consequences of illiteracy or functional illiteracy go much further, resulting in the marginalisation of many individuals from actively participating in their communities and societies.

The WLF was created in 2003 to reduce children’s illiteracy rates worldwide. The charity works to ensure every child, regardless of their background, has the opportunity to acquire literacy skills to succeed at school and beyond. Last year it reached 315,000 children and young people in five continents, and distributed over 26,600 books.

The charity uses the latest educational technology, including digital programs, solar-powered tablets and smartphone apps, to aid teaching and learning work in Africa and South America. It is also active in marginalised communities in Australia, the UK and the US. The WLF is also a global promoter of literacy, aiming to spread awareness, educate and mobilise people to action.

The WLF’s work would not be possible without the support of volunteers, donors and corporate partners, such as STEP, which has nominated us as its charity partner for the Private Client Awards for the next three years. All funds raised will support our literacy projects across the world, benefiting the lives of thousands of vulnerable children.

WLF founder and ceo Andrew G Kay said, ‘I strongly believe literacy is the pathway to young people reaching their full potential and is a route out of poverty. I am absolutely delighted that STEP has chosen to support WLF through this special partnership. By raising awareness of our work and encouraging fundraising through its networks, STEP is making a big difference for children in poverty.

‘The PCA, that brings together so many top law firms, tax specialists and practitioners, is simply a wonderful platform for WLF to share news about the impact our literacy work has and why donations received are so vital. Thank you.’

If you are able to read this article then count yourself lucky; at some point, you learned to read and write and you have the power to take action and help those who cannot. Find out more about the WLF at www.worldliteracyfoundation.org.

Louise James, UK and Europe Fundraising Manager and Paula Rico, Marketing Coordinator, World Literacy Foundation.

Belonging to a supportive organisation like STEP come into its own in such difficult times

Denese MolyneuxWhen writing this blog, usually the first thing I do is to refer to my previous one I posted to comment or update England and Wales members on items mentioned. Not this time.

The worldwide COVID-19 pandemic has affected everyone, whether they have contracted the virus or not. It is in such circumstances that the benefits of being a member of a supportive organisation really come into their own.

Mark Walley and the team at STEP Head Office are to be congratulated on keeping things on an even keel throughout this period of immense upheaval. While managing the logistics of moving to home working, the staff have pulled together resources to help members keep fully updated, starting with the COVID-19 Technical Hub on the STEP website. After that there are any number of links to new information, from holding virtual meetings; changes to examinations; rescheduled conferences; maintaining CPD and just about any other subject of relevance. The Communications team has excelled itself in managing the STEP online offering to best support the membership.

Life goes on and in other non-COVID news, The All Party Parliamentary Group for Inheritance Tax and Intergenerational Fairness was launched on 28 January to positive media coverage. STEP’s involvement with this initiative has served to enhance our reputation and strengthened stakeholder relationships in this vital area.

The Legal Services Board is currently reviewing how to ensure that legal professionals remain competent throughout their careers. The call for evidence deadline has been extended to 26 June, and STEP will be making a submission to that review.

HMRC is keen to raise standards in the tax advice market and has called for evidence to support the UK Government’s crackdown on promoters of tax avoidance schemes. It is also conducting a review to give taxpayers assurance that advice received from professionals is reliable. Again STEP will be giving a response.

As we emerge from the unusual circumstances in which we find ourselves it will be interesting to see which parts of our lives revert to existence pre-COVID. By the time of my next blog in December, I hope we will have had the England and Wales Branch Chairs Assembly – maybe via video conference. I look forward to hearing your own experiences and sharing some new, and quite probably unforeseen, best practice.

 

Denese Molyneux TEP, Chair, STEP England and Wales Regional Committee

The COVID-19 crisis prompts a rash of philanthropic giving

Robert CaringtonOn 13 May 2020 the STEP Philanthropy Special Interest Group (SIG) in partnership with Philanthropy Impact hosted the first of its 2020 Philanthropy Programme series of events with a webinar entitled ‘Core Components of a Professional Philanthropy Advisory Practice’.

The event attracted a number of delegates from 18 different jurisdictions, and discussed a range of issues for philanthropy advisors. It was ably hosted by George King IV, Partner, MASECO Private Wealth; with Jo Bateson TEP, Partner, KPMG; Cath Dovey, Co-founder, Beacon Collaborative; and Alana Petraske, Partner, Withers Worldwide LLP, on the panel.

The current COVID-19 crisis and the deep and radical changes in society it has brought has prompted an increase in people wishing to give, and brought about a more important role for the philanthropy advisor. This means it is essential for advisors to have the right tools in place, and to be aware of clients’ shift in attitudes towards philanthropic giving, and what it involves.

Advisors need to feel comfortable about providing advice, especially while getting used to new ways of working. While much work can be done online, there are still concerns over physical actions, like signing cheques for clients, although on a positive note, many regulators have taken a pragmatic approach, recognising the need to work remotely.

A number of reasons were given for the increase in charitable giving. Clients want to be seen to be doing something, or they are using the increased ‘spare time’ to reflect on their place in society and how they could better themselves, with charitable giving being a solution. Many are acting in response to the current situation with a sense of urgency, and want to donate as quickly as possible.

During the first two weeks of the crisis, established infrastructure funds were able to utilise pre-existing networks and donate immediately and strategically. Subsequently there was a broader response, with non-regular clients and new donors emerging. Many of these had used the first few weeks to get their own affairs in order, and then wanted to act with speed. Anecdotal evidence showed that donors range from those with structures in place, to those who need preliminary hand-holding.

Even though the crisis is a generation-defining moment and clients want to donate quickly, several on the panel urged advisors to recommend clients should hold fire, and instead research their charities of interest, with a view to deploying their wealth strategically over a longer period (6 -12 months). It’s vital to manage clients’ anxiety and also assess the risk factors, as charities will be in distress for some time, and many will not survive at all. Reports show that in the UK, 40-70 per cent of charities may be dissolved in the next 12 months.

Another key, and indeed quite obvious issue is whether the client has sufficient money to give. The outbreak has brought out basic level survival instincts (such as the run on loo paper) and if someone feels under attack from the virus, they may not want to give, or feel they can’t.

The panel also suggested advisors be mindful of their own businesses, and review what they expect to happen in the next 6 months – 2 years. Points to consider include: where their work comes from, what will future working will look like, and what clients will be seeking from them. However, now is the perfect moment for advisors to be the philanthropy champion at work and integrate philanthropy into wealth planning.

The event ended with the panel highlighting what they felt were the key skills required for advisors in the industry:

  • Collaboration and the importance of building up a community which you can utilise and engage with.
  • Honesty regarding your skills, and being prepared to practice and train those who need further improvement.
  • To focus on a useful knowledge base, such as understanding what grant makers and other key players are doing.

 

 

Robert Carington is Policy Executive at STEP