Terms of Business

REGULATOR’S STATEMENT

Those who advise on life assurance, pensions or unit trusts are

EITHER independent advisers

OR representatives of one company.

Your adviser is independent and will act on your behalf in advising you on life assurance, pensions or unit trust products. Because your adviser is independent he or she can advise you on the products of different companies.

Introduction

Your Independent Financial Adviser is an appointed representative of Sage Financial Services Limited which is authorised and regulated by the Financial Services Authority (FSA) and bound by the rules of the FSA.

Our permitted business is:

• advising on Pension Transfer and Pension Opt-outs
• advising on and arranging on investments
• advising on and arranging regulated mortgage contracts
• advising on and arranging non-investment insurance contracts (general insurance)

You can check this on the FSA's Register by visiting the FSA’s website www.fsa.gov.uk/register or by contacting the FSA on 0845 606 1234.

For the purposes of this letter you have been classified as a “private customer”

Term

These Terms of Business will take effect from the date upon which they are issued to you and will remain in force until such a time that you are issued with revised terms. You or we may terminate our authority to act on your behalf at any time without notice period or penalty. Notice of termination must be given in writing, and will be without prejudice to the completion of any transactions already initiated. If you specifically require us to cease to deal with transactions which are already in progress, this should be confirmed in writing.

Authority to Act

In order to avoid possible disputes we normally require our clients to give us instructions in writing, prior to any transactions being arranged. We will however, accept oral instructions provided they are subsequently confirmed in writing.

Investment Objectives

Your independent financial adviser will confirm his understanding of your investment objectives in writing as soon as practicably after these have been ascertained. Such letters will also confirm if there are any restrictions on the type of investment or market in which you wish to invest.

Conflicts of Interest

We offer independent advice, but occasions can arise where we or one of our customers, will have some form of interest in business which we are transacting for you. If this happens, or we become aware that our interests or those of one of our customers conflict with your interests, we will inform you in writing and obtain your consent before we carry out your instructions.

Loans

Sage Financial Services Limited is part of Inter-Alliance Group Plc which is 100% owned by Millfield Group plc. The Millfield Group plc has received loans from the following companies whose financial products, among others, we may recommend to you. These loans were to provide further working capital funding the merger with Inter-Alliance Group plc:

• AXA Sun Life plc, which includes AXA, Sun Life and Guardian Royal Exchange plc, has provided us with loans of £3 million;
• Friends Provident Life & Pension Limited which includes all Friends Provident subsidiaries has provided us with loans of £3 million;
• The Prudential Assurance Company Limited, which includes Prudential, M&G and Egg has provided us with loans of £3 million;
• Scottish Widows plc as a subsidiary of TSB Group, which includes Scottish Widows Bank and Cheltenham and Gloucester , has provided us with loans of £3 million;
• Skandia Life Assurance (Holdings) Limited which includes all Skandia subsidiaries has provided us with loans of £3 million.

Accounting for and Registration of Investments

The reasons why any advice given is considered as suitable to your circumstances, and details of any investments made or discontinued will be confirmed in writing as soon as practicable following such advice being given.

We will make arrangements for all your investments to be registered in your name unless you first instruct us otherwise in writing. We will forward to you all documents showing ownership of your investments as soon as practicable after we receive them; where a number of documents relating to a series of transactions is involved, we will normally hold each document until the series is complete and then forward them to you.

Remuneration

We act as your agent in advising you and arranging investment transactions, and normally derive income from commission paid to us by Life Assurance companies and Investment companies with which investments are made. Before you sign any application or proposal we will inform you of the amount of commission payable to us on any such investment. We normally retain that commission and therefore make no charge to you. In circumstances where work that we undertake does not attract commission we may make charges to you, such charges being in the form of a flat fee or hourly rate. Where we propose to charge a fee, we will agree its basis in writing before we carry out any chargeable work. If we receive a commission or other form of benefit from the issuer of a security or other intermediary, we will inform you but we will not tell you its amount unless you ask us to do so.

Client Monies

WE ARE NOT AUTHORISED TO HANDLE CLIENTS` MONEY. All cheques for premiums or investment money of any kind must be payable to the Life Office or investment operator. In no circumstances must a cheque be made out to, or cash given to, Sage Financial Services Ltd or its appointed representatives, which is investment money of any kind.

Complaints

If you should have any complaint about the advice you receive or a product which you have bought please contact our Complaints Manager, Sage Financial Services Ltd, Elmwood Court, Springwood Close, Tytherington Business Park, Macclesfield, Cheshire, SK10 2XF Tel: 01625 667000.A copy of our internal complaints handling procedures is available upon request. If you are not satisfied with the outcome of an investigation you may refer your complaint to the Financial Ombudsman Service. ( South Quay Plaza , 183 Marsh Wall, London , E14 9SR Tel: 020 7216 0016).

Professional Indemnity Insurance/Investors Compensation Scheme

We maintain professional indemnity insurance.

If you make a valid claim against us in respect of investments which we have arranged for you and we are unable to meet our liabilities in full, you may be entitled to redress from the Financial Services Compensation Scheme. Details of the cover provided by the scheme are available from the website. www.fscs.org.uk or alternatively we can send you details at your request.

Investment Risk

All investments carry a degree of financial risk which will tend to increase in proportion to the potential rate of return on the investments. Any product which is directly or indirectly invested in assets which may fall in value (for example equities) may itself fall in value along with any decrease in the value of those assets. Before entering into any investment agreement, you should ensure that you understand the risk associated with the product and are content to accept the level of risk.

Data Protection Act 1998

In order to advise you properly we must obtain certain information from you about your financial and personal circumstances, in order to assess the suitability of particular products and services. All client information is treated as confidential however by accepting our Terms of Business you agree that the information which you give us may be disclosed to third parties for the purpose of processing your application.

Unless you ask us not to, we may use the information that we hold about you to contact you from time to time by post, fax, e-mail or telephone to bring your attention to additional products or services which may be of interest to you.

We will keep records of all business transactions for at least six years. You have a right to inspect copies of contract notes and entries in our books or computerised records relating to your transactions. We treat all clients` records as confidential, so we reserve the right to give you copies of your particular record, rather than allow access to files which may contain information about other clients.

Change of Address

If you change address please ensure that you inform us, and the life assurance company or unit trust manager with whom you have invested, in writing, in order that our records can be amended accordingly.

Contact Arrangements

If you are unable to contact your independent financial adviser or he is unavailable (for example due to illness) we would not want your interests to suffer. Hence you should contact Sage Financial Services at the address and telephone number given in this letter if you require urgent transactions to be carried out, unfinished transactions to be completed or require assistance and are unable to contact your usual financial adviser.

Sage Financial Services Ltd, Elmwood Court, Springwood Close, Tytherington Business Park, Macclesfield, Cheshire, SK10 2XF .

Tel: 01625 667000 Fax: 01625 667070