ISAs, Unit Trusts, OEICs, Investment Bonds and more
Often the first product that is utalised for a client is an ISA, (Individual Savings Account). Other investment products such as Unit Trusts, OEICs, (Open Ended Investment Companies) and Investment Bonds have their place as well. They have varying tax efficiencies and some can be used for specific purposes such as Inheritance Tax Planning or School Fees payments.
The Government has encouraged private sector investment and savings for some years, but there are limits in the most tax efficient first line products, ISAs.
ISA plan limits currently are: £3600 Cash ISA, £3600 Stocks and Shares ISA OR, £7200 for a Stocks and Shares ISA.
The Government has indicated that ISAs are intended to be part of the long term future for savers, so it is a good idea to maximise the current available allowances, subject to funds available of course.
The tax efficiencies available via ISAs are that all the capital growth and any dividend based income within the plan are tax free. However, once the funds are removed from an ISA wrapper it is not possible to re-invest within the same plan at a later date. Unfortunately the additional tax advantage of repayment of the tax paid on dividends, that the fund managers of ISA based funds were previously eligible to, is no longer available due to the removal of this tax break by the chancellor.
With all investments it is a common misconception to rely on the tax efficiencies within the product to boost the performance of the funds. It is of paramount importance to make sure that the funds within the portfolio are of high quality. Major considerations are:
- Charges
- Quality and continuity of past performance
- Experience and track record of the fund managers responsible for the investment fund
At Templegate we:
- Identify for you funds with a solid and consistent performance
- Balance your portfolio in such a way that the downside is minimised in the poor markets, while the upside is not too inhibited in the fair weather markets
- Monitor and maintain the performance and charges of the funds you are already invested in.
- Are remunerated via fees, commission or, a combination of both.
In the hype of the late Ninety’s markets, many banks and building societies jumped on the bandwagon of fund management, enjoying the advantage of the ready made client base they had available, persuading many clients to invest into their own products managed by their own fund managers. Often this was done without properly explaining the levels of risk involved, nor was any performance comparison provided on an ongoing basis to show how these funds were performing compared to the market sector to which they belong. (See table below).
Here is an example of differences in performance, (including the downturn years seen between 2000-2003), between a couple of such funds and funds of similar risk profile managed by experienced investment fund managers. The performance of the sector average over this period has also been provided:
Name of Fund |
Amount invested 10 years ago |
Value Now |
Abbey National N&P UK Growth |
£1,000 |
£1,585 |
Nationwide UK Growth |
£1,000 |
£1,613 |
New Star Strategic Capital |
£1,000 |
£3,063 |
Fidelity Special Situations |
£1,000 |
£4,046 |
UK Equity Sector All Share Average |
£1,000 |
£2,030 |
Data source: Money Management, April 2007 edition.
We keep our ears to the ground so that should events happen which would affect the future performance of your fund, we would know about it.
In the vast majority of cases we are remunerated for future reviews via the annual management charge levied by the fund providers, so it comes at no extra cost to the client.
So give us a call for an unbiased evaluation of your portfolio and: -
- Balance your asset allocation
- Ensure your diversification and risk levels for your investments are in line with your expectations.
So what next?
The only thing left for you to do is pick up the phone and call Templegate on 0845 833 8837 or, email
info@templegatefinancial.co.uk or, complete our enquiry form.
Templegate Financial Planning Ltd is an appointed representative of Sage Financial Services Ltd, which is authorised and regulated by the Financial Services Authority. Sage Financial Services is entered on the FSA register (www.fsa.gov.uk/register) under reference 150452. The FSA do not regulate will writing services or some forms of mortgages and inheritance tax planning. The information and content of this website is intended for UK consumers only and is subject to the UK regulatory regime. Templegate Financial Planning Ltd. Registered Office: Winton House, Winton Square, Basingstoke, Hampshire, RG21 8EN Registered in England No. 04416499.