Investments

Every investor needs at least some part of their portfolio in liquid investments in case of emergency, but low risk usually leads to lower returns. For anyone with longer term investment plans you need to have a well-diversified portfolio investing in other asset classes that offer better capital growth potential and beat the perils of inflation.

Our role when providing you with advice on future investment is to get to know you and your attitude to risk versus reward. Once we have established this, we will then be able to formulate a plan and consider all the investment options.

Our aim is to build a long- term relationship that will include regular reviews of the decisions that have been made, considering any changes in your circumstances and to ensure that we help you stay focused on your long- term objectives, without being distracted by short term market changes.

We will also review the tax efficiency of your portfolio and keep you up to date with new investment opportunities as they arise.<>

Types of Investment

Individual Savings Account (ISA)

Investing into and ISA is a tax efficient way of investing your money as all the gains are free of tax. There is a limit on the amount that you can invest each tax year, but there is no minimum period of investment.

You can only open one cash ISA and one stocks and shares ISA each tax year and you can choose to invest in the following way;

  • £20,000 to a Cash ISA and nothing into a stocks and shares ISA
  • £20,000 to a stocks and shares ISA and nothing into a cash ISA
  • A combination between Cash and stocks and shares ISA up to the annual limit

Please note that investing in a cash ISA provides capital security, but investing in a stocks and shares ISA exposes your capital to the risks that are normally associated equities and the value of your investment could fall as well as rise.

Withdrawals from an ISA can be made at any time without loss of tax relief but it is only possible to hold one ISA per tax year, so if an ISA is closed within the same tax year that it was opened, another one cannot be started until the next tax year.

ISAs can be transferred from one provider to another, as long as the new provider accepts transfers. This is often done with a cash ISA after it has been held for a year as previously attractive interest rates drop dramatically when short-term bonuses and fixed terms come to an end. The transfer is initiated through the new, receiving provider who will require you to supply details of the original account and will manage the whole transfer process. Transfers should not be done manually by withdrawing the investment, closing the account, and re-investing it in the new account, as this removes the tax-free interest status of your investment.

The current year's allowance is unaffected by anything transferred from previous years so you can transfer previous investment to a new ISA and open a second ISA for new contributions if you wish, as long as you don't contribute to both.

INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS. ANY LEVELS AND BASES OF, AND RELIEFS FROM TAXATION, ARE SUBJECT TO CHANGE.

THE VALUE OF INVESTMENTS AND THE INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED.

Investment Bonds

Capital Investment bonds are set up through Insurance companies and are designed to give capital growth and/or income over the medium to long term.

You have access to your money by taking regular or one off withdrawals, but bonds are designed for investment over at least five years. If you cash in your investment before that time, you are likely to be charged an early-surrender penalty.

It is possible to invest into an offshore bond to take advantage of tax concessions, but this will depend upon your personal circumstances.

INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS. ANY LEVELS AND BASES OF, AND RELIEFS FROM TAXATION, ARE SUBJECT TO CHANGE.

THE VALUE OF INVESTMENTS AND THE INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED.

Collective Investments

Collective investments are also known as unit trusts, investment trusts and OEICs. In all cases an individual is able to invest in a basket of shares of different companies, that way spreading his or her equity investment risk.

With a collective investment your money is pooled, along with that of other investors, to create a large capital sum. Professional fund managers then use this capital sum to build up a large actively managed portfolio of investments. This approach enables you, indirectly, to hold a wide range of stocks and shares in a way which would not be practical for an individual investor, whilst minimising the effects on your capital of fluctuations in individual share values.

Collectives can also invest in fixed interest instruments. These include UK government stock, also known as gilt edged stock or "gilts" for short. Corporate bonds are also fixed interest instruments and both represent direct borrowing on the part of the issuer of the bonds. They are referred to as "fixed interest" because their cost of borrowing is fixed, while the price of the bonds themselves may float up or down depending on supply and demand.

Traditionally, fixed interest investments have been regarded as a safe option. However it is important to remember that not only do they fluctuate in price, but also that the investor risks that the issuer may not be able to pay the interest (coupon) on the bonds, or the principal when the bonds mature.

With a collective investment you have access to expert full time investment management, reducing the risk and complexities of direct investment into equities. Your money becomes part of a much larger investment portfolio with much larger individual investments, as well as more individual holdings.

INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS. ANY LEVELS AND BASES OF, AND RELIEFS FROM TAXATION, ARE SUBJECT TO CHANGE.

THE VALUE OF INVESTMENTS AND THE INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED.

National Savings and Investment (NS&I)

The least risky of investment options are those offered by National Savings, which raises money on behalf of the UK Government.

While investment returns are not spectacular and some involve tying your money up for long periods of time they are nevertheless stable and in some cases can be paid tax free or paid without deduction of tax (although taxable), which is beneficial if you are a non taxpayer.

They include National Savings Bank accounts and various forms of savings, premium bonds and Income Bonds. These savings and investment products are backed by H.M. Treasury, which makes them the most secure cash products available in the UK.

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