The information on this page is generic and for information only and does not
Part of your financial planning aims and objectives may include investment of
capital for growth, income or inheritance tax mitigation.
As well as a wealth of knowledge, we have research tools at our disposal to
compare investment products from the whole of the market to find one that best
suits your needs. Our advice process will include establishing your attitude to
risk and your capacity for loss, ensuring that any advice given to you is
suitable for your risk profile.
There are a vast array of investment products available to the
small investor and which one is suitable for your needs will be established
following an in-depth discussion with one of our Independent Financial Advisers.
Some of the more common types of investment vehicles include:
Individual Savings Accounts (ISAs)
The annual ISA allowance will in most cases be the first port of call for an
individual's investment objectives because of the tax-free status on growth.
There is no Capital Gains Tax (CGT) to pay when switching funds or making full
or partial surrenders. However, ISAs may not a suitable investment if your
priority is Inheritance Tax Planning. They are a single life plan available to
those aged over 18 only.
Previously there were several ISA options, Mini and Maxi ISA offering
combinations of cash and stocks & shares investments etc. There are now just two
options; Cash ISA or Stocks & Shares ISA. The name of the Stocks & Shares ISA
can be somewhat misleading, indicating that you must invest in stocks and shares
which is not accurate at all.
A Stocks & Shares ISA allows you to invest in a large choice of different funds
in different asset classes, not just stocks and shares. Stocks and shares, or
equities as they are also known, are generally viewed as a high risk investment
if investing for the short term but have proven performance over the long term.
Past performance should not be used as a guide to future performance. The other
funds available in a Stocks & Shares ISA make it a suitable consideration for
the more cautious investor also, you can even invest in cash funds within a
Stocks & Shares ISA for instance.
Open Ended Investment Companies (OEICs)
OEICs are not as tax efficient as ISAs, but there are alternative benefits.
Everyone has a CGT allowance and when surrendering or taking regular
withdrawals, as long as any gains made from inception do not exceed the CGT
limits, there will be no additional tax liability. Unlike ISAs or PEPs switching
funds will trigger a potential CGT liability.
Unit Trusts, like OEICs, are open ended companies that can expand and contract
according to market conditions. OEICs have a single pricing system, in other
words, the buy and sell price are the same. Unit Trusts have a dual pricing
system known as the bid–offer spread, meaning there is a difference between the
unit price you buy and the unit price you sell at.
OEICs and Unit Trusts cannot be covered by trusts making them unsuitable if your
priority is Inheritance Tax Planning (IHT).
Investment bonds are lump sum collective investment vehicles and can be
tailored to provide an income or growth depending on a client’s circumstances.
In order to entice investors into investing money with them many providers often
offer an "enhanced allocation" to the initial invested amount which can help
provide a healthy start for the investment. They are also a useful product for
people wishing to invest as part of their Inheritance Tax Planning aims and
Self Invested Personal Pensions (SIPPs) have become a popular way to manage
your financial affairs in preparation for, and during, retirement. Investors now
expect the flexibility available to them in their collective investments to be
available in their pension plans also. SIPPs offer that flexibility. The general
consensus is that they are usually only suitable for clients with a minimum
retirement fund of approximately £100,000.
Investment of capital sums for medium to long term
growth is not a decision that clients take lightly. As well as a robust
and structured approach to getting to know our clients prior to conducting
any business, we also pride ourselves on providing an ongoing service and
regularly reviewing our clients' investment portfolios.
Several of our clients have come to us as a direct result of not having
received any service from their previous Financial Advisers for several
years after a product was recommended and sold to them. At Prism we have
systems and controls in place which aim to ensure this never happens with
our clients. So if you have investments that have not been reviewed for
some time, now may be an opportune time to give us a call. This may
be especially important if you are nearing retirement when consider how
many people nearing retirement have suffered large drops in the values of
their investment and pension funds in recent times.