Key Features Document. Portfolio Stocks & Shares ISA Account

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1 Key Features Document Portfolio Stocks & Shares ISA Account Simply Ethical Financial Services Ltd The Station Masters House 168 Thornbury Road, Isleworth, Middlesex TW7 4QE Telephone: Website: Simply Ethical Financial Services Ltd is authorised and regulated by the Financial Conduct Authority 1

2 The Financial Conduct Authority is the independent financial services regulator. It asks us to give you this important information to help you to decide if our services are right for you. Please read this document carefully so that you understand what you are buying and keep it safe for future reference. To keep this document short we have not outlined every feature so please also read the Self Select Service Terms and Conditions before investing. If you have any questions, or there is anything you do not understand, please contact us. Its Aims The Portfolio Stocks & Shares ISA Account is suitable for those comfortable selecting their own risk profile and portfolio without the provision of advice or need for active investment portfolio management. This account allows you to invest tax efficiently. The aims of each unit trust and OEIC are shown in the fund specific key features on our website and the trading platform. You should only invest if you are comfortable with the specific risks detailed in the key features or simplified prospectus / KIID. Your commitment The minimum investment to open an account is 2,500 or 1,000 plus 100 per month. You should view this as a medium to long-term investment, and should plan to keep it for at least five years. There is no minimum length of investment. You can sell your investment at any time, but please remember that stock market investments are designed for the long term and are not suitable for money needed at short notice. Risks The value of your investment and the income from it can go up and down so you may get back less than you invest. Past performance is not necessarily a guide to future returns. What you receive when you sell your investment is not guaranteed; it depends on how your investments perform. Inflation will reduce the real value and therefore what you could buy with your investments in future. Governments can change the way ISAs and investments are taxed. If you are transferring your account to us from another provider, as per our Self Select Service Terms and Conditions, we only allow cash transfers. This means your investment could be out of the market for a number of days, during which time the market may move up or down, resulting in a potential loss of growth and income. Your existing provider may also charge you for transferring. 2

3 A more detailed overview of the types of risks associated with particular investments is set out in Self Select Service Terms and Conditions, which is available on our website. Moreover, the risks of each fund are different. The risks of each unit trust and OEIC are shown in the fund specific key features on our website and the trading platform. You should only invest if you are comfortable with the specific risks detailed in the key features or simplified prospectus / KIID. Your Questions Answered What is an Individual Savings Account (ISA)? Individual Savings Account (ISA) is a tax free savings vehicle, which means that the money you put in will grow tax free (with the exception of tax credits on dividends). Your returns will be completely free of income or capital gains tax and do not need to be declared on your tax return. ISAs are available to people who are resident in the UK for tax purposes. What is Portfolio Stocks & Shares ISA Account? Portfolio Stocks & Shares ISA Account is suitable for those comfortable selecting their own risk profile and portfolio without the provision of advice or need for active investment portfolio management. This account allows you to invest tax efficiently. The account provides an option to choose from three ready-made portfolios consisting of investment funds, each of which reflects a different risk category. These portfolios are rebalanced biannually. Who is the ISA Manager? The ISA Manager is James Brearley & Sons, of PO Box 34, Walpole House, Unit 2, Burton Road, Blackpool, FY4 4WX. James Brearley & Sons is a Member of the London Stock Exchange, Authorised and Regulated by the Financial Conduct Authority and a Member of the Wealth Management Association. Who can open Portfolio Stocks & Shares ISA Account? Anyone over the age of 18 or who will be 18 during the tax year in which the ISA is opened, but only after their 18th birthday. You must also be UK resident for tax purposes. You can't open an account together with someone else, or on behalf of someone else. How much can you put into an ISA? You are able to invest up to 20,000 in a Stocks & Shares ISA or, if you have subscribed elsewhere to another type of ISA in the current tax year, you may subscribe the balance in a Stocks & Shares ISA. In subsequent years the allowance may alter. You can withdraw cash from your Stocks and Shares ISA and replace it in part or in full without the replacement counting towards the annual ISA subscription limit providing the replacement is made into the same account and in the same tax year as the withdrawal. You may transfer some or all of your money from another type of ISA, without affecting your current tax year limit. Remember, tax depends on your individual circumstances and may change in the future. 3

4 What investment options are available? You can choose from three different portfolios consisting of investment funds, each of which reflects a different risk category. The risk categories and portfolios available are as follows: Low to medium risk - Cautious portfolio Medium risk - Balanced portfolio Medium to high risk - Growth Portfolio The description of each risk category, the composition of portfolios for each risk category and information on each constituent fund is accessible on Simply Ethical website. Choosing a portfolio constitutes an instruction to us to buy each fund comprising the portfolio in accordance with stated allocation weightings. You cannot change the fund holdings, their respective proportions, remove existing funds or add new funds in the portfolio. If you do not agree with the exact portfolio composition or you wish to make changes, then Self Select Portfolio service is not suitable for you. How often is the portfolio rebalanced? We rebalance your portfolio by placing instructions with the Service Provider to invest, dispose of and re-invest cash in the constituent funds of your portfolio. We will rebalance your portfolio biannually on 12th day of January and July (or the first available Business Day after the 12th where such date does not fall on a Business Day). Rebalancing will return each of the fund holdings within the portfolio to the original allocation weightings. What are the tax benefits of investing in Stocks & Shares ISA? Broadly, the tax advantages are as follows: You don't have to pay any capital gains tax on profits made from share price increases. Invest outside an ISA and any profits made above the annual capital gains tax allowance ( 11,700 for 2018/19) would be subject to tax at 10% for basic rate taxpayers and 20% for higher rate and additional rate taxpayers. You make a profit when you sell a share for more than you bought it for. You don t have to pay any tax on dividends paid within ISA account. After using the dividend allowance, which is currently 2,000 (2018/19) the basic, higher and additional rate taxpayers have to pay tax at 7.5%, 32.5% and 38.1% respectively. You do not have to include any information about your ISAs in your tax return. You cannot use any losses in your ISA to set off against any gains elsewhere. What are the charges? There is no set up cost. The annual administration charge is tiered within bands as follows: 0.85% per annum for the first 100,000; 0.50% per annum between 100,000 and 500,000; and 0.30% per annum above 500,000. 4

5 This charge is subject to a minimum of per quarter. This charge is calculated daily, based upon the value of your investments and charged to the account at quarterly intervals on 31st March, 30th June, 30th September and 31st December each year. Please read our Charges Schedule for complete details. This is accessible through our website or by contacting us. How do you deal with the cash I hold within Portfolio Stocks & Shares ISA Account? Any cash within your account is held on deposit in a Sharia compliant bank account. No interest is paid on cash. What is the difference between Cash ISA and Stocks & Shares ISA? Cash ISA is just like a basic savings account where you get a return based on an interest rate. With cash ISA no tax is taken from the interest you earn, meaning you can earn more from your savings. A stocks and shares ISA is a tax efficient investment where money buys bonds or shares in companies on the stock market. The aim of the investment is to grow your money using the potential growth opportunities, but there are no guarantees because the value can go down as well as up and the past performance of the investment is not a reliable guide to future. Choosing the right ISA for you depends very much on your approach to risk. If you want a low risk account, Cash ISAs could be for you. But if you want the opportunity to earn a higher return, you may want to consider Stocks and Shares ISA. Can I have different ISAs? You are limited on how many ISAs you can subscribe to in each tax year. You can only put money into one Cash ISA and/or one Stocks and Shares ISA and/or one Lifetime ISA and/or one Innovative Finance ISA and you must make sure you don't exceed the total ISA allowance for the tax year. The current tax year s (2018/19) annual ISA allowance is 20,000. Can I transfer ISAs held with other providers to Portfolio Stocks & Shares ISA Account? You can transfer: Your current year ISA subscriptions and/or All or part of ISA subscriptions made in previous tax years If your ISA contains current year subscriptions only, the entire account must be transferred. Alternatively, you could, for example, transfer your savings from the year before to the Portfolio Stocks & Shares ISA Account and leave your current tax year savings where they are. How do I transfer my existing Stocks & Shares ISA to Simply Ethical? To transfer your existing account, please complete our online account opening application and the transfer form. We only accept transfer in the form of cash. 5

6 Cash transfer means that your current investments will be sold and the cash transferred to your ISA for you to buy investments of your choice (subject, of course, to the ISA eligibility rules and the investments being available on our platform and satisfying our ethical investment criteria). Please be aware that a cash transfer means: You may lose out on investment growth while your investment is not invested during the transfer period. You may incur charges when you purchase new investments to be held within your account with us. You will not have access to your ISA until such time as the transfer is complete. Can I transfer my Portfolio Stocks & Shares ISA Account to another ISA provider? Yes, we will require a completed transfer authority form from your new ISA provider. We can make the transfer by cash or we can transfer your investment holdings direct to your provider without selling them. However, the way in which we transfer will be determined by your new ISA provider s terms and conditions. Note that there may be transfer out charges. Please read our Charges Schedule for complete details. This is accessible through our website or by contacting us. How do I make withdrawals? To withdraw money from your account, you are required to complete the relevant form available on Simply Ethical website. We will only place withdrawal instructions on the 8 th day of each month (or the first available Business Day after the 8 th where such date does not fall on a Business Day). Your money should be available in your nominated account within 4 working days of this date. Please note we need to be in receipt of relevant form by the 5 th of each month to process the payments in the same month. Any withdrawal request constitutes an instruction to us to sell each fund held within your portfolio by the same proportion to the extent required to provide you with the cash sum requested. We will not have any discretion as to which funds within the portfolio are sold. What happens to my ISA if I die? When you die your spouse or civil partner can inherit your ISA savings and keep them with a tax-free status. The value of your ISA(s) will be calculated from the day you die. Your spouse or civil partner can apply to inherit your savings in the form of an allowance, which is also called an Additional Permitted Subscription or APS allowance. Your spouse or civil partner s own individual ISA allowance ( 20,000 for 2018/19 tax year) will be unaffected. You don t have to leave your spouse or civil partner your money in your will for them to benefit from the APS allowance. Instead, you could leave the savings you have built up to someone else in your will, for example, one of your children, and your spouse or civil partner will still be able to apply for APS allowance. Their APS allowance would be up to the value of your ISA, although your spouse or civil partner would need to use their own money to save into it. The APS allowance is only allowed for death on or after 3 December What might I get back? The amount you get back is not guaranteed and depends on a number of factors, such as: 6

7 How much you invested The length of time you invested for The performance of the investments you have chosen How much our charges are The amount of any withdrawals you have taken Can I change my mind after I have subscribed to Portfolio Stocks & Shares ISA Account? Yes. After we have opened your account we will confirm this in writing. You will then have 14 calendar days starting from the day you receive this to change your mind and cancel your account. If you decide to cancel, you should write to us at our registered address. Once we have received your notification, we will give you your money back less any other payments, charges and fees in accordance with the Self Select Service Terms and Conditions. If your investments have fallen in value, you will get back less than you invested. If you do not cancel your account it will continue in force in accordance with the Self Select Service Terms and Conditions. Can I change my mind after I have requested a transfer of ISA to Simply Ethical? The 14 day period also applies to ISA transfer requests, so provided you cancel within the 14 day period, you can either: Transfer your ISA back to the original ISA provider, who is not obliged to accept the transfer back, or Transfer your ISA to another ISA provider, or Close your ISA and have the investments and/or proceeds returned to you If you do not cancel your transfer request, it will continue in force in accordance with our Self Select Service Terms and Conditions. More Information What if I have a compliant? All formal complaints should be sent in writing to info@simplyethical.com or addressed to the Compliance Officer at: Simply Ethical Financial Services Ltd The Station Masters House 168 Thornbury Road Isleworth, Middlesex TW7 4QE United Kingdom We will aim to resolve your complaint as quickly and effectively as possible in accordance with our internal complaints procedure. 7

8 If you are not happy with our response you can also complain to the Financial Ombudsman Service. The Financial Ombudsman Service, Exchange Tower London E14 9SR Contact: Compensation Arrangements We are covered by the Financial Services Compensation Scheme. You may be entitled to compensation from the scheme if we cannot meet our obligations. This depends on the type of business and the circumstances of the claim. Most types of investment business are covered and the compensation limit for investments is 50,000 per person per firm (for deposits the limit is 85,000 per person per firm for claims against firms in default from 30 January 2017). Further information about compensation arrangements is available from the Financial Services Compensation Scheme website, at Terms and Conditions This KFD provides a summary of the account. It does not include all the definitions, exclusions, and terms and conditions. These are shown in our Self Select Service Terms and Conditions. If you would like a copy of the Self Select Service Terms and Conditions please visit our website or contact us. In the event of any conflict between the Self Select Service Terms and Conditions and the KFD, the Self Select Service Terms and Conditions prevails. 8