INVESTOR PORTFOLIO SERVICE (IPS) GUIDE TO FACILITATED ADVISER CHARGES.

Transcription

1 INVESTOR PORTFOLIO SERVICE (IPS) GUIDE TO FACILITATED ADVISER CHARGES. This is an important document. Please keep it safe for future reference.

2 INVESTOR PORTFOLIO SERVICE (IPS) GUIDE TO FACILITATED ADVISER CHARGES 2 CONTENTS 1. WHAT ARE FACILITATED ADVISER CHARGES? 2. WHAT TYPES OF ADVISER CHARGES DO YOU FACILITATE? 3. HOW CAN I ADD MONEY TO MY IPS CASH ACCOUNT? 4. WHEN ARE ADVISER CHARGES TAKEN FROM MY IPS CASH ACCOUNT? WHAT HAPPENS IF I CHANGE MY MIND ABOUT ADVISER CHARGES? 7 6. WHAT HAPPENS IF I SELL SOME OF MY INVESTMENTS? 8 7. WHAT HAPPENS IF I SELL ALL OF MY INVESTMENTS? 8 8. WHAT HAPPENS IF I ADD MONEY TO MY INVESTMENT? 8 9. HOW DO I KNOW HOW MUCH I VE AGREED TO PAY MY ADVISER S FIRM? 10. WHAT HAPPENS IF I CHANGE MY ADVISER? WHAT HAPPENS TO ADVISER CHARGES IF I DIE? CHANGING THE TERMS OF ADVISER CHARGES CONTACTING US GLOSSARY 9 10

3 INVESTOR PORTFOLIO SERVICE (IPS) GUIDE TO FACILITATED ADVISER CHARGES 3 USING THIS DOCUMENT. PURPOSE OF THIS GUIDE This guide gives you details of how facilitated Adviser Charges work before you invest, and throughout the lifetime of your investments. It s an important document to refer to. You should keep this guide safe, as you ll need to refer to it if you want to make any changes to facilitated Adviser Charges in future. Please also read the Adviser Charges section of the Terms and Conditions. These form the basis of our agreement with you. TO HELP YOUR UNDERSTANDING Throughout this guide we refer to you, we and us. You means the owner of the investment and we and us means Cofunds. FIND OUT MORE At some points we ve included clear signposts (using the symbol shown alongside) that direct you to more detailed information in this or other documents. Keep an eye out for these. If you d like to see the other documents, please ask us, or your adviser. IF YOU RE UNSURE, PLEASE ASK. If anything is unclear or you require further information, we or your adviser will be happy to help. Our contact details are on page 9.

4 INVESTOR PORTFOLIO SERVICE (IPS) GUIDE TO FACILITATED ADVISER CHARGES 4 1. WHAT ARE FACILITATED ADVISER CHARGES? You ll agree with your adviser how to pay for their services before you invest. We offer you a way of paying your Adviser Charges called facilitated Adviser Charges. You can ask us to facilitate payment of your Adviser Charges from the money you give us before you invest, from an ISA transfer, or from money already in your IPS Cash Account. 2. WHAT TYPES OF ADVISER CHARGES DO YOU FACILITATE? We currently facilitate payment of: An initial Adviser Charge for advice that leads to you making an investment or an additional investment. An ongoing Adviser Charge for any ongoing investment advice about the assets you hold. A one-off Adviser Charge for any advice that is not related to you buying your investment and is separate from any ongoing advice and related services. We ll make any payments to your adviser s firm from your IPS Cash Account based upon the instructions you give us. The IPS Cash Account is used, for Portfolio Investments only, to hold money while it s not invested in a fund. Please see the IPS Cash Account section of Investing with IPS for more information. Initial Adviser Charge An initial Adviser Charge relates to the Adviser Charge payable by you for advice that leads to you making an investment or an additional investment. You ll agree an amount with your adviser that we ll deduct from the total amount of money you give to us, or from your ISA transfer. This amount will be paid into your IPS Cash Account and we ll invest the rest for you. The amount we deduct to pay the initial Adviser Charge will be paid to your adviser s firm from your IPS Cash Account. When we ve made this deduction we re then responsible for paying the amount deducted to your adviser s firm. If you are an existing customer and already have an IPS Cash Account, you can agree with your adviser to pay your initial Adviser Charge from this. If you re using your ISA money (for example from an ISA transfer) to pay for the initial Adviser Charge, you ll permanently lose the ISA tax benefits on the money used to pay the charge. There are different ways of adding money to your IPS Cash Account. We tell you about these in section 3. FOR EXAMPLE You provide us with 10,000 and you agree with your adviser to pay 3.5% of this amount as an initial Adviser Charge. 3.5% of 10,000 = 350 will be placed in your IPS Cash Account until it s paid to your adviser s firm. We ll invest the 9,650 for you.

5 INVESTOR PORTFOLIO SERVICE (IPS) GUIDE TO FACILITATED ADVISER CHARGES 5 Ongoing Adviser Charge An ongoing Adviser Charge relates to the Adviser Charge payable by you for any ongoing advice or related services. You ll agree with your adviser what percentage of your total investment s value is to be paid each year as an ongoing Adviser Charge. We ll facilitate this payment from your IPS Cash Account and pay it monthly in arrears to your adviser s firm. When we ve made this deduction we re then responsible for paying the amount deducted to your adviser s firm. As the value of your investments can change, the amount of your ongoing Adviser Charge can go up or down over time. We ll continue facilitating the payment of an agreed ongoing Adviser Charge until you specifically ask us to stop or change it, or until there isn t enough money left in your IPS Cash Account or investments to pay the charge. There are different ways of adding money to your IPS Cash Account to pay for any ongoing Adviser Charges. We tell you about these in section 3. FOR EXAMPLE You agree to pay your adviser 0.5% of your investment s value each year. We ll deduct one twelfth of 0.5% each month of your investment s value and pay this to your adviser s firm. If your investment is worth 24,000 when the charge is calculated, we ll deduct 10 from your investment and pay this to your adviser s firm for that month. One-off Adviser Charge A one-off Adviser Charge relates to the Adviser Charge payable by you for any advice that is not related to you buying your investment and is separate from any ongoing advice and related services. You can agree this type of charge at any time. We ll then facilitate the payment of this from your IPS Cash Account to your adviser s firm based on the instructions you give us. When we ve made this deduction we re then responsible for paying the amount deducted to your adviser s firm. There are different ways of adding money to your IPS Cash Account to pay for any one-off Adviser Charge. We tell you about these in section HOW CAN I ADD MONEY TO MY IPS CASH ACCOUNT? You need to ensure that your IPS Cash Account has enough money in it to meet any payments you ve agreed with your adviser, as well as any other payments or withdrawals you wish to make (for example your Platform Fees). If your IPS Cash Account has insufficient money in it to meet these payments your adviser will not receive the Adviser Charges you ve agreed to pay. There are different ways that you can add money to your IPS Cash Account to pay these charges: By sending us a cheque; By bank transfer from your Nominated Bank Account; or By using part of the income received from your investments held on IPS.

6 INVESTOR PORTFOLIO SERVICE (IPS) GUIDE TO FACILITATED ADVISER CHARGES 6 Sale for Regular Payment Alternatively, you can choose to set up a Sale for Regular Payment instruction when you complete your application form. By doing so you authorise us to sell units from your investment when you have insufficient money in your IPS Cash Account to pay any Adviser Charges due. The proceeds will be paid into your IPS Cash Account. Jointly held unit trust/oeic We ll sell units from the largest holding in your joint unit trust/oeic to pay for the charges and fees relating only to that investment. Units cannot be sold from any solely held investments to pay for charges and fees due on your joint unit trust/ OEIC. Solely held unit trust/oeic and/or ISA If you only hold a unit trust/oeic we ll sell units from the largest holding in your unit trust/oeic. If you only hold an ISA we ll sell units from the largest holding in your ISA. If you hold a unit trust/oeic and an ISA we ll sell units from the largest holding in your unit trust/oeic unless you instruct us otherwise. If there is insufficient money left in your unit trust/oeic, we ll then sell units from the largest holding in your ISA. Units cannot be sold from any jointly held investments to pay for charges and fees due on your solely held unit trust/oeic and/or ISA. We ll sell 10% more than the required amount from your investments to cover any further shortfall that may result from market movements between the date of the calculation and the date of the sale. The minimum value of the sale will be If you want to set up, change or cancel a Sale for Regular Payment instruction, please speak to your adviser or contact us. If your units are regularly sold to meet initial, ongoing or one-off Adviser Charge payments, your capital will be reduced. This will reduce the amount of capital available to benefit from the growth potential of the fund and so will impact the amount of money you may get back. You ll permanently lose the ISA tax benefits on any ISA units sold. You should check with your adviser whether the Sale for Regular Payment service is appropriate for you. Any gains on the units sold from your unit trust or OEIC, outside an ISA, will count towards your Capital Gains Tax (CGT) allowance. You should disclose this along with any other CGT disclosure you make to HM Revenue & Customs. The IPS Platform Fee is also paid from your IPS Cash Account see the IPS Platform Fee section of Investing with IPS for more information. When there is insufficient money in your IPS Cash Account we ll automatically sell units from your investment to pay for the IPS Platform Fee. While we don t need a Sale for Regular Payment instruction for us to take the IPS Platform Fee, if you set one up for your Adviser Charges we ll apply those preferences. 4. WHEN ARE ADVISER CHARGES TAKEN FROM MY IPS CASH ACCOUNT? We calculate ongoing monthly Adviser Charges from the first of the month and pay them to your adviser s firm a month in arrears. On, or shortly after, the fifth business day of the month, we ll calculate the ongoing charge for the last month and calculate whether you have enough money in your IPS Cash Account to pay it. It s important that you have enough money in your IPS Cash Account at this time to prevent a Sale for Regular Payment. On, or shortly after, the ninth business day of the month, any Sale for Regular Payment takes place from your investments if there is insufficient money in your IPS Cash Account to cover the Adviser Charges due. Three business days before the last Thursday of the month, we ll check again whether there is enough money in your IPS Cash Account to pay the Adviser Charges due. If there is enough money, the Adviser Charges will be deducted from here on the next business day. If there isn t enough money, the Adviser Charges will carry forward to the next month and will only be paid once there is enough money in your IPS Cash Account.

7 INVESTOR PORTFOLIO SERVICE (IPS) GUIDE TO FACILITATED ADVISER CHARGES 7 5. WHAT HAPPENS IF I CHANGE MY MIND ABOUT ADVISER CHARGES? Once we ve set up and paid any Adviser Charges, we can t cancel any payments unless you cancel your investment during the cancellation rights period. Please see the Changing your mind section of Investing with IPS. If you decide to cancel within the cancellation period, we ll refund any initial and ongoing Adviser Charges that we ve deducted, along with the cancellation value of your investment. If you exercise your cancellation rights on a lump sum during the cancellation period, we ll refund any Adviser Charges paid that apply to the lump sum, along with the lump sum investment amount. If you exercise your cancellation rights on a monthly payment during the cancellation period, we ll refund any Adviser Charges paid that apply to the monthly payment instruction. We also refund the monthly investment amount if a payment has been taken. Amending your ongoing Adviser Charges You can amend your ongoing Adviser Charge at any time by contacting us or speaking to your adviser. Please write to us at the address shown in the Contacting us section on page 9. You can t amend a one-off or initial Adviser Charge. We can act on your instructions alone. We don t need the agreement of your adviser although we ll let your adviser know if you make any changes to an ongoing Adviser Charge. We won t act on any instructions from your adviser without your agreement unless they ask us to reduce an ongoing Adviser Charge. To start a new ongoing Adviser Charge, or increase an existing ongoing Adviser Charge, all joint account holders need to sign and date an instruction before we can accept it. We ll continue to take your ongoing Adviser Charge as it is for the month in which we receive your instruction. The changes you ve asked for will come into effect from the next month. Stopping your ongoing Adviser Charges You can stop your ongoing Adviser Charges at any time by contacting us or speaking to your adviser (who will then stop them on your behalf). Our contact details are shown in the Contacting us section on page 9. You can t stop a one-off or initial Adviser Charge unless you cancel a transaction with cancellation rights. We can act on your instructions alone. We don t need the agreement of your adviser although we ll let your adviser know if you stop an ongoing Adviser Charge. To stop an existing ongoing Adviser Charge at least one account holder must sign and date an instruction before we can accept it. We ll take the full monthly charge for the month in which you cancel and this will be paid to your adviser the following month. If you cancel your investment, reduce or stop your Adviser Charges you ll need to check your agreement with your adviser to see if you have any further Adviser Charges to pay.

8 LEGAL INVESTOR & GENERAL PORTFOLIO SELECT PORTFOLIO SERVICE (IPS) BOND GUIDE FACILITATED TO FACILITATED ADVISER ADVISER CHARGES CHARGES GUIDE 8 6. WHAT HAPPENS IF I SELL SOME OF MY INVESTMENTS? We ll continue to pay the ongoing Adviser Charge at the same agreed percentage of your investment s value. 7. WHAT HAPPENS IF I SELL ALL OF MY INVESTMENTS? We ll stop facilitating the payment of any ongoing Adviser Charges. You ll need to check your agreement with your adviser to see if you have any further Adviser Charges to pay. 8. WHAT HAPPENS IF I ADD MONEY TO MY INVESTMENT? It s up to you and your adviser to agree whether any initial Adviser Charges apply to new money that you invest. Any ongoing Adviser Charges you ve agreed will continue and be applied to money you add to your investment unless you send us a new instruction. 9. HOW DO I KNOW HOW MUCH I VE AGREED TO PAY MY ADVISER S FIRM? We ll send you a confirmation when you request an initial or one-off Adviser Charge to be paid to your adviser s firm or request that an ongoing Adviser Charge and Sale for Regular Payment are set up. We ll send you a half-yearly consolidated confirmation note and an annual statement that will include details of any Adviser Charges you ve agreed to pay. 10. WHAT HAPPENS IF I CHANGE MY ADVISER? We ll continue facilitating payment of any Adviser Charges until you tell us to do otherwise. You can tell us to set up an Adviser Charge to pay your new adviser s firm. If you do this, we ll stop any Adviser Charges due to your existing adviser and contact them to let them know. You ll need to check your agreement with your adviser to see if you have any further Adviser Charges to pay. For more information on how you can change your adviser and what happens to any Adviser Charges if you do, please contact us or speak to your adviser. Our contact details are on page WHAT HAPPENS TO ADVISER CHARGES IF I DIE? For single holdings we ll stop the facilitation of any ongoing Adviser Charges when we re notified of your death. For joint holdings, the investment continues in the name of the survivor(s) and we ll continue to facilitate payment of any ongoing Adviser Charges. 12. CHANGING THE TERMS OF ADVISER CHARGES We may make changes to the terms of Adviser Charges that apply to your investment as a result of actions taken by, or circumstances that apply to your adviser. We ll only make changes for good reasons that include the following: Your adviser ceases to be an authorised or exempted person under the Financial Services and Markets Act Your adviser ceases to have the appropriate and relevant permissions from the Financial Conduct Authority (or subsequent regulatory bodies) to carry on the business. Your adviser dies or becomes insolvent. Your adviser is no longer providing you with advice or advice-related services. If we or your adviser end the agreement between them and us that allows your adviser to carry out business with us. We believe your adviser is acting in breach of regulatory requirements or in a fraudulent manner.

9 INVESTOR PORTFOLIO SERVICE (IPS) GUIDE TO FACILITATED ADVISER CHARGES CONTACTING US Your adviser will normally be able to help you with any questions you have about your investment or Adviser Charges that are not answered in this guide, the Investing with IPS brochure or the Terms and Conditions. However, if you wish to ask us anything, please do. You can contact us in any of the following ways: CALL US You can call our Customer Services on: am to 5.30pm, Monday to Friday for general information on our range of funds or for questions about your Portfolio Investments. Call charges will vary. We may record and monitor calls. This number may not be available outside the UK. WRITE TO US You can write to us with certain instructions on your Portfolio Investments, if you re changing any personal details, if you have any questions or you have a complaint: Investor Portfolio Service PO Box 1112 Chelmsford CM99 2UX

10 LEGAL INVESTOR & GENERAL PORTFOLIO SELECT PORTFOLIO SERVICE (IPS) BOND GUIDE FACILITATED TO FACILITATED ADVISER ADVISER CHARGES CHARGES GUIDE 10 GLOSSARY. Adviser Charge The amount you agree to pay your adviser for their services. Please note that your adviser may have a different name for this, such as a fee or service charge. Assets Underlying investments bought by the fund. These can include investments such as property, company shares, bonds and derivatives. Business day Any day from Monday to Friday inclusive (when the London Stock Exchange is open for business), excluding English public holidays. Capital Gains Tax A tax that may be payable on any profit you make when selling an asset or investment. Confirmation note Consolidated confirmation note Confirms the details of transactions, withdrawals or switches or an investment from one fund into another. Confirms the details of transactions in the six months following an annual statement (mainly for customers making monthly investments). Facilitated adviser charge A way of paying your Adviser Charges. You can ask us to facilitate payment of your Adviser Charges from the money you give us before you invest, from an ISA transfer, or from money already in your IPS Cash Account. Fund A unit trust or OEIC investment managed by a fund manager. Each fund has a different investment aim and style. HMRC HM Revenue & Customs (UK tax authority). ISA Individual Savings Account a tax efficient way of holding Portfolio Investments. OEIC Sale for Regular Payment Unit Open-Ended Investment Company a type of collective investment, when an investor buys shares in a fund or sub-fund. A way of selling units from your investment to raise the money required to pay for your Adviser Charges from your IPS Cash Account. The units in a unit trust or the shares of an OEIC.

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