Key Features of the Succession Investment Platform Stocks and Shares Junior ISA

Transcription

1 Key Features of the Succession Investment Platform Stocks and Shares Junior ISA Contents 1. Introduction 1.1. Its aims Your commitment Risks 3 2. Questions and Answers 4 3. Important information 7 The Succession Investment Platform (SIP) is provided by Succession Advisory Services. Succession Advisory Services Limited (SAS) is registered in England and Wales number , with registered office Drake Building, Plymouth Science Park, 15 Davy Road, Plymouth PL6 8BY and is authorised and regulated by the Financial Conduct Authority No Investment Funds Direct Limited is part of the Royal London Group. Authorised and regulated by the Financial Conduct Authority No Registered Office: Trimbridge House, Trim Street, Bath BA1 1HB. Registered in England and Wales No SUC_JKFD_0418_v1

2 1. Introduction The Financial Conduct Authority is a financial services regulator. It requires us, Investment Funds Direct Limited (IFDL), to give you this important information to help you to decide whether our Stocks and Shares Junior ISA is right for you. You should read this document carefully so that you understand what you are buying, and then keep it safe for future reference. This document and our other literature is available on the Succession Investment Platform. We do not provide or offer financial, legal or tax advice. You should seek your own financial, legal or tax advice from a Financial Adviser or another suitably qualified professional Its aims» To provide a tax efficient investment for the benefit of a child.» To allow up to the Junior ISA subscription limit to be invested each year until the child reaches 18.» To receive a transfer from a previous Cash or Stocks and Shares Junior ISA or Child Trust Fund.» To provide a wide range of investment options, including equities, bonds, unit trusts, Open Ended Investment Companies (OEICs) and other investment schemes.» To give potential for capital growth Your commitment» The minimum investment for a Wrap is 1,000. There is no minimum for subsequent investments.» To make investment choices from the investments available on the Succession Investment Platform.» To subscribe no more than the annual maximum Junior ISA allowance each tax year.» To only have one Stocks and Shares Junior ISA.» To read all of the available fund information, especially that provided by the fund manager, before you commit to the investment. 2

3 1.3. Risks General risks for the Stocks and Shares Junior ISA» You will be responsible in conjunction with your Financial Adviser for making investment decisions.» The value of your investments and the income generated from them can fall as well as rise and you may not get back what you originally invested or transferred into your Junior ISA.» Any returns are subject to investment performance.» Investment returns are not guaranteed.» HM Revenue & Customs (HMRC) rules and applicable tax laws may change in the future.» Normally, withdrawals are not permitted until the child is 18 years old. This means you cannot withdraw any money that has been paid in.» If you do not require the benefits of a platform (for example consolidation of securities and online access), a Wrap may not be the best place for your Stocks and Shares Junior ISA. Investment specific risks for the Stocks and Shares Junior ISA» The risks in the Junior ISA will depend on the investments that have been chosen.» Investments in foreign assets are subject to currency risk, i.e. as well as the risk of the underlying asset there is also a risk of a loss from the currency falling against the pound sterling.» Certain investments for example emerging markets, high technology sector and small companies are generally more volatile than UK and large company investments.» Each investment carries a different level of risk and some will carry more risk than others. Full details of the risks that apply to each fund can be found in the prospectus for the relevant fund.» The price of shares on stock markets are affected by various factors including political, economical and social factors not necessarily controlled by the management of the company but the market, government or non-governmental organisations, which may be on a national or global basis.» There may not be a market to buy or sell the shares you are interested in at the time you want to trade.» Income generating funds sometimes deduct expenses from capital in order to improve income. This means that capital growth may reduce accordingly.» Past performance is not a guide to future performance.» The performance of your fund will be reduced by the effect of charges, including our charges and fund manager charges. 3

4 2. Questions and Answers What is a Stocks and Shares Junior ISA? A Stocks and Shares Junior ISA is a type of savings account with tax benefits, provided by us, for the benefit of a child that allows a wide range of investments to be selected from the funds list we make available. Who can have one? A child under the age of 18, who either does not have a Child Trust Fund account or is transferring a Child Trust Fund into the Junior ISA and who is resident in the UK for tax purposes can have a Junior ISA. Who can apply for a Junior ISA? A person who is a parent or guardian may apply on behalf of the child. Or if the child is aged 16 or 17, the child can apply. A Junior ISA can be applied for by completing the application form on the Succession Investment Platform. We will only open the Junior ISA when we have accepted the application form and the initial payment. Funds may be paid by either: 1. Cheque made payable to IFDL Client Account; or 2. Making an electronic bank transfer of monies to us; or 3. Completing a direct debit instruction. Once the Stocks and Shares Junior ISA application has been processed and accepted you will receive a letter from us acknowledging and accepting your application. How much can be saved in a Junior ISA? You are currently able to subscribe up to 4,260 each year to a Junior ISA. We do not offer Cash Junior ISAs, therefore any money placed in our Junior ISA must be invested in stocks and shares. Any subscriptions will be treated as a gift to the child. You can make additional payments (provided the HMRC Junior ISA limits are not exceeded) into your Junior ISA by cheque, electronic bank transfer or direct debit - at any time. There is no charge for making additional deposits. This money can then be used to buy your chosen investments. Who do the cash and assets belong to? All cash and assets within a Stocks and Shares Junior ISA will belong to the named child account holder. Can I transfer from an existing Junior ISA to this Junior ISA? You can transfer from an existing Junior ISA or a Child Trust Fund to this Junior ISA at any time provided this request is made in writing to us. You may transfer all of your current year Junior ISA, or part or all of a previous year s Junior ISA at any time provided the transfer is in accordance with the regulations applying to Junior ISAs and your existing ISA Manager agrees to the transfer. If you are transferring a Stocks and Shares Junior ISA the transfer will need to be completed in full as you are only able to hold one Stocks and Shares Junior ISA at any one time under these regulations. If you are transferring a Child Trust Fund, this Child Trust Fund must be transferred in full. A Junior ISA transfer may be made in cash or by re-registering assets, subject to our and the ISA Manager s agreement. A Child Trust Fund transfer may only be made in cash, subject to our and the Child Trust Fund provider s agreement. You will need to check with your existing ISA Manager or Child Trust Fund Provider whether they will make a charge to sell the assets and transfer the money in cash or make a charge to re-register the assets. What investments are available? You can invest in:» Unit Trusts;» Investment Trusts;» OEICs (Open Ended Investment Companies);» Stocks and Shares;» Exchange Traded Funds; or» Bonds. How do I find out more information about each investment? You will be able to find out further information and see any applicable key investor information documents on the Succession Investment Platform. Our funds list will provide you with information about the charges for the investments and any applicable discounts we have negotiated. It is very important that you read the information about your chosen investment before you commit to buy or switch funds. How can I make investments and deal? Once you have decided which investments you wish to buy, you or your Financial Adviser can log in to your Junior ISA online and place a trade. You can choose to make a one-off purchase of your chosen investment; or you can choose to make regular monthly investments into collective funds, including unit trusts and OEICs. Once your investment has been made, you will receive confirmation of the trade, including the prices and charges, in the form of a contract note. 4

5 What happens to any money which remains uninvested? This is held in a cash account and earns interest. Your cash is placed with a minimum of four deposit takers chosen by us for their financial strength. There is no income tax to pay on any interest that is paid. Any cash you hold will receive interest and we do our best to give you competitive interest returns. The rates of interest are available on the Succession Investment Platform. We will make a margin on the interest paid and will retain any surplus interest towards the cost of providing our services to you. Can I switch investments within my Junior ISA? Yes, you can decide how your money is invested and switch funds within your Junior ISA at any time. Please note a fund switch is treated as two deals (i.e. a sell and a buy ). Each investment provider has their own limits for switching and how much must remain within a particular investment. How can I find out the value of my investments? If you have requested online access to your account you will separately receive a Personal ID and Personal Identification Number (PIN). You can log in and access your Junior ISA online to see the value of your investments at any time. Contract Notes, which show that you have purchased or sold an investment, are also available to download using your login at any time. In addition, we will send you a valuation statement every three months by post. Will you send me company reports and accounts and voting information? We will not ordinarily send you copies of reports, accounts or voting and meeting information issued by investment providers, unless you specifically request it. We will, however, contact you if there are corporate actions that require you to make a decision (for example, if you need to tell us to take some sort of investment action) such as a rights issue or a fund closure. For more information, please see our Stocks and Shares Junior ISA Terms and Conditions document. What happens to income from investments in my Junior ISA? Income from investments in your Junior ISA will be paid to your cash account. You can then use these monies to purchase investments. What charges do I have to pay? There is an annual charge for administering your Junior ISA. This charge will be taken from cash in your Junior ISA monthly in arrears. This monthly charge will be determined by the overall valuation of the Junior ISA. We also charge for certain transactions and ad hoc services. Please refer to the Charges Schedule for more details. This is available on the Succession Investment Platform. In addition, fund managers will apply charges to your chosen investments. Your fund manager will be able to provide you with more details about these charges. What could I get back? You will get the value of your investment held in the Junior ISA at the time the investments are sold. There is no guaranteed amount. The amount you get will depend on the following factors:» How much you invest;» The performance of your investments;» Any charges;» Any income or withdrawals you have taken; and» The terms and conditions of your investment. Two examples are shown below. The Financial Conduct Authority sets standard growth rates that can be used in illustrations. For Junior ISAs these rates are 2.00% (lower growth rate), 5.00% (mid growth rate) and 8.00% (higher growth rate). All companies use these except where they believe a reduced rate is more appropriate. 1. The illustration assumes a client investment of 4,260 into a Junior ISA, which is part of a Family Group in a typical equity fund portfolio. The following assumptions apply:» One initial transaction;» Initial Adviser Charge of 2.00%;» Ongoing Adviser Charge of 0.50%;» Fund growth of 5.00% per annum;» A fund Annual Management Charge (AMC) of 0.75%;» Succession charge of 0.35%; and» One buy and sell is conducted on the portfolio each year. At the end of year Investment Effect of Deductions What you might get back ( ) 1 4, , , , , , ,260 1,140 5,820 This illustration shows over 10 years, the effect of total charges and expenses could amount to 1,140. This means that all the charges could reduce the yearly growth from 5.00% to 3.10%. Please note, charges may be higher if your Junior ISA is not linked to a Family Group. 5

6 2. The illustration assumes a client investment of 15,000 into a Junior ISA, which is part of a Family Group in a typical equity fund portfolio. The following assumptions apply:» One initial transaction;» Initial Adviser Charge of 2.00%;» Ongoing Adviser Charge of 0.50%;» Fund growth of 5.00% per annum;» A fund Annual Management Charge (AMC) of 0.75%;» Succession charge of 0.35%; and» One buy and sell is conducted on the portfolio each year. At the end of year Investment Effect of Deductions This illustration shows over 10 years, the effect of total charges and expenses could amount to 4,000. This means that all the charges could reduce the yearly growth from 5.00% to 3.10%. Please note, charges may be higher if your Junior ISA is not linked to a Family Group. What is the tax position for the Junior ISA? What you might get back ( ) 1 15, , ,000 1,100 16, ,000 1,800 17, ,000 4,000 20,400 There is no tax to pay on any income received, and no capital gains on any growth. Where income tax has been deducted from any UK income, we will reclaim this from HMRC on your behalf and it will be paid back to the Junior ISA. You do not have to declare ISA interest, income or capital gains on your tax statements. Please note, tax rules are unique to individual circumstances and may change in the future. How do I withdraw money from my Junior ISA? Normally, no withdrawals are permitted from the Stocks and Shares Junior ISA. This means that once money is placed into the account, you cannot withdraw it. Withdrawals are permitted where the child is terminally ill or has died. Can I withdraw dividends? No. Withdrawals of dividends are not permitted from the Stocks and Shares Junior ISA. Can I transfer to another Junior ISA at any time? You can transfer your Junior ISA to another ISA Manager at any time provided this request is made in writing to IFDL. You may transfer all of your Junior ISA at any time, provided the transfer is in accordance with the regulations applying to ISAs and your new ISA Manager agrees to the transfer. A transfer may be made in cash or by re-registering assets subject to the new ISA Manager s agreement. We do not offer partial transfers out. We will not apply a charge for making a transfer. However you will need to check with the investment provider of your underlying investments whether they will make a charge to sell the assets and transfer the monies in cash or make a charge to re-register the assets. Can I change my mind? Yes. When we have accepted your application for a Junior ISA and you receive this confirmation from us, you will have 30 days in which to change your mind and withdraw all monies from the Junior ISA. The Junior ISA will then be cancelled. You will get a refund of any subscriptions paid into the cash account, less any loss in the value of any amounts used to purchase individual investments. The easiest way to cancel is by writing to us at our address in the How to Contact Us section at the end of this document. Remember to include your full name, address, client reference and state clearly that you wish to cancel the Junior ISA. If you do not cancel within 30 days, your Junior ISA will continue as set out in this key features document and the terms and conditions. What happens if the child dies? If the child dies, their personal representatives must close the Junior ISA. On receiving appropriate proof of title, we will pay them the balance together with any interest earned up to the date we close the Junior ISA, or if requested, we will transfer the Junior ISA investments to them. The balance will take into account any gain or loss in the value of your investment. The proceeds from your ISA will form part of the child s estate for inheritance tax purposes. 6

7 3. Important Information How are complaints dealt with? If your complaint is about the service you have received from us, please write, telephone or us on the details shown in the How to contact us section at the end of this document. A copy of our Complaint Policy which explains what you can expect from us in these circumstances is available on the Succession Investment Platform. If you are not satisfied with the way your complaint is dealt with, or if your complaint is not dealt with in eight weeks, you can contact: The Financial Ombudsman Service Tower Exchange London, E14 9SR Telephone: free for people phoning from a fixed line (e.g. a landline at home) free for mobile-phone users who pay a monthly charge complaint.info@financial-ombudsman.org.uk If you have a complaint regarding an individual investment, this should be directed to the individual fund manager concerned. A copy of our complaints procedure is available on request. Making a complaint will not affect your legal rights. Can I claim compensation? IFDL is covered by the Financial Services Compensation Scheme (FSCS) in respect of the Wrap and the Accounts within it. If you make a valid claim against us in respect of your investments and we are unable to meet our liabilities in full, you may be entitled to compensation, from the FSCS, of up to 50,000. Your cash and investments are always held separately from our own accounts and from those with whom we place the investments. As such, any insolvency practitioner should be obliged to return your cash and investments to you as part of the wind down process. If your investment provider fails financially, as long as you have selected one covered by the FSCS - the fund prospectus will tell you this - your investments should remain covered up to a maximum of 50,000. However, this does not protect you against losses if the market were to fall in value. The banks we use acknowledge your money is held as client money which is protected in the event of the insolvency of IFDL. In the event of the insolvency of one of the banks we use, any client money we hold for you is protected under the FSCS up to a maximum of 85,000 for each client and bank with whom client money is held. This limit is applied to banks that are separately authorised and can only be applied once, therefore banks operating under different brands within the same authorisation are covered under the same limitation. The compensation limit of 85,000 includes any other money held by you in accounts with the authorised banks we use, therefore if you have current or deposit accounts with the same bank these will all count towards the compensation limit of 85,000. Temporary high balances of up to 1 million are protected for a limited period of 6 months from when the amount was first credited to the account or became legally transferable. The FSCS website has further details on the definition of a temporary high balance. For further information please visit the FSCS website ( Where can I find your Terms and Conditions? Your rights as the investor in a Junior ISA are set out in the Stocks and Shares Junior ISA Terms and Conditions, which can be found on the Succession Investment Platform. The Stocks and Shares Junior ISA Terms and Conditions may be subject to change in the future. How is this affected by the law? The laws of England and Wales govern the relationship we have with you prior to, and on conclusion of any contract, and the parties submit to the exclusive jurisdiction of the Courts of England. Any taxation information contained in this guide is based on our interpretation of current legislation and HM Revenue & Customs practice. Please remember that current tax benefits may change in the future. How to contact us Address: The Succession Investment Platform Tel: (09:00 to 17:30 Monday to Friday) Trimbridge House successionsupport@ifdl-uk.co.uk Trim Street Bath BA1 1HB 7