Key Features of the Wrap Account

Key Features of the Wrap Account 1

Contents 1. Introduction 1.1. About this document 1.2. About the Ascentric Wrap 2. Ascentric Wrap Account 2.1. Key Features of the Ascentric Wrap Account 2.2. Questions and Answers 3 3 4 5 3. Other information 10 Copyright Notice This document is the property of Investment Funds Direct Limited and cannot be copied, modified, or stored on a computer system without the company s consent. Ascentric is a trading name of Investment Funds Direct Limited (IFDL), registered in England and Wales number 1610781 and authorised and regulated by the Financial Conduct Authority No.114432. Customer Services: 0345 600 5360. Telephone calls may be recorded for training and security purposes. Head office: Trimbridge House, Trim Street, Bath BA1 1HB. IFDL is part of the Royal London Group, registered in England and Wales number 00099064. Head office: 55 Gracechurch Street, London EC3V 0RL. 2

1. Introduction 1.1. About this document 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 Wrap Account 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 Private Investors area of our website www.ascentric.co.uk 1.2. About the Ascentric Wrap The Ascentric Wrap is an online service that allows you to view all your investments and their value at any time. Unlike many such offerings, Ascentric acts wholly independently of all product and investment providers on the platform, and undertakes not to influence you or your Financial Adviser s selection in any way. 3

2. Ascentric Wrap Account 2.1. Key Features of the Ascentric Wrap Account What is a wrap? A wrap allows you to view all your investments and their up to date values via the internet. It is called a wrap because all the products (e.g. pensions and ISAs) and investments you have are wrapped up in one account. You will be able to discuss the performance of your portfolio with your Financial Adviser and decide what should be sold and bought. Its aims» To allow you, with the assistance of your Financial Adviser to select and purchase investments from a wide range of equities, bonds, unit trusts and open ended investment companies (OEICs) and other investment schemes and cash.» With advice from your Financial Adviser, you can select the most appropriate tax Wrapper products to optimise any tax advantages that best reflect your financial objectives.» You and your Financial Adviser can view, value and place orders for these investments via the internet. Aims of each Wrapper» The General Investment Account (GIA) Wrapper allows you to invest any amount you wish, subject to any minimum investment level we set. Investments in this account will usually be subject to UK tax.» The Individual Savings Account (ISA) Wrapper allows you to invest in stocks and shares up to the HM Revenue and Customs (HMRC) ISA subscription limit each year. It also allows you to transfer ISAs from other ISA managers. No tax is payable on your ISA investment income or gains.» The Ascentric Pension Account (SIPP) Wrapper allows you to pay contributions and to transfer pensions from other UK registered pension schemes. When you reach the minimum retirement age set by HMRC (currently age 55) you can choose to take a lump sum and/or income from your SIPP or purchase an annuity on the open market. You will receive tax relief on pension contributions, investment income and gains and some lump sums paid from the SIPP. For more information please refer to the Ascentric Pension Account Key Features Document.» A Third Party Product Account (TPPA) Wrapper allows you to invest the cash held in a product provided by a third party (e.g. an offshore bond or pension) on our wrap platform. The aims of the underlying product and its tax position depends on the type of product. You should refer to the third party product provider for more information. Your commitment» The minimum investment for a wrap is 1,000. There is no minimum for subsequent investments. The minimum investment for a TPPA will be determined by the minimum set by the third party product provider but can be no less than the above.» You are required to maintain at least 2% of all assets held in each Wrapper in the form of cash to meet all charges subject to a minimum of 100 and a maximum of 2,000 per Wrapper.» You agree to read all of the available fund information, especially that provided by the Fund Manager, before you commit to the investment. Ascentric will take all of the instructions placed via your account in good faith that they were placed by you. You must keep your login security details private and not share them with others.» You agree only to make subscriptions up to the HMRC limits for stocks and shares ISAs; and you agree not to invest in another stocks and shares ISA with another ISA manager in the same tax year. Risks» The value of these 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 the Wrap Account.» Past performance is not a guide to future performance.» The performance of your fund will be reduced by the effect of charges including Ascentric charges, Financial Adviser charges, Fund Manager charges and Product Provider charges.» Income generating funds sometimes deduct expenses from capital in order to improve income. This means that capital growth may suffer accordingly.» If you do not require the benefits of a platform (consolidation of investments, online access, tax reporting etc), a wrap may not be the best place for your investments.» Withdrawing income from your fund can reduce capital growth especially where performance is poor and the level of income withdrawn is high.» Certain investments for example emerging markets, high technology sector and small companies are generally more volatile than UK and large company investments.» The risks in your investment portfolio will depend on the funds you have 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.» Should you not maintain the 2% minimum cash balance required IFDL will sell assets, without further notification, from the largest holding downwards to restore this minimum balance. This may occur at a disadvantageous time, may have a material effect on the balance of assets within a Model Portfolio and you may incur a capital gains tax liability.» Tax rules may change in the future. Your Financial Adviser will be able to review your portfolio with you and provide guidance on the relevant tax rules that apply to you. 4

2.2. Questions and Answers How can I invest in an Ascentric Wrap Account? You should first consult your Financial Adviser in order to choose the appropriate product Wrapper (e.g. ISA, Pension or Offshore Bond) and then the appropriate asset allocation and investment approach. Your Financial Adviser can then open an Ascentric Wrap Account for you upon completion of an Ascentric application form signed by you. Your Financial Adviser can send the completed application form to Ascentric. In either case we will need an application form signed by you before we set up the account. We will not open the account until funds are available. Funds may be sent either: 1. Electronically by bank transfer or by cheque from you personally or your Financial Adviser 2. By means of a transfer of funds from another product provider 3. From a newly selected third party product provider that already holds your funds What investments are available? Your Wrap Account can invest in a wide selection of collective funds including Unit Trusts and OEICs and cash, as well a wide range of securities offered by the London Stock Exchange (LSE) including Exchange Traded Funds (ETFs), Investment Trusts, Bonds and Gilts. It is very important that you read the information that the Fund Manager provides about your chosen funds before you commit to the deal via your Financial Adviser. Where can I find fund specific disclosure documents? Through your Wrap Account you will have access online to our Fund List. This provides a list of all the funds you can invest in together with their associated charges including applicable discounts. Each fund listed contains disclosure documentation that can be accessed by clicking on the Details button. What type of investors is the Ascentric Wrap appropriate for? The Ascentric Wrap is appropriate for the following types of investors:» Individual investors aged 18 or over» Corporate, charity or trustee investors What are the current ISA limits? You are currently able to save or invest up to 20,000 each tax year, in any combination of permitted ISAs, to the extent that you do not exceed the 4,000 lifetime ISA limit. You can only subscribe to one stocks and shares ISA, one cash ISA, one innovative finance ISA and one lifetime ISA in each tax year. You can make additional subscriptions (provided you do not exceed the HMRC ISA limits) at any time into your ISA by cheque or direct debit. There is no charge for making additional subscriptions. Subject to HMRC rules, if you are over 18 and the surviving spouse of a deceased ISA holder who died on or after 3rd December 2014, you can pay in additional subscriptions in cash on top of the annual subscription limit, provided you have not transferred these rights to another ISA manager. The amount you can pay as an additional subscription is the higher of:» the value of the deceased s ISA at the date of their death; or» the value of the deceased s ISA at the date of: 1. the completion of the administration of the deceased s estate; or 2. the closure of the account; or 3. the 3rd anniversary of the death of the ISA holder; whichever is earliest. This limit applies to the surviving spouse of a deceased ISA holder who died on or after 6 April 2018. If a deceased ISA holder died on or before 5 April 2018, the value of the additional subscription is the value of the deceased s ISA at the date of their death. How can I make investments and deal? Your Financial Adviser can do this on your behalf. Once you have agreed which Wrapper(s) is/are appropriate and your investment selection, your Financial Adviser will login using specially protected PIN codes and deal on your behalf. A Contract Note is available online that details all of the prices and charges on the deal. What happens to money which remains uninvested? This is held in a cash account within each respective Wrapper and earns interest. The rates of interest are available on the Ascentric website. Can I save my money in cash? Yes, there is a cash account in each Wrapper. Your cash is placed with a number of deposit takers chosen for their financial strength. Although we do our best to give you competitive interest returns, our cash accounts are principally designed to hold cash ready for investing, cash arising from a sale, as well as any dividend and interest received. You also have access to Cash Deposits (Fixed Term Deposits and Notice Accounts) subject to their availability on the platform. How can I see what I have invested in? When you open your account we will send you an email with your User ID. You will need to log in to create your password and PIN. You will then be able to visit the Ascentric website and see your investments. How often will you communicate the value of my investments? You will be able to print off a full valuation of your investments in your Ascentric Wrap Account whenever you wish. In addition, we will send you a statement every three months. Contract Notes, which evidence that you have purchased or sold an investment, are also available to download at any time. Information regarding changes to Fund Managers, specific funds or to stocks and shares will be sent to your Financial Adviser for onward communication. 5

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 normally issued by investment providers, unless you specifically request it. We will, however, contact you if there are Corporate Actions that require an election (i.e. where you need to take some sort of action) such as a Rights Issue or a fund closure. For more information please see our Terms and Conditions document. What happens to income from my investments in the wrap? Income from investments in your Wrap Account will be paid to your cash account. Monies from your cash account or investment income can be paid to your selected bank account at regular intervals in amounts you select with your Financial Adviser. Please note that should there be insufficient cash in your account to meet the income payment we will sell investments to meet it as stated in the Ascentric Terms and Conditions. What happens to income from my investments in the TPPA? This is dependent on the terms and conditions of the third party product provider. Please refer to these and/or consult your Financial Adviser. What is a Model Portfolio and how do I use it? This is a tool used by your Financial Adviser that allows them to select a number of funds to invest in and apply an appropriate weighting to each. For example, you may wish to invest 5% in High Risk funds, 40% in Medium risk, 40% in Low risk and 15% in ethical funds. The Model Portfolio allows your Financial Adviser to do this. When you add more cash to the account, you can re-balance the model. This function takes the appropriate buy and sell actions on the funds to bring the portfolio back to the required distribution. This is a good way to ensure your portfolio continues to meet your investment needs and attitude to risk. What is Phased Investment? With Phased Investment, you or your Financial Adviser may invest a regular monthly sum into your chosen fund or funds. Please see the Phased Investment factsheet for more information. How do you, Ascentric, get paid? We take the charges from you as detailed in the Ascentric Account Charges schedule. Financial Advisers, DFMs or third parties may make a charge against cash assets. What written statements will I get from you? We will make the following available to you: 1. Valuation statements online all the time. 2. Contract notes that show the details of your individual trades, and are available online when you need them. 3. Printed statements every three months, sent to your registered home address. 4. Printed tax vouchers after the end of every tax year to help you fill in your tax returns. These are called Consolidated Tax Vouchers (CTVs). What is the tax position for the ISA and GIA? There is no income tax to pay on any interest that is paid on your ISA, and no capital gains on any growth. Where tax has been deducted from any UK income, we will reclaim this from HMRC on your behalf and it will be paid back to your account. You do not have to declare ISA interest, income or capital gains on your tax statements. You may be required to pay tax on any income that you receive into your GIA and declare this on your self assessment tax form. We will send you a Consolidated Tax Voucher that shows your investment income. If you do not pay tax at all, the same forms can be used to help you reclaim the tax from HMRC. Please note, tax rules are unique to your individual circumstances and may change in the future. What are the implications should any of the parties involved be wound up? Will I lose my money? Will I be compensated? 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 (www.fscs.org.uk). 6

What happens if I want to change my Financial Adviser or my Financial Adviser firm changes its parent company? Please write to us if you change your Financial Adviser. Your old Financial Adviser s access to your account will be cancelled. We will sign up your new Financial Adviser (if they aren t already with us) and ask you to provide a written instruction appointing your new Financial Adviser. This written instruction is necessary as we need your authorisation for the new Financial Adviser to access your account and charge you for their services. The Financial Adviser charge and the terms with us will remain the same unless we are instructed otherwise. We will not take instructions from your old or new Financial Adviser without your authorisation. If your Financial Adviser moves its parent company they will inform you. Very often, when this happens, all of your account will be moved as is and you will not need to sign a new contract or authorise new payments. Your Financial Adviser will tell you what needs to happen. If you operate your account without a Financial Adviser, Ascentric will apply a further nominee charge of 0.50% on all investments in your account to cover the cost of additional administration. This is in addition to the annual platform charge normally payable on your Account. Please see the Ascentric Account Charges schedule for more information. What are the charges for the Ascentric Wrap? There are several charges that may be made on your investments: 1. Ascentric charges 2. Financial Adviser charge 3. Fund Manager charge 4. Product Provider charge 5. Third Party charge 3. Fund Manager charge These are shown on the Fund List on the Ascentric website which your Financial Adviser can show you. In addition, access is given to the Fund Manager Terms and Conditions for each fund as selected. Ascentric has negotiated advantageous terms with Fund Managers such that their initial charge (net of any Financial Adviser charge) is low and often zero. These deals are shown on the Fund List in the secure area of the Ascentric website. 4. Third Party Product Provider charges If you invest into a Third Party Product Account, additional charges may be applied to your Account. These will be set by the product provider of your Third Party Product Account as applicable. Please refer to the product provider s literature for details of these charges. 5. Third Party charges These charges may be arranged between you and your Financial Adviser, such as Discretionary Fund Manager charges. Please contact your Financial Adviser for more details. How do these charges affect my investment? The impact of charges on your investment depend on a number of factors including among others the funds selected, the rate of Financial Adviser charge and any product charges. Three examples are shown below. The Financial Conduct Authority sets standard growth rates that can be used in illustrations. For ISAs these rates are 2.00% (lower growth rate), 5.00% (mid growth rate) and 8.00% (higher growth rate) For other products such as the General Investment Account (GIA), the rates are 1.50%, 4.50% and 7.50% respectively. All companies use these except where they believe a reduced rate is more appropriate. Please see the corresponding sections below for an overview or for further information please read our Account Charges schedule. Ascentric will start taking these charges as soon as you have transferred cash and/or assets to the platform. 1. Ascentric charges Ascentric s charges are set out in the Ascentric Account Charges schedule available on the Ascentric website. If you have appointed a Financial Adviser who has agreed special wrap account charges with us these will apply to your wrap account. However, if you elect to change your Financial Adviser at some point in the future standard Ascentric wrap account charges will apply, unless your new Financial Adviser has agreed special wrap account charges with us. Your Financial Adviser will supply you with details of any special wrap account charges that may apply to your account. 2. Financial Adviser charge This will be agreed between you and your Financial Adviser and stated clearly on the application form which you must sign to confirm your agreement. This will cover the agreed Initial and Ongoing Adviser Charges. The deduction of this initial charge will be viewable via the Ascentric Wrap Deposit or Reserve Account. 7

1. The illustration assumes a client investment of 50,000 into an ISA in a typical equity fund portfolio. The following assumptions apply:» Five initial transactions» Fund growth of 5.00% per annum» Initial Adviser Charge of 2.00%» Ongoing Adviser Charge of 0.50%» a fund Annual Management Charge (AMC) of 0.75%» Ascentric charge of 0.30%» Two buys and sells are conducted on the portfolio each year At the end of year Investment to Effect of deductions to What you might get back ( ) 1 50,000 1,900 50,600 3 50,000 3,700 54,100 5 50,000 6,000 57,800 10 50,000 13,100 68,300 This illustration shows over 10 years, the effect of total charges and expenses could amount to 13,100. This has the same effect as bringing illustrated investment growth from 5.00% a year down to 3.20% a year. 2. The illustration assumes a client investment of 500,000 into an GIA in a typical equity fund portfolio. The following assumptions apply:» 10 initial transactions» Fund growth of 4.50% per annum» Initial Adviser Charge of 2.00%» Ongoing Adviser Charge of 0.50%» a fund Annual Management Charge (AMC) of 0.75%» Ascentric charge of 0.30%» Three buys and sells are conducted on the portfolio each year At the end of year Investment to Effect of deductions to What you might get back ( ) 1 500,000 18,000 504,000 3 500,000 37,000 533,000 5 500,000 58,000 565,000 10 500,000 125,000 651,000 This illustration shows over 10 years, the effect of total charges and expenses could amount to 125,000. This has the same effect as bringing illustrated investment growth from 4.50% a year down to 2.70% a year. 3. The illustration assumes a client investment of 1,500,000 into a GIA in a typical equity fund portfolio. The following assumptions apply:» 20 initial transactions» Fund growth of 4.50% per annum» Initial Adviser Charge of 2.00%» Ongoing Adviser Charge of 0.50%» a fund Annual Management Charge (AMC) of 0.75%» Ascentric charges 0.30% for the first 1m and 0.10% for funds between 1m and 3m» Five buys and sells are conducted on the portfolio each year At the end of year Investment to Effect of deductions to What you might get back ( ) 1 1,500,000 50,000 1,510,000 3 1,500,000 110,000 1,600,000 5 1,500,000 160,000 1,700,000 10 1,500,000 350,000 1,970,000 This illustration shows over 10 years, the effect of total charges and expenses could amount to 350,000. This has the same effect as bringing illustrated investment growth from 4.50% a year down to 2.80% a year. N.B. The above figures are not guaranteed and serve only to demonstrate the effect of charges and expenses on an investment. All figures have been rounded down to three significant figures. 8

How much will the advice cost? Ascentric will pay the Financial Adviser only as we are instructed by you. For example, if you agree an initial charge with the Financial Adviser of 3.00% and the investment is 10,000, your Financial Adviser will receive 300 in charges from you. We will pay Ongoing Adviser Charges to your Financial Adviser every month. So for example, if you agree an ongoing Financial Adviser charge of 0.60% per annum on an investment which is worth 10,000 at the end of a month, we will pay your Financial Adviser 5.00 for that month. Can I switch my investment from one fund to another? Yes. This will be treated as a sell and a buy transaction. This means you will be out of the market for a time while the receipts of the sell instruction are confirmed and before the buy instruction can be made. How long will I be out of the market when I switch from one Fund Manager to another? On average it should take one - two business days for this process to complete, but this can vary widely depending on the funds and/ or investment involved. Why do I have to retain 2.00% of each Wrapper in cash subject to a minimum of 100? This is to ensure there is always sufficient cash in each Wrapper to pay the charges you have agreed. Where this is not maintained, IFDL will automatically sell assets from the largest holding downwards, from within the Wrapper to restore the 2% minimum cash balance. You should refer to the Cash and Client Money section of the Ascentric Terms and Conditions for further information. What happens when I encash my investment? You instruct us to sell all of your investments and we will pay the proceeds into your nominated bank account after deducting any outstanding charges. Can I transfer investments into or out of my GIA? Yes, subject to our agreement and the agreement of the investment provider. Can I transfer an existing ISA arrangement into my ISA on the Ascentric Wrap? You can transfer your cash ISAs and stocks and shares ISAs to us. You may transfer some or all of any previous tax year subscriptions, however any current tax year subscriptions must be transferred in full. You are able to transfer some or all of the money saved in previous tax years without affecting your annual ISA allowance. When an existing stocks and shares ISA is transferred to us in specie, we will check that the requested investments are allowable under HMRC rules. Can I transfer my ISA to another ISA manager? You are able to transfer your ISA at anytime to another stocks and shares or cash ISA manager.. However, please note that we do not offer partial transfers out and your ISA must be transferred out in full. Can I open a Joint Account with you? We can operate a Joint Account for up to four people. The first named individual on our application forms will become the primary account holder and be primarily responsible for the account. Please note, any changes to or withdrawals from this type of Account will need all signatures before Ascentric will action them. For more details on Joint Accounts, please see the Ascentric Terms and Conditions or call Ascentric Customer Services. What if I die? Ascentric will require your death certificate and a copy of the Grant of Probate before it can accept any instructions from your executors in respect of your GIA or ISA. ISAs cease to benefit from any tax advantages until the earlier of: 1. the completion of the administration of the deceased s estate; or 2. the closure of the account; or 3. the 3rd anniversary of the death of the ISA holder. If you are the primary account holder in a Joint Account, a new primary account holder will need to be nominated from the existing signatories. 9

3. Other Information How to contact us If you have a Financial Adviser, please continue to use them as your first point of contact. You can also call our Customer Services team on: Telephone: 0345 076 6140 (09:00 to 17:30 Monday to Friday) Address: Ascentric Customer Services Trimbridge House Email: customerservices@ascentric.co.uk Trim Street Website: www.ascentric.co.uk Bath BA1 1HB Your Client Category The Financial Conduct Authority (FCA) is the independent financial services regulator. It asks companies to categorise their clients based on their involvement in and familiarity with financial services. This helps to ensure we send the right information to the right people. We classify you as a retail client under Financial Conduct Authority rules. This means you will receive the highest level of regulatory protection available for complaints and compensation and receive information in a straightforward way. How to complain We hope you will never be unhappy with our service. If this does happen, your first step is to contact us to discuss your concerns and we will aim to resolve them straight away. If you are still not entirely satisfied, we have an internal complaints procedure which follows the standards required by the Financial Conduct Authority. Initially, please contact us at: Telephone: 0345 076 6140 (09:00 to 17:30 Monday to Friday) Address: Customer Services Manager Ascentric Email: customerservices@ascentric.co.uk Trimbridge House Trim Street Bath BA1 1HB A copy of our Complaint Policy is available on www.ascentric.co.uk. If you are not satisfied with our response, you have the right to refer your complaint to the Financial Ombudsman Scheme. How to contact the Ombudsman The contact details for the Ombudsman are as follows: Telephone: 0800 023 4567 free for people phoning from Address: The Financial Ombudsman Service a fixed line (e.g. a landline at home) Exchange Tower 0300 123 9123 free for mobile-phone users London E14 9SR who pay a monthly charge Email: Your Cancellation Rights complaint.info@financial-ombudsman.org.uk Should you wish to cancel, please send your notification to: Ascentric Customer Services, Trimbridge House, Trim Street, Bath BA1 1HB. You are able to cancel your Account up to 30 days after you receive our confirmation of its establishment. However, if you have asked us to invest your cash, you may get less than you have invested. Please refer to our Terms and Conditions document for full details available at www.ascentric.co.uk. Terms and Conditions Your rights as the investor in our Wrap Account are set out in the Ascentric Terms and Conditions, which may be subject to change in the future. Law The terms relating to the Ascentric Wrap are governed by the law of England and Wales. ASC_KFD.25_0418_v1