INVESTOR PORTFOLIO SERVICE (IPS) USING IPS. This document gives you information about using IPS to manage and make changes to your investment.
USING THIS DOCUMENT. This document gives you important information to help you understand more about your investment and how you can use IPS to manage and make changes to it. You should read the following documents before investing or making changes: The Key Investor Information Document (KIID) gives you the key information you need to decide whether a fund is right for you. It s essential that you read the KIID carefully so that you understand what you re buying. You can find these at nationwide.onlineips.co.uk/content/investments.aspx The Investing with IPS brochure gives you practical information about the investments we re offering and the IPS service. It contains important information to help you make an informed decision about investing. The Important Fund Information guide lists the funds available to you and shows the specific risks that apply to them. There is also a separate document that explains the Terms and Conditions that apply when you invest. You must also read this document. All documents are available from Customer Services, online or from your adviser if you have one. 2
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CONTACTING US. There are three ways to get in touch: Call our UK Customer Services contact centre: 0345 272 0089 We re open Monday to Friday 9am to 5.30pm. Call charges will vary. We may record and monitor calls. Email us: investor.portfolio.service@onlineips.co.uk If you re contacting us by email, please remember not to send any personal, financial or banking information because email is not a secure method of communication. Write to our correspondence address: Investor Portfolio Service PO Box 1112 Chelmsford CM99 2UX 4
VERIFICATION OF IDENTITY. We need to verify your identity because it s a regulatory requirement to prevent fraud and money laundering. The information you supply is only used for the purpose of verifying you. Usually, we verify you through your adviser or electronic checks. However, there may be times when we contact you to supply additional identity verification documents. These times may include: if we haven t received verification from your adviser and/or you haven t passed the electronic checks if you invest 50,000 or more in one transaction if you set up a regular investment of 4,000 or more per month. We can accept the following documents to verify your identity. We need to see one certified copy from section A and B: SECTION A - EVIDENCE OF IDENTITY (PHOTOGRAPHIC EVIDENCE) full signed passport full current photographic driving licence national identity card SECTION B - EVIDENCE OF ADDRESS recent utility bill* recent mortgage statement* recent bank/ building society statement* full current driving licence * dated within the last three months Please note that a driving licence can only be used as evidence for either Section A or Section B. It won t be accepted for both. If you need to send original documents we recommend you use a secure postal method. If you fail to provide us with the required documentation your Account will be frozen and we ll be unable to continue with your transaction. If you initially invest online or send us a cheque for your transaction we ll invest your money as per your instruction. However, if we haven t received verification of your identity your Account will be frozen following this transaction and no further transactions will be accepted until the required documentation has been received. 5
ADDING MONEY. There are three ways to add money to your investment: By cheque complete an application form, and send this, along with your cheque, to our correspondence address. Online by debit card if you re registered for online servicing. For information on how to register please contact Customer Services or your adviser. Use money in your IPS Cash Account. The annual ISA allowance for the 2018-2019 tax-year is 20,000. You need to read the Key Investor Information Document (KIID) for the fund(s) you re investing in. Application forms are available from Customer Services, online or from your adviser if you have one. Please makes cheques payable to Investor Portfolio Service and include your name on the payee line (for example, Investor Portfolio Service J Smith). IMPORTANT INFORMATION Please remember the value of your investment can fall as well as rise, and is not guaranteed. You should be prepared to invest for five years or, ideally, longer. 6
REGULAR INVESTMENTS. You can set up a new monthly investment online or by completing a Transaction Form. It takes 10 working days to set up the Direct Debit before we can take the first payment. You can increase or decrease an existing regular investment. The minimum change you can make is 10 for each fund, with a minimum monthly investment of 20. You can also change the fund(s) you re investing in. Changes take five working days. You can cancel a regular investment by contacting us by telephone or in writing. Cancellations need to be made at least five business days before the next collection date. You need to read the Key Investor Information Document (KIID) for the fund(s) you re investing in. Transaction forms are available from Customer Services, online or from your adviser if you have one. IMPORTANT INFORMATION Please remember the value of your investment can fall as well as rise, and is not guaranteed. You should be prepared to invest for five years or, ideally, longer. 7
SWITCHING FUNDS. You can move money to another available fund at any time. You can do this online, by telephone or in writing, or by completing the switch section on the Transaction Form. The Important Fund Information guide shows you the funds available. HOW IT WORKS: We ll sell the funds that you want to switch out of. Units will be sold at the funds next valuation point. Once we receive confirmation of the sale and price from the fund manager, we will buy the funds you want to switch into. You will not know in advance what prices you will receive. We ll then send you confirmation that the switch has taken place. Please note Switches between funds usually take two working days to complete, depending on the valuation point for your chosen fund(s). You should be aware that your investment may be out of the market for a period of time while the switch is taking place. This means there may be the potential for loss of income or growth if the market rises whilst the switch is pending. You need to read the Key Investor Information Document (KIID) for the fund(s) you re investing in. Transaction forms and the Important Fund Information guide are available from Customer Services, online or from your adviser if you have one. 8
MOVING MONEY FROM A UNIT TRUST/OEIC INTO AN ISA. You can move money from a fund held outside your ISA into your ISA, using a Unit Trust/OEIC to ISA Switch Form. The annual ISA limit still applies to money added to your ISA in this way. HOW IT WORKS: We ll sell units/shares from your unit trust/oeic on the day we receive your instruction. Your money will be held as cash for one day until we get confirmation that we re receiving the withdrawal proceeds from the fund manager. We ll then reinvest your money in an ISA in the funds you ve selected. You won t necessarily hold the same number of units in the ISA once funds have been moved. You ll receive two contract notes for this transaction. The first one will show the sale of units from your unit trust. The second one will show the units bought in the ISA. You need to read the Key Investor Information Document (KIID) for the fund(s) you re investing in. Unit Trust/OEIC to ISA Switch forms are available from Customer Services, online or from your adviser if you have one. Please note You should be aware that your investment will be out of the market while the transfer is taking place. This means there may be the potential for loss of income or growth if the market rises whilst the transfer is pending. You will be subject to the difference in the buying and selling prices (bid-offer spread) of any dual priced funds, and any dilution levy for single priced funds. Please see Understanding Unit Prices for more information on how this can affect your investment. 9
TAKING AN INCOME. If you hold investments that generate an income, you have the freedom to choose whether the income is paid to you, held in your account for future use, or reinvested. MOST FUNDS OFFER A CHOICE OF TWO UNIT TYPES: Accumulation (ACC) units any income is retained in the fund. Although the number of units will remain the same, the price of each unit increases. Income (INC) units income is paid out. This can be paid into a Nominated Bank Account, held in your IPS Cash Account or reinvested to buy more units, thereby increasing the number of units you hold. IF YOU WANT INCOME PAID TO YOU: Income from the funds can be paid to you as a single convenient monthly payment to your Nominated Bank Account. All income received in the previous month will be paid to you on or shortly after the seventh business day of the month. Any income waiting to be paid to you will be held securely in a client money account called the Consolidated Income Account where it will earn interest. Interest of less than 1 a month is not paid. IF YOU WANT TO HOLD INCOME IN YOUR IPS CASH ACCOUNT: Income from your investment can be paid into your IPS Cash Account. The income is made available shortly after it s received from the fund manager and is not consolidated into a single payment. Once available you could use it to fund new investments as you wish. CHANGING YOUR INCOME OPTION: You can change your income option using the Transaction Form available from Customer Services, online or from your adviser if you have one. Please note If you decide to take or reinvest income this decision affects all relevant funds. You cannot take income from some funds and reinvest for others. 10
TRANSFERRING AN ISA TO IPS. You can transfer an existing ISA you hold with another company to IPS. We ll invest any ISA transferred to us in a stocks and shares ISA. If you want to transfer your ISA holding to us, you ll need to complete the ISA Transfer Application and Authority form and send it to our correspondence address. HOW IT WORKS: You send us the completed ISA Transfer Application and Authority form. We ll then send it to your existing ISA manager. They ll take this as authority to cash in your investment according to their terms and conditions. The transfer value will then be sent directly to us, as cash, for investment. We ll then invest the cash in the funds you choose, still within an ISA. We ll send you a confirmation that the transfer has taken place. WHAT YOU ALSO NEED TO KNOW: Your existing ISA manager may charge an exit fee on transfers. Your investment will be out of the market while the transfer is taking place. This means there may be the potential for loss of income or growth if the market rises whilst the transfer is pending. If you re transferring an ISA taken out in the current tax year, you must transfer the current tax year investment(s) to that ISA in full. We don t currently offer a Lifetime ISA, however you can transfer your Lifetime ISA into a Stocks and Shares ISA. Should you transfer from a Lifetime ISA to this Stocks and Shares ISA, your Lifetime ISA status will be lost along with any other benefits specific to that ISA. You need to read the Key Investor Information Document (KIID) for the fund(s) you re investing in. ISA Transfer forms are available from Customer Services, online or from your adviser if you have one. IMPORTANT INFORMATION Please remember the value of your investment can fall as well as rise, and is not guaranteed. You should be prepared to invest for five years or, ideally, longer. 11
WITHDRAWING MONEY. You can take money out by selling units or shares from your investment, from at least 20 and up to your total investment value. WE CAN PAY YOUR MONEY: Into your IPS Cash Account. Straight into your Nominated Bank Account once we ve verified it. HOW TO WITHDRAW MONEY: Using a Withdrawal Form ensures that we get all the information we need from you. You can also call, or write to, Customer Services. WHAT HAPPENS NEXT? When we ve accepted your instruction, we ll sell your investment as instructed. Payments can take seven to ten working days to reach your Nominated Bank Account. In some cases we may have to delay payment to you if information is outstanding or unclear. If you tell us to withdraw all of your investments, we won t automatically close your IPS Cash Account as well. We ll need a specific instruction telling us to close the IPS Cash Account to do that. If you take out some or all of your ISA investment, you won t be able to make any further payment to that ISA in the same tax year, unless you have some unused allowance. Any money you move from your ISA to your IPS Cash Account won t remain in the ISA. This means you ll lose the ISA benefits on that money. If you want to move money out but keep it in your ISA you can use the Cash Reserve. Withdrawal forms are available from Customer Services, online or from your adviser if you have one. 12
TRANSFERRING AN ISA TO ANOTHER MANAGER. To transfer your ISA to another company, we need notification from the new manager in writing. You should contact them to arrange the transfer of the ISA. Depending on the type of instruction we receive from the new manager, we ll either re-register your existing investment to them, or sell the units or shares held within your investment with us and transfer the cash value to them. Other managers may have a minimum they ll accept, so you should check that first. As with a withdrawal, the minimum you can transfer out is 20. 13
THE IPS CASH ACCOUNT. 1 of 2 A key aim of IPS is to make it easier for you to manage your investments. That s why we ve designed the IPS Cash Account to give you greater control and flexibility while investing with us. WHAT IS THE IPS CASH ACCOUNT? This account allows you to manage the movement of cash into and out of your investments. You can use it to: hold your money when it s not invested in a fund; pay for your investments; receive money that you withdraw from your investments; hold income paid out by income units; and manage the payment of your IPS Platform Charge and any advice or service charges you have to pay. So you can keep track of your money we ll give you a Platform Account Reference that refers to your IPS Cash Account. If you have more than one IPS Cash Account you ll have a unique reference for each. You need to quote this whenever you add money to your IPS Cash Account. You can see the total value of the cash you hold in your IPS Cash Account, as well as all the transactions that have gone through it, at any time online. Alternatively, you can contact Customer Services. You ll also see a clear summary of your transactions in your three monthly statement. WILL MONEY IN THE IPS CASH ACCOUNT RECEIVE INTEREST? Yes, we pay you interest at the beginning of each month on money held in your IPS Cash Account. You can see details about the interest rates online at www.onlineips.co.uk/accountrates or by contacting Customer Services. You can find your Platform Account Reference online and in your three monthly statement. It s 12 characters long and begins with a letter. 14
THE IPS CASH ACCOUNT. 2 of 2 HOW TO ADD MONEY TO THE IPS CASH ACCOUNT Bank transfer from your Nominated Bank Account Money from your investments Income from your investments Cheque Sale for Regular Payment You can add money from your Nominated Bank Account into your IPS Cash Account electronically. You can make electronic payments using your Platform Account Reference as your payment reference. Send payment to: Sort code: 16-04-00 Account: 31256358 If you choose to sell any of your investments the value of the sale will automatically be transferred to your IPS Cash Account. This money is then ready for investing at a later date or can be transferred to your Nominated Bank Account. Any income you receive from your investments will be held in your IPS Cash Account where it will earn interest. This money will either be held in your IPS Cash Account or paid to your Nominated Bank Account, depending on your instruction. Please see taking an income for more information. Of course, you can still send us a cheque with instructions telling us to add the money to your IPS Cash Account. Make any cheque payable to Investor Portfolio Service and include your name on the payee line (for example, Investor Portfolio Service J Smith). If there isn t enough money in your IPS Cash Account to pay for any charges due, we ll automatically sell units from your investments to raise the required amount. This is known as a Sale for Regular Payment. Please see the Terms and Conditions for more information on how the Sale for Regular Payment process works and how it affects your investment. A copy is available from Customer Services, online or from your adviser if you have one. 15
THE IPS PLATFORM CHARGE. The IPS Platform Charge is paid to IPS to cover the costs of the services we offer, including setting up and administering your investments, the technology we use and providing you with a service. HOW IS THE IPS PLATFORM CHARGE CALCULATED? The IPS Platform Charge is calculated and paid monthly based on the value of the IPS investments you hold. The amount you pay will vary as it depends on the value of assets you hold with us, and the number of days in the month. For more information on the IPS Platform Charge please see the IPS Platform Charge Explained document available from Customer Services, online or from your adviser if you have one. HOW AND WHEN IS THE IPS PLATFORM CHARGE DEDUCTED? You pay the IPS Platform Charge from your IPS Cash Account towards the end of each month, so it s important that you have enough money available in your IPS Cash Account to pay it. One way to do this is to add money to your IPS Cash Account in advance. See How to add money to the IPS Cash Account. If there isn t enough money in your IPS Cash Account to pay the IPS Platform Charge for any month, we ll automatically sell units from your investments. This is called a Sale for Regular Payment. For information on all the charges you might pay please see What charges will I pay? in the Investing with IPS brochure. A copy is available from Customer Services, online or from your adviser if you have one. SALE FOR REGULAR PAYMENT If your units are regularly sold to pay the IPS Platform Charge your capital could be reduced. You ll permanently lose the ISA tax benefits on any ISA units sold. Any gains on the units sold from your unit trust or OEIC, outside an ISA, will count towards your Capital Gains Tax (CGT) allowance. Please see the Terms and Conditions for more information on how and when we ll sell units to pay the IPS Platform Charge. A copy is available from Customer Services, online or from your adviser if you have one. 16
WHAT HAPPENS IF YOU DIE UNIT TRUSTS AND OEICs Your investment account doesn t automatically close. The money remains invested in the chosen funds and will continue to move with the market. For single holdings, your personal representative(s) can request a: a) full withdrawal and payment to be made to the named beneficiary(ies); or b) transfer of the holding, to the named beneficiary(ies) and continue the investment. For joint holdings, the investment continues in the name of the survivor(s). The value of your unit trust and OEIC holding(s) will count as part of your estate for working out any Inheritance Tax. ISAs Although money can t be paid in to your ISA after your death, the ISA will continue to remain tax exempt for the purposes of UK Income Tax and Capital Gains Tax while we re waiting for the paperwork relating to your estate. This Continuing ISA account status remains until either the administration of your estate is complete, the Continuing ISA account is closed, or three years have passed since date of death, whichever is sooner. Your personal representative(s) can request a: a) transfer of the holding to the named beneficiary(ies) and continue the investment. This includes making use of any inheritable ISA allowance. b) full withdrawal and payment to the named beneficiary(ies). The value of your ISA holding(s) will count as part of your estate for working out any Inheritance Tax. 17
INHERITABLE ISA ALLOWANCE. A surviving spouse/registered civil partner of a deceased ISA holder can make additional investments to their ISA, on top of the normal annual investment limit. These additional investments are limited to the value of the deceased s ISA holdings at their date of death or the value at the point their ISA ceases to be a Continuing ISA account whichever is higher. An additional investment can be made under the following circumstances: You are the surviving spouse/registered civil partner of an ISA holder who died on or after 3 December 2014. You were living with your spouse/registered civil partner at the time of their death. You make the investment within the permitted period. Any additional investment(s) will be treated as if it existed in the previous tax year. Your current tax year ISA allowance will remain unchanged. To make use of an additional ISA allowance please complete an Inheritable ISA application form. If you inherit part or all of an investment your spouse/ registered civil partner had in an ISA with IPS you can transfer the funds directly into an ISA. Please request a Stock Transfer pack and Inheritable ISA Transfer of units form. Application forms are available from Customer Services, online or from your adviser if you have one. Please see the Terms and Conditions for more information about inheritable ISA allowances. 18
UNDERSTANDING UNIT PRICES. 1 of 2 WHEN ARE UNIT PRICES CALCULATED? The unit price for a fund is calculated at every valuation point. The valuation point is the set time each day when the fund manager works out the unit/share price of a fund based on the value of all its assets. Different funds have different valuation points. When you buy or sell units, we use the unit price at the first valuation point after we receive your instruction. HOW ARE UNIT PRICES CALCULATED? Unit prices are based on the value of all the fund s assets. Each of these assets may have a buying and a selling price: The difference between these two prices will vary depending on the type of asset, how easy it is to trade and where in the world it s based. For example, cash deposits have no difference but commercial property has a large difference. In addition there s a range of costs to pay when buying or selling these assets such as stockbroker fees or stamp duty. The size of the difference between the two prices can change on a daily basis as investment conditions change. There is a range of methods for calculating the prices of a fund that allow for all these factors: Each method has a different way of allowing for the costs of buying and selling the fund s assets to allow for when the fund is growing or reducing in size. Where the method used doesn t pass the full costs onto customers, either putting money into or taking money out of the fund, the costs can be paid from the fund. This will affect its potential performance. The funds available can be either dual priced or single priced. The fund tables in the Important Fund Information guide tell you the valuation point and pricing method for each fund. 19
UNDERSTANDING UNIT PRICES. 2 of 2 WHAT IS DUAL PRICING? Dual-priced funds have two different prices, a price you buy units at (known as the offer price) and a price you sell units at (known as the bid price). The difference between these prices is called the bid offer spread. This spread accounts for the costs of buying and selling the fund s assets. It protects ongoing investors from the costs of other investors buying and selling units. The size of the spread will differ between funds. It will tend to be larger for funds investing in commercial property, certain corporate bonds, smaller companies or emerging markets. Where this is the case, it could lead to a large difference between the prices at which you buy and sell units. WHAT IS SINGLE PRICING? Single-priced funds have just one price, directly linked to the value of the fund s assets. You buy and sell all units in the fund at this single price. Each day, units in a fund have a single price for all investors buying and selling. High levels of buying or selling may increase the fund s dealing costs and affect the value of its assets. This is known as dilution, and these costs can reduce the fund value. To protect ongoing investors from dilution the fund manager may do one of two things: Charge a dilution levy on certain individual large purchases or sales, to cover the costs of those transactions. Make a dilution adjustment by changing the price of all units, to cover the extra costs. The Prospectus for each fund gives you detailed technical information on a fund s pricing method, including how it deals with dilution. You can contact us to get a copy free of charge. The Prospectus is only available in English. 20
UNDERSTANDING DERIVATIVES. Some funds may use derivatives for investment purposes. A derivative is a type of contract that a fund takes out with another company. They are specialist contract-based investments that some funds use to help with efficient day-to-day management of the fund or to reduce some of the risks of the market. For example, a contract could have the option to buy a particular asset class at a particular price in the future. Alternatively, it could enable the fund to benefit from the changes in value of a particular asset class over a period of time (even if the value goes down). Derivatives are sometimes used to: Manage the effect of changes in exchange rates or interest rates. Invest indirectly in an asset class (without actually buying the asset). Invest in an asset class at a lower cost. Manage cash flow. Derivatives can be more volatile than a direct investment in company shares, bonds or commercial property. The Key Investor Information Document (KIID) tells you whether the fund uses derivatives, and whether this is to help with efficient day-to-day management or to enhance performance. 21
Cofunds Limited Registered in England and Wales No. 3965289 Registered office: Level 43, The Leadenhall Building, 122 Leadenhall Street, London, EC3V 4AB We are authorised and regulated by the Financial Conduct Authority. P3037 Q53307 Version 04/18 H0160295