INDEPENDENT FINANCIAL ADVICE ON MONEY MATTERS AROUND THE HIGHLANDS, ISLANDS & MORAY
In years gone by, the most common way to hold shares in companies listed on the stock exchange would have been to receive a share certificate. The share certificates were issued by company Registrars who kept a list of all the shareholders of an individual company. Investments made in Unit Trusts were usually held directly with the fund provider and the company would issue statements on a regular basis.
As technology has improved, most investments can now be held electronically in an account designated to an individual, Company or a Trust. The vehicle that provides this facility is known as a platform. In recent years, there has been substantial growth in this space. Most platforms can facilitate holding investments in a General Investment Account, a Stocks and Shares ISA, Pensions, Onshore and Offshore Bonds. There are benefits to holding investments on a platform. The first to highlight would be that it reduces the volume of paperwork you receive. This allows you to hold all of your investable assets in one place (subject to the platform’s capabilities). If you imagine you held shares in ten individual companies and had a further three holdings in Unit Trust investments, you would receive correspondence at least twice a year, if not more, for each of your holdings. As a bare minimum, you would have 26 different pieces of correspondence a year in respect your investment holdings. With all of the assets being held in one place the level of correspondence would reduce substantially, as platform providers would only provide quarterly investment statements.
Most platforms also offer access to various tax efficient wrappers including ISAs and pensions. They often allow you to undertake various tax planning measures, such as moving money from a General Investment Account into an ISA each tax year, with relative ease, as the accounts sit in one place.
As you may expect, there is a cost involved for using a platform. This varies from provider to provider. You do not pay a charge for holding shares in certificated form. In addition to the charge for holding the investment, some platforms will charge for other aspects of functionality such as the reinvestment of dividend income or the provision of a Company’s annual report. These are usually provided free of charge by the Company Registrar.
With assets held on a platform it may be that certain fringe benefits, such as shopping vouchers or promotional offers, which are attached to shares, cannot be accessed by the end investor.
Given the size of the investable universe, there is a chance that some platforms may not offer access to all of the investments that may be held in a portfolio.
To help choose a platform appropriate for the client, an adviser would consider the charges applicable, the level of service delivered by the platform provider and the functionality of the platform.
Not all platforms are not the same and therefore it is important to consult with an Independent Financial Adviser to see if this is right for your needs.
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Martyn Percival, Chartered FCSI DipPFS, Financial Planner Watson Wood Financial Planning is the trading name of Watson Wood & Sillars Ltd which is authorised and regulated by the Financial Conduct Authority. Watson Wood & Sillars Ltd is entered on the Financial Services Register (www.fca.org.uk/ register) under reference 806354.
visit Watson Wood & Sillars Ltd website for more information.
DID YOU KNOW?
Every Day in the UK…
- Government debt increased by £115.1 million a day in the year to July 2019.
- Borrowers paid £139 million a day in interest in June 2019.
- On average, a UK household spends £4.05 a day on water, electricity and gas.
- It costs an average of £22.95 per day for a couple to raise a child from birth to the age of 18.
- For a lone parent family, the cost of raising a child comes to £27.90 per day.
- In Northern Ireland, there were 8 insolvencies per day and in Scotland 39 insolvencies per day.
- Government debt increased by £115.1 million a day in the year to July 2019.
- The average interest rate for an instant access savings account, not including bonus interest payments, was 0.42% in June 2019. For a cash ISA, this was 0.83%.
Source: The Money Charity (Registered Charity England & Wales (1106941)
John Bruce Dip PFS is a Director of East2west Financial Services, a trading name of Fairstone Financial Management Ltd, which is authorised and regulated by the Financial Conduct Authority.
visit East2west Financial Services website for more information.
Next month’s topic is on Inheritance Tax
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