Independent financial adviser to personal and corporate clients

Fund Consolidation

Many clients, seeking to be as tax efficient as possible, will make use of their annual Stocks and Shares Individual Savings Account (ISA) allowance of £7,200 before the end of the tax year every 5th of April. ISAs have been around since 1999 and before that we had Personal Equity Plans (PEPs) which were introduced in 1987. From 6th April 2008, all PEP accounts automatically became stocks and shares ISAs, allowing investors the opportunity to invest in these re-labelled PEPs, as long as you have not subscribed to another stocks and shares ISA during the current tax year. The result of investors taking up these tax-breaks has had some unforeseen consequences; an often bewildering array of up to 18 different ISA or PEP accounts, each having separate statements and valuations and often meaning capital is tied up in funds, which are tax efficient, but no longer performing well.

A solution is now at hand, existing ISA funds can be re-registered or transferred to a Fund Platform or Fund Supermarket (a company that provides access to all the different investment managers in the one place). There are several advantages in doing this; If funds are re-registered, they will retain their tax benefits and you will not be out of the market while your investments are being re-registered. Your money stays invested in the same funds you hold now, managed by the same companies. All that changes is that they can now all be held together in one account. This means that each year you get a single statement and valuation with all your separate funds itemised within the total making it easier to keep an eye on the total value. Things are also easier if you move house, because you only need to contact one company rather than all the funds separately. Best of all, most re-registrations are often free of charge.

Although most ISAs can be re-registered, not all of them can. For those that can't, transferring may be appropriate. Transferring an ISA will ultimately have the same effect, i.e. you still retain the tax benefits but you change the underlying investment. This will be a distinct advantage in cases where the underlying investment funds are not performing, enabling you to get access to potentially much improved performance. Applying Risk Profiling and Portfolio Planning Techniques to a collection of different ISAs means that you can apply a common investment strategy to all the funds you transfer. Although there is a charge for transferring (similar to that incurred under a new investment), the greater investment flexibility could result in better overall investment returns.

Whether you go down the re-registration route, or the transfer route, the process is simple and straightforward. Please contact us if you would like us to arrange this service for you.