Getting started as a self investor. Your guide to self investing

Transcription

1 Getting started as a self investor Your guide to self investing

2 Been saving for a while? Thinking about investing but unsure where to start? Investing is something many think is worthwhile but never get round to doing. Compared to saving, it s complicated and timeconsuming, isn t it? Not anymore. You can take care of things yourself. Managing your own investments without professional financial advice often called self investing or DIY investing is becoming more straightforward. Just as you might manage your banking and buy insurance on a tablet or computer, you can now look after your investments online. Frustrated by low interest rates adding little to your savings, you may now be looking at what else you can do and are considering self investing. Although investing has the potential for higher returns than cash savings over the long term, returns aren t guaranteed and you could get back less than you originally invested. This guide from AXA Self Investor takes you through the basics to help you get started as a self investor. Introducing AXA Self Investor AXA Self Investor is an online investment service. We don t offer financial advice based on your personal circumstances. Instead, we support you with tools and guides like this, to help you make informed investment decisions for yourself. Using our service means you re responsible for deciding which investments are suitable for you. If you feel you need personal advice, you should contact a financial adviser. You can find one at AXA Self Investor - Getting started as a self investor 01

3 Starting out as a self investor This guide will take you through what to think about when starting out as a self investor and explain how AXA Self Investor s straightforward approach can help you get off the ground. Ready to take control? Learn how AXA Self Investor s service is designed to help you take control of your own investments without personal financial advice. 5 What are your goals and attitude to risk? Think about your aims and how long you want to invest for. You also need to consider how much risk you re prepared to take in order to achieve your goals. 1 Taking control of your investments 2 Are you investing tax efficiently? Find out why a stocks and shares ISA could be an ideal first home for your investments and how it can help you make the most of your annual 15,000 tax efficient ISA allowance. 4 3 What is the cost of self investing? Find out about the charges typically associated with self investing and how AXA Self Investor is committed to keeping costs crystal clear. Why invest in funds? Discover why investment funds can offer a straightforward and convenient way to invest. All investments carry different levels of risk. The value of your investment can go down as well as up and you could get back less than you originally invested. Tax benefits may change in the future. AXA Self Investor - Getting started as a self investor 02

4 What are your goals and attitude to risk? First things first. Is investing right for you? Before you go any further, ask yourself this important question. Your answer will depend on things like your personal circumstances and attitude to risk. Cash savings offer security and guaranteed returns but, in the long run, investing can deliver potentially higher returns. Investing comes with greater risk, as the value of your investments can fall, and growth isn t guaranteed so make sure you re comfortable with this risk before starting out as an investor. What are your investment goals? Think about your goals in life and how investing may help you achieve them. What are your aims for your investment? There are many reasons why you may want to invest. Perhaps you re planning for retirement, helping your children buy their first home or simply investing for the future. Consider how much money you might need to achieve your aims. Do you want growth or income? You may be looking for growth, with an investment that aims to increase in value over time. Alternatively, you may want to receive regular payments similar to an income from your investment, through dividends or interest. How long do you want to invest for? Always think of investing as being for the medium to long term that s at least five years or more. Some investment goals don t have a deadline. Others may come with a time limit. You should think carefully about how long you may need to invest to meet your goals, and your attitude to risk. Do you have money you can access easily? With your investments focussed on your goals for the future, it s a good idea to also have sufficient cash saved in an account that can be accessed whenever you need to. AXA Self Investor - Getting started as a self investor 03

5 What are your goals and attitude to risk? What s your attitude to risk? With any investment comes risk, so it s important to decide how much you re prepared to take to try and achieve your goals. How comfortable am I with taking risk? Generally, the more risk you take the bigger the potential returns on your investment. A more risky investment is likely to be more volatile, which means it can rise more rapidly but also fall faster. The risk you take needs to be at a level you re comfortable with and importantly, a level you can afford. Decide your attitude to risk Use our Risk profiler to help you understand your attitude to risk and whether investing is right for you. How much can I afford to lose? There s more to self investing than deciding how comfortable you are with risk. You also need to weigh up how much you can afford to lose. If you lost the money you invested, how would this affect your standard of living? Could you maintain your current lifestyle or would you need to make sacrifices? You may be willing to make a high-risk investment, but your personal circumstances could determine that you invest more cautiously. How long am I planning to keep my investment? Your investment goals are likely to drive this decision. While there are no guarantees, keeping your investment for a minimum of five years, and ideally ten years or more, increases the potential for better returns. That s because there s more time to recover should it suffer short-term dips in value. As you approach the date you want to use your investment, you can also choose to reduce its level of risk. Try our Risk profiler AXA Self Investor - Getting started as a self investor 04

6 Are you investing tax efficiently? Are you making the most of your ISA allowance? When setting out as a self investor, a stocks and shares ISA could provide an ideal first home for your investments. In the 2014/15 tax year, you can put up to 15,000 in a Cash ISA, a stocks and shares ISA or any combination of the two. Putting your investments in a stocks and shares ISA is tax efficient because you won t have to pay Capital Gains Tax or Income Tax on any gains you might make. Dividends paid within a stocks and shares ISA are subject to a 10% tax credit which can t be reclaimed. Tax benefits may change in the future. Why a stocks and shares ISA with AXA Self Investor? Invest up to 15,000 a year tax efficiently Straightforward and low cost investing Get started from just 50 per month or with a lump sum of 500 or more Choose from a wide range of funds No fees to transfer your existing stocks and shares ISA or Cash ISA to us No fees to us to buy, sell or switch funds Earn a variable rate of interest on any cash held in your ISA while you decide where to invest Manage your investments online 24/7 Want to know more? What might your ISA be worth? Get an indication of how much a stocks and shares ISA investment might be worth in the future with our ISA forecaster. Try our ISA forecaster AXA Self Investor - Getting started as a self investor 05

7 Are you investing tax efficiently? Already invested your full ISA allowance? Made the most of your ISA allowance for this tax year? Have more to invest? Our trading account, more commonly called a General Investment Account, gives you access to our full range of funds with no limit on how much you can invest. Although this type of account doesn t offer the tax advantages of an ISA, holding your investments in one place makes them easy to monitor and, see how together they re performing against your goals. Also, with each new tax year, if you re unable to find reserves elsewhere, you could use money in your trading account to top up your stocks and shares ISA to make the most of your tax efficient allowance. You can invest from as little as 50 per month or a lump sum of 500 or more, and keep track of everything with our secure online investment service. Remember, all investments carry different levels of risk so the value of your trading account can go down as well as up and you could get back less than you originally invested. Read more Transfer your other investments hassle free Over the years, you may have accumulated ISAs with different providers or invested in funds directly with fund managers. Having lots of homes for your investments can make it difficult to keep track of how each is performing and importantly, what each is costing you. By bringing them all together in a stocks and shares ISA and/or trading account with AXA Self Investor, you can monitor your investments securely online whenever you want and you might get a better deal. Your current provider may charge you an exit fee, so it s always wise to check this with them first. Our dedicated team will guide you through each step of the online transfer process to make it as straightforward and hassle free for you as possible. Invest from just 50 per month in a stocks and shares ISA or trading account Am I protected with AXA Self Investor? Yes, AXA Self Investor is authorised by the Financial Conduct Authority and covered by the Financial Services Compensation Scheme. If AXA Self Investor were to fail, you can currently claim up to 50,000 on money invested in funds within your AXA Self Investor accounts or cash which is yet to be passed to our banking partner. If AXA Self Investor s banking partner were to fail, you can currently claim up to 85,000 on any money held by them and showing as cash in your AXA Self Investor accounts. To find out more visit Please remember that with investing comes risk and there s no protection against your investment not performing as you may have hoped. AXA Self Investor - Getting started as a self investor 06

8 Why invest in funds? Why invest in funds? The range of investment options available may seem a little overwhelming. Researching, managing and monitoring your investment choices on a regular basis require commitment and time. That s why investment funds can be a good choice for the self investor as much of the work is done for you by a professional fund manager. What s an investment fund? An investment fund is a pool of money from lots of individual investors that s managed by a fund manager. Through their experience and expertise, the manager uses this money to buy a selection of assets to meet the aim of the fund. Why choose an investment fund? Here are just some of the reasons why placing your money in an investment fund, rather than investing directly in shares, might be right for you. Access to expertise: Investing directly in the market can take considerable time and expertise. By investing in a fund, you gain access to the experience and skills of a professional fund manager, who takes care of your investment for you. They manage the fund in line with its objectives. Spreads risk: As the fund manager invests across a wide range of different investments the risk is spread, as potential losses in one investment may be offset by potential gains in another. The fund manager also monitors the fund regularly and responds to changing market conditions if and when necessary. Brings down the cost of investing: Funds invest in a wide range of assets, the cost of which is shared across all investors in the fund. If you invested directly in such a range of assets, it could cost considerably more. Safeguards in place: Authorised UK funds and their fund managers are regulated by the Financial Conduct Authority (FCA). Your investment will also be held independently by a trustee or depositary who oversees the fund manager. Tax effective: Fund managers are not liable for Capital Gains Tax when buying and selling assets within the fund, whereas, a private investor would be. Funds to help meet your goals: You can choose from many authorised funds with different objectives. This makes it easier to find a fund that matches your needs with access to UK and worldwide markets. Easy to monitor: With fund prices published daily online, you can check regularly how your fund is performing. The value of your investment can go down as well as up and you could get back less than you originally invested. Unsure about choosing funds? If you re not sure which funds to choose, you can open a stocks and shares ISA or trading account with cash and select funds a little later. While you re deciding, your cash will earn a variable interest rate. If you hold cash in your stocks and shares ISA you can withdraw it at any time. The withdrawal may take longer than from a Cash ISA held in a bank or building society. Charges may apply if you want to withdraw cash quickly from AXA Self Investor. AXA Self Investor - Getting started as a self investor 07

9 Why invest in funds? A choice of four fund ranges Everyone s different. That s why AXA Self Investor offers a wide selection of funds from across the market. To help get you started and make choosing more straightforward, we ve split them into four fund ranges. You can choose to focus on one range or mix and match funds from each. All-in-One fund choice I m not sure where to begin. I d like a limited selection of funds with different risk profiles. This choice comprises six funds managed by AXA s investment experts, each with a different risk profile. You can choose the one that best meets your attitude to risk and investment goals. Find out more Quick Start fund choice I want to build my own selection of funds; can you show me some example selections to get me started? This choice brings you three example fund selections to get you started, chosen by AXA s investment experts. Find out more Favourite fund choice I d like to choose from a shortlist of expertly selected funds. This choice brings you a selection of funds handpicked and continually monitored by AXA s investment experts. Full fund choice I want to choose from all the funds that AXA Self Investor offers. This choice brings you a comprehensive range of funds from across the market, covering the major fund managers, asset classes and investment sectors. Find out more Find out more Reassurance in the funds we offer All the funds offered by AXA Self Investor fall under a strict regulatory framework from the Financial Conduct Authority (FCA). Investment funds are overseen by an independent trustee to ensure they are managed in the interest of the investors. The assets within each fund are also ring fenced and overseen by an independent custodian. AXA Self Investor - Getting started as a self investor 08

10 What is the cost of self investing? The costs to self invest With a variety of fees and charges, you might think that the cost of using an online investment service seems complicated. To reassure you, at AXA Self Investor, we re committed to keeping our charges transparent with no hidden charges, so you ll always know exactly what you re paying for. Why not see how well we compare? y with us What you ll pay with us With AXA Self Investor, all you ll pay is our account charge and fund manager charges. s Our low account charge explained The following account charges are applied to the total you have invested across all your AXA Self Investor accounts, including any cash you hold: 0.35% a year if you have up to 250,000 in total 0.20% a year if you have 250,000 or more in total And finally, should you ever decide that our service isn t for you, we won t charge you a penny to leave. Fund manager charges explained Fund manager charges will apply from the time you invest and vary by fund. Full details of each fund s charges can be found in the Key Investor Information Documents (KIID). You can find these in the Fund selection tool next to each fund. Fund entry and exit fees may be charged on certain funds and cover expenses associated with making the investment, such as buying additional assets. These are charged to the investor and this money is invested back into the fund. Please remember, the value of investments can go down as well as up and you could get back less than you originally invested. To find out more take a look at our charges AXA Self Investor - Getting started as a self investor 09

11 Ready to take control? Ready to self invest? If you can answer yes to these questions, it could be time to get started as a self investor. Tired of low interest rates? Comfortable taking some risk with your money for potentially higher returns? Got medium to long term financial goals? Want more control over your investments? Don t feel the need for personal financial advice? AXA Self Investor service and support for the self investor We understand that taking control of your own investments without personal financial advice is a big decision. That s why our aim is to make the process of investing more straightforward for you. By removing some of the confusion, providing tools to help you plan and jargon free guides to explain the finer points, you ll be better equipped to make informed investment decisions for yourself. Straightforward and low cost investing Access to your investments online all day every day A wide choice of funds across 4 fund ranges A starting point of just 50 per month or a lump sum of 500 or more No fees to transfer in or out No fees to us to buy, sell or switch funds Earn a variable rate of interest on any cash held in your ISA or trading account while you decide where to invest Manage your investments online 24/7 As soon as you invest with AXA Self Investor, you ll have access to our online service 24/7. You can check how your funds are performing, buy, sell and switch your investments, and see any returns at a glance. Regularly monitoring and reviewing your funds will help ensure they continue to meet your needs as your circumstances change. Should you ever have any questions about our service, our UK based Customer Support team is available to help via phone, , Livechat and even Twitter. Ready to get started? Go to axaselfinvestor.co.uk now If you d like to speak to someone about our service, please call our UK based Customer Support team on , Monday to Thursday 8am to 7pm, and Friday 8am to 6pm. AXA Self Investor - Getting started as a self investor 10

12 A service you can trust AXA Self Investor is part of the global AXA Group. When you invest with us, you can feel confident you re investing with a trusted brand built on years of expertise and experience. AXA serves 102 million clients across 56 countries. * AXA is a worldwide leader in financial services, with 157,000 employees across the globe. * Architas, part of the AXA Group, work with AXA Self Investor to provide a range of funds which could be suitable for new, and more experienced investors. * Please note that AXA Self Investor is 100% owned by the AXA Group but it has no legal right of access to the assets of the AXA Group. All figures correct as at 14 May Architas are part of the AXA Group. They are made up of two companies: 1. Architas Multi-Manager Limited, which is authorised and regulated by the Financial Conduct Authority. They are responsible for creating and managing the funds within the All-in-One fund choice. 2. Architas Advisory Services Limited, which is not authorised or regulated by the Financial Conduct Authority or the Prudential Regulation Authority. They select the Quick Start and Favourite fund choice ranges. AXA Self Investor does not give advice based on personal circumstances. Using our service means you are responsible for deciding which investments are suitable for you. Personal advice is only available from a financial adviser, if you don t have one, you can find one at unbiased.co.uk. AXA Self Investor, PO Box 6890, Basingstoke RG24 4SL. Telephone number: As part of our commitment to quality service and security, telephone calls may be recorded. AXA Portfolio Services Limited trades as AXA Self Investor and is part of the AXA Group. AXA Portfolio Services Limited is authorised and regulated by the Financial Conduct Authority. It is a company limited by shares, registered in England No Financial Services Register No Registered office: 5 Old Broad Street, London, EC2N 1AD.