Asset. Service. Investment Portfolio Service and Portfolio Administration Service Rates and Charges

Transcription

1 Asset Management Service Investment Portfolio Service and Portfolio Administration Service Rates and Charges

2 Contents Rates and Charges for the Investment Portfolio Service (IPS) 1 Service Charge and Termination Fee 1 IPS Portfolio Funds and Charges 2 Dealing Fee 4 Collective Investment Schemes 4 Additional Charges 4 Rates and Charges for the Portfolio Administration Service (PAS) 5 Quarterly Subscription 5 Service Charges and Termination Fee 5 Dealing Fee 6 Collective Investment Schemes 6 Monthly Statements of Income (Charities Only) 6 Banking Interest and Service Charges 7 Select ISA 8 Appendix Examples showing when the calculation of the service charge takes 9 place for the Investment Portfolio Service

3 Rates and Charges for the Investment Portfolio Service (IPS) The rates and charges shown below are those in force as at May 2014, but the amounts and the charging structure are subject to periodic revision. The times of the charges may likewise vary. Charges are subject to VAT at the current rate where applicable. Service Charge and Termination Fee The basis of the charge A service charge of 1% is payable annually in advance and is based upon the market value of your IPS portfolio, including any balance on your Capital account. This service charge is for our management and administration of the securities in your IPS portfolio, together with (if applicable) your Select ISA. The latest available prices are used on the date on which the service charge is calculated. In the case of holdings in a collective investment scheme or investment bond, the value taken for fee purposes will be the current bid price or the single pricing (as appropriate) published by the managers or providers of the scheme. There is a minimum annual charge of 1,000, other than for the first year when there is no minimum charge. Calculation and payment of the charge The service charge is payable annually in advance, although slightly different arrangements apply in the first year. In the first year, the service charge will be proportional so that it covers: the period from the commencement of the agreement until the first working day after the 10th of the next calendar month following commencement; and the forthcoming year after that date. The calculation of the first service charge will take place on the first working day after the 10th of the fourth calendar month following commencement of the agreement and will become payable after that date. The first service charge will cover all capital or assets which have been received by that date, so that any capital or assets received after that date will be treated as additions to your portfolio instead. In each subsequent year, the service charge will be calculated on the anniversary of the first working day after the 10th of the next calendar month following commencement of the agreement and will become payable after that date. For examples of how the service charge is calculated in the first and subsequent years, and its proportionate refund on termination, please see the appendix at the end of these rates and charges. Additions to and withdrawals from the portfolio If you add any further capital or assets to your portfolio from time to time, an advice charge may be payable for any advice you receive and this would be agreed with you in advance where applicable. The payment of this advice charge may at your request be arranged for you by Lloyds Bank Private Banking Limited and, depending upon which adviser provided the advice, be paid to another company within the Lloyds Banking Group. A proportional service charge will also be payable on the capital and assets added to your portfolio during the charging period. However, a proportionate refund of the service charge will not be made by us if you make any partial withdrawal of capital or assets during the charging period. Termination A proportionate refund of the service charge will be made by us on termination for the period from the date of termination until the anniversary of the first working day after the 10th of the next calendar month following commencement of the agreement. A termination fee of 500 will be made on closure of your portfolio to cover our costs in relation to the closure, for example selling your holdings and transferring the proceeds back to you or your personal representatives or as you may direct. Dealing charges will also apply if any equities, gilts or bonds in your portfolio are sold as part of the closure (see page 4 for details). The termination fee will also be charged on the death of any of the parties to a portfolio held on a tenancy in common basis to cover our costs in dealing with the deceased s share of the assets. You will need to decide what you want to happen to your holdings on termination. You may wish to have the holdings sold and the proceeds of sale transferred to you. Alternatively, you may wish to transfer your holdings into your own name instead or to another adviser. If so, you should be aware that the class of shares held in the IPS portfolio funds is only available to clients of IPS and cannot be held in your own name. However, we can arrange to convert them into another class of shares in the same portfolio funds and transfer your holdings to you or to another adviser, if the adviser can accept that class of shares. Otherwise, we will need to sell the holdings and transfer the proceeds of sale instead. Please note that the ongoing fund management charges may change and 1

4 details of this and other information about the portfolio funds will be provided to you. On the death of a client in a sole case or in a joint case where the portfolio is held as a tenancy in common, all holdings belonging to the deceased will only be sold once the personal representatives are in a position to give us their instructions, in accordance with the Terms and Conditions. IPS Portfolio Funds and Charges Your overall IPS portfolio consists of two of the three IPS portfolio funds listed below, depending on your chosen investment profile: IPS Growth Portfolio IPS Income Portfolio IPS Higher Income Portfolio. The provider of the portfolio funds is SWIP Fund Management Limited, part of the Aberdeen Asset Management Group. The portfolio funds, in turn, invest in funds carefully selected from the market and may include funds managed by a company that is part of the Lloyds Banking Group. When investing in funds, our chosen approach is to invest in regulated collective investments. However, on occasion we may select unregulated funds within specific asset types or from specific providers. We may change the range of investments from time to time without notice. Total Expense Ratio (TER) This is a ratio expressing all costs you will incur in holding your investment in terms of a percentage of the fund s total assets. This includes the fund s annual management charge (AMC) levied by the fund manager, in this case SWIP Fund Management Limited, and other running costs including audit, legal and custody fees. The TER is in addition to the service charge described under the section Service Charge and Termination Fee. The charges are shown in the table below: Fund TER Portfolio Fund TER * IPS Growth Portfolio 0.75% IPS Income Portfolio 0.70% IPS Higher Income Portfolio 0.77% * As at 01/05/14. For the most up to date TER please contact your relationship manager. These charges are taken from the capital or income within the fund and calculated on a daily basis. They are deducted from the fund itself periodically or on an ad hoc basis and will have already been taken into account in the pricing of the relevant holding. The TERs are approximate costs and could vary periodically depending on the changes within the underlying funds. For illustration purposes the table below shows the TERs for each profile. 2

5 The charges are shown in the table below: Profile TER Profile TER * Defensive 0.70% Cautious 0.71% Cautious High Yield 0.77% Discovery 0.72% Discovery High Yield 0.76% Balanced 0.73% Balanced High Yield 0.76% Progressive 0.74% Dynamic 0.74% Adventurous 0.75% * As at 01/05/14. For the most up to date TER please contact your relationship manager. Switching Transfers can be made between funds at any time without incurring any charges. We may make transfers between funds on your behalf at any time. Such transfers are not subject to a fee but may incur capital gains tax depending on your personal circumstances. Dilution adjustment When we buy or sell holdings on your behalf the fund manager will usually have to buy or sell individual investments within a fund to complete the transaction. The price that we are quoted for the fund does not take into account any transaction costs for buying and selling individual investments. For example, the broker s commission and, in the case of UK shares, stamp duty which applies to purchases. To cover these costs, the fund manager reserves the right to apply a charge called a dilution adjustment. This helps to protect your interests, and those of other investors, by ensuring that the common property of the fund, owned by all investors, is not diluted by the costs incurred when an individual investor buys or sells holdings. Lloyds Bank Private Banking does not benefit in any way from the dilution adjustment. 3

6 Dealing Fee These charges will apply only when selling any equities, gilts and bonds on your behalf for reinvestment into IPS. This may happen immediately or over an agreed period of time. Your existing ISAs can only be transferred to a Select ISA in cash. The holdings must therefore be sold by your existing provider prior to transfer (and not by us). Please note that, once you have opened your Select ISA, you may, at our discretion, transfer to it shares in a company that you have received from an approved profit sharing or savings related share option scheme. These shares will be sold at once by us and the proceeds reinvested in the IPS portfolio funds referred to on page 2. The sale of these various investments under IPS and on termination will normally be carried out by a Lloyds Banking Group company. A dealing fee will be charged at the following rates, which will be paid to us and then all or part of this fee may be paid by us to the relevant group company. The charges are shown in the table below: Equities On the first 10, % (minimum 30) On the next 50, % On the next 190, % On any balance over 250, % Gilts and Bonds On the first 30, % (minimum 30) On the next 220, % On any balance over 250, % International Trades 0 to 10, % of consideration (minimum 60) 10, to 60, % 60, to 190, % Over 190, % For sales of more than 10,000 in value, there is also a fixed Stock Exchange PTM (Panel of Takeovers and Mergers) levy of 1. Collective Investment Schemes Where you have any investments in collective investment schemes (other than the IPS portfolio funds referred to on page 2), charges will apply to those investments until such time as they are sold for reinvestment into IPS. There are typically an ongoing or annual fund management charge and certain other charges levied by the fund manager which may be deducted periodically or on an ad hoc basis. These charges will vary according to the fund manager, but typically the ongoing fund management charges will be in the region of % per annum. Additional Charges We may provide advice to you on securities or money not held in your IPS portfolio or any extra services such as financial counselling generally. An advice charge may be payable for any such advice you receive and this would be agreed with you in advance where applicable. The payment of this advice charge may at your request be arranged for you by Lloyds Bank Private Banking Limited and, depending upon which adviser provided the advice, be paid to another company within the Lloyds Banking Group. 4

7 Rates and Charges for the Portfolio Administration Service (PAS) The charges and commissions shown below are those in force as at May 2014 but are subject to periodic revision. The times of the charges may likewise vary. Charges are subject to VAT at the current rate where applicable. This service is only available with the Investment Portfolio Service and not by itself. Quarterly Subscription A quarterly subscription fee of will be payable in advance, although slightly different arrangements apply for the first quarter. In the first quarter, the quarterly subscription fee will be proportional so that it covers: the period from the commencement of the agreement until the first working day after the 10th of the next calendar month following commencement; and the forthcoming quarter after that date. The quarterly subscription fee for the first quarter is payable on the first working day after the 10th of the fourth calendar month following commencement of the agreement. The subscription fee for the second quarter is payable in advance at the same time and subsequent fees quarterly in advance thereafter. A proportionate refund will not be made by us on termination. Service Charges and Termination Fee The following service charges are payable quarterly in arrears. The charges for the first quarter are payable on the first working day after the 10th of the fourth calendar month following commencement of the agreement and subsequent charges quarterly in arrears thereafter. Please also refer to the Dealing Fee and Collective Investment Schemes sections below. Custody charges 1.30 per security per month. These charges are calculated by reference to the number of securities held on the 10th of each month or the preceding working day. Transaction charges For each investment transaction carried out during the preceding quarter, The transactions in this category are: i. purchases and subscriptions and sales and redemptions of stocks, shares, units and other securities and rights therein (one charge irrespective of number of calls on purchases and subscriptions); ii. receipts of bonus issues; iii. conversions and exchanges; iv. sales of rights under rights issues; v. acceptance of rights under rights issues (one charge irrespective of number of calls); vi. purchase and encashment of insurance bonds, withdrawals therefrom, whether regular or otherwise, and switches between the underlying funds or securities; vii. any other transactions which in our opinion are investment transactions. Termination Upon termination, a transaction fee of per transaction is payable in arrears. Examples of where such a transaction fee will be made include (but are not limited to): i. a transfer of securities from our nominee company to another nominee name; ii. a transfer of securities to your own name; iii. a reassignment or encashment of bonds; iv. a transaction made pursuant to your instructions, such as the sale of securities. A holding charge of 1.30 per holding per month is also payable, if and for so long as the return of your portfolio has not for any reason been completed. 5

8 Dealing Fee Purchases and sales will normally be carried out by a Lloyds Banking Group company. A dealing fee will be charged for these services, at the following rates, which will be paid to us and then all or part of this fee may be paid by us to the relevant group company. The charges are shown in the table below: Equities On the first 10, % (minimum 30) On the next 50, % On the next 190, % On any balance over 250, % Gilts and Bonds On the first 30, % (minimum 30) On the next 220, % On any balance over 250, % International Trades 0 to 10, % of consideration (minimum 60) 10, to 60, % 60, to 190, % Over 190, % Purchases of shares are subject to Government stamp duty of 0.5%. For purchases and sales of more than 10,000 in value, there is also a fixed Stock Exchange PTM (Panel of Takeovers and Mergers) levy of 1. Collective Investment Schemes PAS is an execution only service. Where investment is made in collective investment schemes, there is an initial dealing charge for purchases, which is taken by us or the fund manager at the time of your investment, together with an ongoing or annual fund management charge and certain other charges levied by the fund manager which may be deducted periodically or on an ad hoc basis. These charges will vary according to the fund manager, but typically the initial dealing charge will be in the region of 3.00% of the amount invested and the ongoing fund management charges in the region of % per annum. Where an initial dealing charge or ongoing fund management charge is payable on the purchase or holding of investments in a collective investment scheme, all or part of such charge or fee may be paid to us by the fund manager. We normally receive all the initial dealing charge and up to 75% of the ongoing or annual fund management charge whilst you remain invested in the relevant collective investment scheme. Details of all such fees and charges are set out in your Statement of Financial Affairs and you may also request further details from us at any time. Monthly Statements of Income (Charities Only) i standing charge each month a statement is prepared. ii per entry. 6

9 Banking Interest and Service Charges The details shown below are those in force as at May 2014 but are subject to periodic revision. The Income account is used to receive all dividends, interest or other payments relating to the securities in your portfolio. The Capital account is used for the carrying out of any transactions and the holding of funds under management in your IPS portfolio. Income account Capital account Interest paid to client on credit balances (see notes) The managed rate from time to time in force and available from the offices of Lloyds Bank Private Banking Limited (LBPB). Credited to the account on the first working day after the 10th of each month. The managed rate from time to time in force and available from LBPB s offices. Credited to the Income account on the first working day after the 10th of each month. Interest and banking service charges on debit balances (see notes) These accounts should not incur a debit balance for any reason and so no interest or service charges will be levied. Notes 1. In respect of all Private Banking accounts (i.e. the Current and Investment accounts at Lloyds Bank plc (as mentioned in the glossary in Appendix B to the Terms and Conditions for the service) and the Income and Capital accounts at LBPB) the Taxes Act 1988 normally requires income tax, at the rate specified by law, to be deducted from the interest credited, unless, subject to note 2. opposite, the depositor has supplied a certificate of non-liability to tax. However, interest will be paid gross to charities and to private trustees where there is no individual beneficially entitled to the income as it arises. Otherwise, the tax deducted is allowed against the tax payable for the year in which the tax is paid. If you are not liable to tax or the deduction exceeds your liability, the tax deducted or any excess may be reclaimed. 2. In the case of joint accounts, certificates of non-liability may be given by one depositor individually but the deposit taker may, upon giving notice to HM Revenue & Customs, disregard such certificate unless all persons beneficially entitled to the payment of interest on the account have given such certificates. 7

10 Select ISA There are no separate administration charges for your Select ISA other than the service charge referred to on page 1. Your holdings will, however, be subject to the fund charges for the IPS portfolio funds referred to on page 2. You will be paid interest on any cash temporarily held in your Select ISA. The details shown below are those in force as at May 2014 but are subject to periodic revision. Interest paid on any cash in your Select ISA will be at the same rate as the gross interest rate paid on the Lloyds Bank Flexible Savings Account (monthly interest option). This rate changes from time to time. For the latest interest rate on this account, please call into any Lloyds Bank branch or visit our website at lloydsbank.com At present we calculate any such interest on a daily basis and pay it quarterly in March, June, September and December. With the Select ISA, interest is paid after deducting the HM Revenue & Customs charge of 20% set out in the ISA regulations. We calculate the interest received from your ISA investments, and then kept in the Income account for your ISA, entirely separately from the interest on any other cash in the Capital account for your ISA. 8

11 Appendix Examples showing when the calculation of the service charge takes place for the Investment Portfolio Service Service Charge Calculation of the first service charge This takes place on the first working day after the 10th of the fourth calendar month following commencement of the agreement and will become payable after that date. In the first year, the service charge will be proportional so that it covers the period from the commencement of the agreement until the first working day after the 10th of the next calendar month following commencement and the forthcoming year after that date. For example: Agreement commences: Monday 1 March (year 1) First service charge calculated: Monday 12 July (year 1) Period of first service charge: Monday 1 March (year 1) until Monday 11 April (year 2) i.e. the first working day after 10 April March year 1 April year 1 May year 1 June year July year Calculation of the second and subsequent service charge In each subsequent year, the service charge will be calculated on the anniversary of the first working day after the 10th of the next calendar month following commencement of the agreement and will become payable after that date. For example: Agreement commenced: Monday 1 March (year 1) Second and subsequent service charge calculated: On the first working day after 10 April March year 1 April year 2 April year

12 Refund of Service Charge on Termination A proportionate refund of the service charge will be made by us on termination for the period from the date of termination until the anniversary of the first working day after the 10th of the next calendar month following commencement of the agreement. For example: Date of last service charge: tuesday 11 April (year 3) Date of termination: Wednesday 1 November (year 3) Refund of the service charge for period: 1 November (year 3) to 11 April (year 4) April year 3 November year 3 December year January year 4 February year 4 March year 4 April year

13 Please go to lloydsbank.com/privatebanking Please contact us if you d like this information in an alternative format such as Braille, large print or audio. If you have a hearing or speech impairment and would prefer to use a Textphone, please feel free to call us on (lines open 24 hours a day, 7 days a week). If you are Deaf and prefer to use BSL then you can use the SignVideo service available on our website lloydsbank.com/signvideo.asp Lloyds Bank Private Banking Limited Registered Office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales No Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under number We are members of the Financial Services Compensation Scheme and covered by the Financial Ombudsman Service. Your call may be monitored or recorded in case we need to check we have carried out your instructions correctly and to help improve our quality of service. Information correct as of May M58561 (05/14)