Investment Dealing ISA SIPP Investment Plan Investing for Children

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1 Investment Dealing ISA SIPP Investment Plan Investing for Children

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3 Contents Introduction 3 How can you help me manage my investments? 4 How can I invest? 5 The Investment Plan 6 The ISA 7 The Select Pension 9 What can I invest in? 10 How do I buy and sell investments? 11 How will you keep me informed? 12 How do I apply for a Plan? 13 What if I have any questions? Tel contact@alliancetrust.co.uk

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5 Introduction Managing your own investment portfolio can be extremely rewarding but also time consuming if you re dealing with different companies and endless amounts of paperwork. At Alliance Trust Savings Limited (Alliance Trust), we can help you manage your investment portfolio more efficiently through our great value, costeffective dealing and administration service. We take the chore out of investing so you can spend more time on your investment decisions and managing your money. We all have different reasons for investing. You might be saving for a deposit on a holiday home, education fees, a rainy day, looking to boost your income or to make the most of ISA and Pension tax advantages. We provide a range of self-select plans (Plans) including tax-efficient ISAs and self invested personal pensions (SIPPs) as well as wrappers such as the Investment Plan for consolidating your stocks and shares or First Steps - Investing for Children, a Plan where you can save for your children or grandchildren. Our Plans are for people who are comfortable making their own investment decisions. You select and manage the investments and decide on the level of risk you are exposed to. Our focus is to provide you with selfselect plans that combine excellent value and exceptional customer service. The benefits of investing using an Alliance Trust Plan are No set up or annual plan charges. Low dealing costs. Deal online, by post or telephone. Over 3,000 UK listed securities to choose from. Flexibility to switch investments. One view of all your Plans online and by quarterly statements. Valuations of all your Plans when you want via our new online service. A dedicated customer service team. In addition to being able to buy or sell an investment in your Plan at the same time, or separately, our new online share dealing service also offers you free research tools where you can research the market before making your decision to invest. This brochure is for information only. It should not be seen as a specific recommendation to use a Plan. 3

6 How can you help me manage my investments? Manage your investments with one provider If you hold investments with a number of different providers you will probably receive various statements throughout the year. This can make it difficult to evaluate your total investment portfolio. Transferring your investments and plans to Alliance Trust allows you to manage your portfolio with one provider but still have the choice of what you want to invest in. We make no charge for transfers into the Investment Plan, First Steps Plan or ISA and you could save money with us if your current provider charges an annual fee. We will send you a quarterly summary statement and valuation for all your Plans and if you are registered to use our online dealing service you will also be able to view all your Plans with us and get a valuation at any time. Investment choice and flexibility We all have different investment objectives and views on risk and reward which is why we give our customers an extensive choice of investments so you can build your portfolio around your specific needs and as your needs change you can adjust and manage your investment portfolio to suit. You can choose to invest in investment trusts, equities, gilts, corporate bonds and other collective investments including OEICs, unit trusts and exchange traded funds. You are able to switch between investments to meet your changing needs. You can do this online, by telephone or by post. If you use our online dealing service to switch then you can sell a holding and purchase a security at the same time. Using one screen, real-time, you confirm the price you wish to deal at. No annual fee and low dealing costs At Alliance Trust we don t charge you an annual fee for administering your investments and there are no set up costs. (There are fees applicable when withdrawing an income from the Select Pension.) Because we operate a transaction based charging system: you only pay for the services you use#. You can choose to deal on a daily basis by post or by giving us an instruction to deal by telephone, or real-time using our online service. You can also quickly and easily move money between accounts within your Plan for free, if you effect the transfers in real time, online. By pooling customers orders together for execution on a weekly basis, we can offer very competitive weekly dealing charges. You may have plans with other providers where you are paying an annual charge for each plan. By transferring all those plans to Alliance Trust you should benefit as you will no longer have to pay annual charges. Helping you make decisions To help you make your investment decisions there are research tools at Alliance Trust Online where you can access broker recommendations, company information and a range of charting tools. You can also get price alerts by for any investment you choose and you can set up watch lists to track a set of shares you want to monitor. Customer service We pride ourselves on providing excellent customer service. When you become one of our customers there is a dedicated Customer Services team only a telephone call away should you have any queries. We will ensure you experience a friendly and efficient service. # Please refer to the Charges Schedule for further information. 4

7 How can I invest? Depending on your circumstances you can choose to invest through one or more of our Plans including: Investment Plan ISA Select Pension First Steps investing for children The Plans have all been designed to give you flexibility and freedom to invest where and when you want. Whether you are looking to make new subscriptions or want to transfer existing arrangements to us, we can make it easy for you to manage your money. How much and when can I invest? Our Plans offer a range of flexible subscription or contribution options and you can invest from as little as 50. You can: drip feed your money from your Plan deposit account monthly, quarterly or six-monthly with our phased investment option. Transfer investments to us You can transfer any existing investments to us. We make no charge for transfers to the Investment Plan or ISA. Not only will this streamline the administration of your investments but with no set up or annual charges it could also save you money. Although there is no transfer-in charge (except for the Select Pension), you still have to pay the charges for the investment of cash received as a transfer. You may also have to pay your previous provider s exit charges. Please make sure you assess the total cost to transfer and compare that with cost savings and other benefits before you decide to transfer. make subscriptions or contributions online using your debit card make regular subscriptions or contributions by direct debit make single payments by cheque, or 5

8 The Investment Plan The Select Investment Plan is the most versatile of our Plans and can be used for many purposes including: Personal Savings - By putting extra money away in an Investment Plan, for example, if you are saving for a luxury holiday or to buy a holiday home. Consolidate an existing portfolio - You can transfer in securities you hold to us, bringing all your investments under one roof. Shares can also be gifted into an Investment Plan. We make no charge for this. Plan for school and university fees - The Investment Plan can be a useful way to invest for these fees and help you plan to meet the growing cost of higher education. You can draw on the funds as and when needed. Hold the investments of a trust - You can hold the assets of a charitable or private trust in an Investment Plan. Although you will need to consult a solicitor to establish the trust, once created the trust investments can be run efficiently and cost-effectively through the Select Investment Plan. There is no restriction on the amount you can subscribe, or transfer, to the Investment Plan. We handle all investment administration and provide you with consolidated portfolio statements and valuations by post. You can also get up-to-date valuations online at any time. We will collect all dividends on your behalf and, for no extra charge, we will provide you with a single consolidated tax certificate and an income schedule at the end of the tax year for your tax return. For information on First Steps - Investing for Children please call us on for a separate information pack or visit our website. The Investment Plan at a glance: Regular and single subscriptions Maximum subscription limit Transfers in Tax advantages Consolidated statements and valuations Deal online, by post and telephone Yes No upper limit Yes No Yes Yes 6

9 The ISA You can subscribe to both a Cash ISA and a Stocks and Shares ISA with Alliance Trust Savings. Holding investments in an ISA remains very tax efficient, with no Capital Gains Tax to pay, no additional tax to pay on income, and you don t have to mention it on your tax return. What s more, the new ISA rules have provided even more flexibility for savers. For the first time you can transfer from a Cash ISA to a Stocks and Shares ISA meaning you can diversify your assets and benefit from potentially higher returns offered by stocks and shares over the medium to long term. Tax benefits Capital Gains Tax all gains on investments held in an ISA are completely free of tax. Income tax there are significant benefits, especially for the higher rate tax payer: Dividend income attracts no further taxation All income from interest bearing securities is free from tax Interest earned in a Cash ISA is completely tax free Subscription Limits From 6th April 2008 the overall subscription limit increased to 7,200. You may invest the full amount in a Stocks and Shares ISA, or up to 3,600 in a Cash ISA with the remainder in stocks and shares. The Select ISA at a glance: Regular Maximum Deal online Type and single subscription Transfers Tax by post and of ISA subscriptions limit in advantages telephone Cash Yes 3,600 Yes Yes Yes Stocks & Shares Yes 7,200 Yes Yes Yes The following table illustrates how you can increase your income by holding investments in ISAs: Income received Outside Inside Increase ISA* ISA* Net dividend of 90 Higher rate taxpayer % Basic rate taxpayer Gross interest distribution of 100 Higher rate taxpayer % Basic rate taxpayer % * based on 2007/2008 income tax rates 7

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11 The Select Pension This investment dealing self-invested personal pension (SIPP) offers exceptional value and flexibility. You can make contributions when you want and you are not penalised for stopping or varying the amount you put in. If you are under 75 you can get tax relief on contributions of up to 100% of your UK earnings. And even if you don t have earnings you can still have a SIPP and get tax relief on contributions of up to 3,600 gross each year. A SIPP can also be used: to consolidate existing pension arrangements into one place; and as a top up pension (you can also invest in a SIPP even though you have an existing pension in place through your employer). When do you need a Select Pension? You can be building up a fund for your retirement, looking to transfer a number of existing pensions into a single plan or you may be approaching retirement and want the flexible income options that a SIPP offers. It may be that you wish to contribute to a pension for your spouse, child or grandchild. You can invest from as little as 50 in a Select Pension and if you are under 75 and a UK resident you can benefit from tax relief on the personal contributions you make. The Select Pension also allows your employer to make contributions. There is no income tax (other than the 10% tax credit on UK dividends) or capital gains tax on investments held in the Select Pension. You can take benefits at any time from age 50 (55 from April 2010) and can normally receive up to 25% of the fund you use for benefits as a tax-free lump sum. With the remainder you can purchase an annuity from an insurance company of your choice or leave your fund invested and withdraw an income directly from it. Like our other Plans there are no set up or annual charges, except when withdrawing an income from the Select Pension, and you can manage your Select Pension online, by post or by telephone. You can also apply for a Select Pension online by registering to use our online service, Alliance Trust Online. For further information on the Select Pension please call us on for an information pack or visit our website. The Select Pension at a glance: Regular and single contributions Tax relief on contributions Transfers in Consolidated statements and valuations Deal online, by post and telephone Yes Yes (limits apply) Yes Yes Yes 9

12 What can I invest in? Within our Plans you have complete control over your investments so you can develop an investment strategy to suit your own needs. We have a wide choice of investments allowing you to choose from different asset classes and geographic locations to help you build and maintain a diversified portfolio. You are not restricted to the investments offered by a single provider. Instead you have the freedom to invest in around 3,000 securities. You can also hold cash on deposit until you have decided which investments you would like to make. You may choose UK shares including investment trusts, which are listed on the London Stock Exchange - This excludes shares whose primary quotation is not sterling, those that cannot be settled through CREST and, in the case of the ISA, those that are not ISA eligible. AIM Securities - Not eligible for investment in the ISA Exchange Traded Funds UK listed gilt-edged and fixed interest securities - Not all fixed interest securities are ISA eligible. Only those with at least 5 years to run until maturity may be held in an ISA. Gilts can only be purchased in multiples of 1 nominal value. Gilt strips may not be held within the Plans. Open ended investment companies (OEICs) and unit trusts - You may invest in a range of funds from selected fund managers. These managers are currently: AEGON Cazenove Fidelity Gartmore Insight Investec Legal & General M&G New Star Norwich Northern Trust Old Mutual Schroder Threadneedle If you wish to purchase from a manager not listed please contact us. Certain securities may only be purchased through Alliance Trust Savings by individuals who are British citizens, British Dependent Territories citizens or British Overseas citizens by virtue of the British Nationality Act Please note you may not directly purchase warrants or derivatives within the Plans. You can find published lists of securities in various daily newspapers, however if you have any queries about the availability of any investment, or if you require any further information please call us on or contact@alliancetrust.co.uk. 10

13 How do I buy and sell investments? Buying and selling investments through Alliance Trust is straightforward and easy. You can deal online, by using our telephone service or by post. You chose which way you would like to buy and sell investments, whichever way is most convenient for you. Online If you use our online service to buy and sell investments you can trade at any time the market is open, real-time. You can also place an order when the market is closed for trading the following day when the market opens. You can place a limit order where you can buy a security at a price no higher than you specify, or sell at a price no lower than you specify (within an expiry period of up to 30 days). All dealing will be made from your dealing account within your Plan. You can add to your dealing account before you trade by using your debit card to subscribe online. Telephone and post You can buy and sell by telephone using our telephone service. To do this you will need a Personal ID and PIN (the same ID and PIN that you have for using the online service). Or you can use the postal option to buy and sell. Provided we receive your instructions by 10.30am on any business day you can tell us to deal that same day. For postal trading you can also instruct us by fax. Please note that OEICs and unit trusts will be purchased and sold the next day. You can also use the weekly dealing service which is an automatic and cost effective option. Regular saving You can save regularly using the online service or by telephone or post. If you are using our online service you can set up and manage direct debits into your Plan easily by using the Manage your Plan tab once you have logged in. You can also set up a direct debit to your Plan by post. All regular saving by direct debit are invested using the weekly option. Dividend reinvestment Our automatic dividend reinvestment service is really popular. We will collect dividends and other income on your behalf. If you use the telephone or postal service we will automatically reinvest your dividends and income into the same security unless you tell us to reinvest it into another security. If you use our online service and purchase a new security or investment the dividend will be automatically allocated into your dealing account within your Plan, ready for you to make a further trade at any time. 11

14 How will you keep me informed? Our range of Plans has been designed to make investing easier for you and to ensure managing your portfolio is as straightforward as possible. To allow you to keep track of your investments we provide all Plan holders with: Quarterly statements and valuations. If you have more than one Plan with us your statement and valuation will show your investments across all your Plans. This includes the Select Pension, our investment dealing self-invested personal pension (SIPP). You can also get an up to date valuation of all your Plans with us at any time using our online service. Alliance Trust Online In addition to consolidated statements and valuations and the ability to trade online, you can keep up to date with the market through the research available at Alliance Trust Online. Corporate actions If one of the companies you invest in is subject to a corporate action, such as a takeover, we will take your instructions and implement them on your behalf. A contract note every time you make a sale or purchase. If this is done online it will be ed to you. If you have an Investment Plan you will also receive: A consolidated tax certificate. An income schedule of all the dividends and interest collected on your behalf. 12

15 How do I apply for a Plan? In an application pack you will find: Application form(s) - an application form for each Plan requested. Important Information & Terms and Conditions booklet and Charges Schedule - please read these carefully as they form the terms and conditions of the Investment Plan and ISA and explain the services which we provide. Direct Debit mandate - please complete if you want to make regular subscriptions to the Investment Plan or ISA. Remember you can set up and manage direct debits online if you prefer. Interest rate sheet - details of the interest rates currently payable on cash held on deposit. If you wish information on the Select Pension or First Steps - Investing for Children please call What do I do next? When you have chosen the Plan(s) for you please: Make sure you have read and understood the information in the pack. You can also find copies on our website. Apply Online Go to our website and click on sign up now to complete the application form online. Once your application has been accepted you will automatically be sent a Personal ID and PIN separately so you can operate your Plan. Apply by post Complete the appropriate application forms. Return your application and cheque, direct debit mandate or transfer instruction in the envelope provided to: Alliance Trust Savings Limited PO Box 164 Meadow House 64 Reform Street Dundee DD1 9YP Contacting us If you require more information and you re not already a customer, please call our enquiry team on or visit our website. If you already have a Plan with us please contact your dedicated customer services team on contact@alliancetrust.co.uk Web Telephone calls may be recorded for training and security purposes. 13

16 This literature is printed on paper made from trees grown in sustainably managed forests. Alliance Trust Savings Limited, PO Box 164, Meadow House, 64 Reform Street, Dundee DD1 9YP. Tel +44 (0) Fax +44 (0) Web For security and compliance monitoring purposes telephone calls may be recorded. Alliance Trust Savings Limited is registered in Scotland No. SC98767, registered office as stated above; is authorised and regulated by the Financial Services Authority whose address is 25 The North Colonnade, Canary Wharf, London E14 5HS firm reference number ; gives no financial or investment advice. WT57686 (April 2008) 56