Your Guide to Investing with Cofunds Version MSM0415 Issued and approved by Cofunds Limited, One Coleman Street, London, EC2R 5AA. Registered in England and Wales No.3965289. Authorised and regulated by the Financial Conduct Authority (FCA) under FCA Registration No. 194734. Updated 04/15
Contents Introducing Cofunds 4 Managing your investments 8 Keeping your investments safe 14 2 Your Guide to Investing with Cofunds
Welcome to Cofunds This guide should provide you with all the information you need to know about Cofunds and how the Cofunds platform works. It explains the features that enable you to manage your investments easily and efficiently in one place and highlights any potential risks you should be aware of. If you have any questions or need anything from us, please contact us. Telephone: 0345 610 5411 Email: moneysupermarket@cofunds.co.uk Address: Cofunds Limited, PO Box 1103, Chelmsford CM99 2XY What else you should read To help ensure you make the right choices for your circumstances, please remember to read this guide alongside the Key Features of the Cofunds Investment ISA. It s part of a set of documents you should read before deciding whether or not to invest. You should also read: Terms and Conditions of the Cofunds Platform If you are purchasing new funds, fund Key Features with generic illustration Copies of all documentation can be provided in a variety of accessible formats. All documentation and communications in relation to Cofunds will be in English. To make it easier for you to get all the information you need, look out for these symbols below... Important Refer to the document Please write to Ring the number provided Go to the website 3 Your Guide to Investing with Cofunds
1. Introducing Cofunds Cofunds a trusted investment partner How Cofunds works for you At Cofunds, we ve been helping people to meet their financial goals since 2001. The company was originally set up with backing from four major fund management groups. Today it comes with the reassurance of being owned by Legal & General, a FTSE 100 financial services company. The diagram shows how the Cofunds platform works: You Your nominated bank account You use this to make payments into, or receive money from, your Cofunds Investment ISA Some platforms are restricted in the products they allow access to (i.e. they are tied to the products provided by their owners). Independent platforms can allow access to products from a wide variety of providers. payment in Moneysupermarket.com payment out Cofunds is a fully independent investment platform. We don t provide advice or sell our own funds, so we are completely impartial. This means you have total freedom to decide on the best options for you. Cofunds does not assess the suitability or appropriateness of investments in relation to your circumstances or make investment recommendations. If you require investment advice please speak to a professional adviser who will charge for the advice. Cofunds Platform ISA Wrapper Protects your investments from tax. You can invest in multiple funds within your ISA Fund A Fund D Fund G Fund H These are funds you can choose from there are over 2,700 available on the Cofunds platform Fund A Fund B Fund C Fund D Yo Fund E Fund F Fund G Fund H 4 Your Guide to Investing with Cofunds
1. Introducing Cofunds (cont.) Benefits of using a platform There are many reasons why it makes excellent sense to use an investment platform. If you are an active investor who enjoys managing their money, using a platform can make it a lot more convenient. If, however, you just like to invest occasionally and leave your money to grow, you ll find that Cofunds still has a lot to offer: Because all your investments are in one place, you can make changes to your portfolio easily and swiftly. Choice in one place, you can get access to funds from a wide variety of providers. This makes it easier to create the portfolio that best matches your needs. Control because your investments are in one place, you can make changes to your portfolio easily and swiftly. This lets you quickly take advantage of new investment opportunities or act if unwanted risks arise. Clarity with a single view of all your investments, you can quickly see how your investments are performing. It s easy to assess the progress of your overall portfolio or individual holdings at any time. Flexibility you can develop and manage your investment plan, which can be as simple or as complex as you need. And you can adjust it whenever you want. Ease instead of receiving paperwork and reports from many different fund groups and product providers, you receive consolidated reports for all your investments. This streamlines your paperwork and simplifies your administration. 5 Your Guide to Investing with Cofunds
1. Introducing Cofunds (cont.) The choice you need to build the right investment portfolio The Cofunds platform is designed to offer you access to a wide range of funds, helping you to create a solution that s exactly right for your needs. What are funds? Funds can offer an easy way to invest, even if you have little investment experience or only a modest amount to invest. Funds pool investors money which is then invested by a professional Fund Manager across a range of different investments, in line with the fund s investment objectives eg income generation, longer term growth or ethical investments only. To give you the investment choice you need, Cofunds offers over 2,700 funds which cover a wide range of investment sectors from more than 150 leading and specialist fund management groups (as at December 2014). Cofunds Cash Account service The Cofunds Cash Account is a service that allows you to temporarily hold money on the Cofunds platform. This gives you the flexibility to move your money in and out of investments without having to take it off the Cofunds platform. Being able to hold money on platform means you can easily make investments, set up pending trades and collect income payments at a time that suits you. See Section 2 to learn more. The value of your investment, and income from it, is not guaranteed. It may go down as well as up and you may not get back your original investment. 6 Your Guide to Investing with Cofunds
1. Introducing Cofunds (cont.) What charges will I pay when investing through Cofunds? We don t charge you extra for investing in funds through the Cofunds platform. You pay the same fund charges when you invest through us as you would if you invested directly with a Fund Manager. The charges you will pay on your investment come from the following: a. Moneysupermarket charges Moneysupermarket charges an annual Service Charge of 0.20% of the value of your commission-free share class investments. This is taken monthly from your Cofunds Cash Account. To ensure that your assets are not sold to supply this monthly charge, you should keep enough money in your Cofunds Cash Account to pay the charges each month throughout the year. b. Fund Manager payments The Fund Manager is responsible for making investment decisions to help ensure the investment meets its goals. Initial charge The amount a Fund Manager charges for your first investment into their fund. This is waived for investments through Moneysupermarket - you will not pay this charge. Annual Management Charge (AMC) Each year, you will pay each of your chosen Fund Managers an Annual Management Charge. The Fund Managers will pass Cofunds a proportion of this charge: see Other payments Cofunds receives. Fund management charges are detailed in individual fund Key Features documents. The illustration in Section c below demonstrates how the charges you pay are divided between the Fund Managers, Moneysupermarket, and Cofunds. The items highlighted in bold are retained by Cofunds. c. Platform charges Some services may have an administration charge. Our standard Platform Charge is calculated annually as 0.25% of the value of your commission-free share class investments held on the Cofunds platform. The Platform Charge is collected monthly. The charges you pay may increase in the future as in accordance with the Terms and Conditions. The amount of Platform Charge you pay will vary depending on the total value of your assets on platform, and how much you have invested in commission-free share class funds. Fund Manager reports and accounts You can download Fund Manager reports and accounts free of charge from https://www.cofunds.co.uk/investors/reports_and_ Accounts_Investors.aspx Shareholder/unitholder meetings For the Cofunds Investment ISA, you have the right to attend and vote at shareholder meetings of companies in which you hold shares. You can request to be notified of voting events, and you can request Cofunds to vote on your behalf. Each request will incur a 20 charge to cover our administration costs. Other payments Cofunds receives Cofunds receives its income from a number of different sources to help provide you with a market-leading service. This pays for the costs of distributing funds through our platform and the associated administration services we provide. 1. The Fund Managers will pass Cofunds a proportion of their annual management charge on assets purchased before 6 April 2014. Cofunds receives between 0.1% and 0.4% of the value of assets in each fund administered by Cofunds, with the average being 0.25%. 2. Interest on money held on your behalf - Cofunds may earn interest on all money held on your behalf, for example, on money awaiting investment. Depending on the type of account in which the money is held, you may be paid a portion of this interest. The rate of interest earned is the current Bank of England base rate minus 0.4%, or zero, whichever is higher. For current rates of interest paid to investors on money held on the Cofunds platform, visit: www.cofunds.co.uk/docs/ cofundsrates.pdf For more information on the charges you pay on your selected funds, please see the Fund Key Features. 7 Your Guide to Investing with Cofunds
2. Managing your investments Paying for your investments Cofunds gives you the ability to pay for your investments with lump sum amounts. Lump sum investments These can be made: From your Cofunds Cash Account By BACS By debit card (if you are paying online). Valuation pricing and dealing cut-off times Units or shares in your chosen funds are bought, sold and switched directly through the Fund Manager through a process of aggregating orders (adding up all individual purchase instructions and all individual sale instructions to come up with a total purchase or sale with that Fund Manager). The Fund Manager calculates the price at which these can be bought or sold at a specific valuation pricing time each business day. To be able to buy or sell at that price, orders must be received by Cofunds by a specified dealing cut-off time. Valuation pricing times and dealing cut-off times vary between funds. Fund Managers price units and shares after the sale and purchase orders of the day have been received and the funds have been revalued (forward pricing), so you will not know in advance what price you will receive. Please see Section A5.4 of the Terms and Conditions of the Cofunds platform for more details. 8 Your Guide to Investing with Cofunds
2. Managing your investments (cont.) How and when your money is invested Changes to my existing investments Cofunds will deal in shares and units in your chosen funds on your behalf. We have a strict procedure when carrying out orders to buy, sell, or switch investments to ensure every trade is dealt with fairly and efficiently: Instructions are processed in the order they are received. However, instructions submitted online may be dealt with sooner than postal applications. (a) Purchases and sales It is Cofunds normal business practice to buy/sell units or shares in funds at the valuation pricing time following receipt of your instruction. This will normally be the same business day, providing the relevant dealing cut-off time is met. However, in some instances, such as when unusually large numbers of instructions are received, your instruction may be placed on the subsequent business day at the next available valuation pricing time. You may still make changes to your investments as normal however, any of the following actions you may make to an existing fund will be considered a change and will mean that new units will be purchased as commission-free share class funds: Any monetary increases to existing investments including one-off lump sums Switching fund units Reinvestment of previously paid-out income. These actions are not considered changes and will not trigger a change to commission-free share class funds: Selling units in a fund A unit conversion, from income to accumulation or vice versa The paying out of previously reinvested income. (b) Switching between funds There may be times when you want to change your investments or take advantage of new investment opportunities. All switch requests should be made online. This includes changing your choice of funds within an ISA tax wrapper. The switch process is in two parts: Firstly, Cofunds normal business practice is to sell existing funds at the next available valuation pricing time following receipt of your instruction, as described in (a) above. Secondly, once we receive confirmation of the sale and price from the Fund Manager, we will normally buy your new funds at the next valuation pricing time, again as described in (a) above. Therefore, while your switch is taking place, your money will not be invested and you will not know in advance what prices you will receive. Please see the Fund Key Features for dealing cut-off times for specific funds. Please note that European public holidays may affect the placement of your deals in European Collective Investment Vehicles (ECIVs). 9 Your Guide to Investing with Cofunds
2. Managing your investments (cont.) The Cofunds Cash Account The Cofunds Cash Account allows you to hold money on the Cofunds platform. It s not an investment product or bank account it s a service that allows you to manage your investments easily and efficiently. By linking your Cofunds Cash Account to a nominated bank account, it s easier for you to make new investments and take withdrawals. You will need to prove that your nominated bank account is in your name. You can do this by sending us an original bank statement for the account, issued in the last three months. Copies or statements printed off the internet must be certified by a suitable person employed in a public regulated service / profession. Alternatively, you can send us a void cheque (i.e. an unsigned cheque with the amount marked void ) for the nominated bank account. We open a Cofunds Cash Account for you as soon as we accept your application to invest on Cofunds. You can deposit money in a Cofunds Cash Account from your nominated bank account using BACS. Key benefits: Pay your intermediary if your intermediary is using the Cofunds Platform to pay for services Cofunds will fund these charges from your Cofunds Cash Account. If there are insufficient funds in your cash account to cover your charges this may result in your investments being sold to pay the difference. Time your investments by holding money in your Cofunds Cash Account, it is readily available when you want to invest. Collect income you can choose to use your Cofunds Cash Account to collect income paid out by your investments. This can then be used to pay you regular withdrawals. For current interest rates on the Cofunds Cash Account go to: www.cofunds.co.uk/docs/cofundsrates.pdf 10 Your Guide to Investing with Cofunds
2. Managing your investments (cont.) Managing your investment income If you hold investments that generate an income, you have the freedom to choose whether income is held on the platform for future use, or reinvested. Income vs. accumulation shares Most funds offer a choice of accumulation units/shares or income unit/shares. Accumulation units/shares any income earned on your investment is not paid out. Instead it accumulates within the price of the unit or share, increasing its value. Income units/shares income is paid out. This can be paid into an external bank account or reinvested to buy more units or shares, thereby increasing the number of units or shares you hold. a. If you want income to be paid out to you Consolidated monthly income income from the funds within your ISA can be pooled and paid out to you as a single convenient monthly payment. To do this you will need to nominate a bank account into which payment can be made. All income received in the previous month will be paid to you on or shortly after the seventh business day of the month. Any income waiting to be paid out to you will be held securely in a client money account called the Consolidated Income Account, where it will earn interest. Interest of less than 1 a month is not paid. b. If you want to hold income on the platform Income from your ISA can be paid into your Cofunds Cash Account, which means the money stays on the platform. It s made available shortly after it is received from the Fund Manager and not consolidated into a single payment. Once available you could use it to fund new investments or as you wish. c. If you want to reinvest income If you want to reinvest income, you can choose to hold accumulation units/shares. Or if you hold income units/shares, you can request that income is reinvested to buy more units/ shares in your chosen fund. Some Fund Managers allow you to convert from accumulation to income units/shares (and vice versa) for the same fund, at no charge. Income choices You can choose whether you want to payaway (this is a technical term to describe taking income - whether as consolidated monthly income or holding income on platform) or reinvest your income when purchasing an income fund. We apply this income choice to all funds within a product. This means that all income generated by income funds within your ISA will be either reinvested or paid away to you Income mandates Your income mandate determines what you want to do with the income which you have chosen to payaway either hold on platform or take as consolidated monthly income. See Section A7.1 of the Terms and Conditions of the Cofunds Platform for more information. As part of setting you up on the Cofunds platform we apply a default payaway income mandate of hold on platform. This means that unless you select an alternative income mandate when carrying out your first transaction, your income mandate will be hold on platform and any income subsequently received will be paid into your Cofunds Cash Account. To amend your income mandate you need to go to the Account Maintenance section of the Cofunds Microsite and choose accordingly. For current interest rates on the Consolidated Income Account, go to: www.cofunds.co.uk/docs/ cofundsrates.pdf Please remember that once income is taken out of an ISA, it will no longer be sheltered from tax. Any further interest earned on it for example in the Cofunds Cash Account may be taxable. 11 Your Guide to Investing with Cofunds
2. Managing your investments (cont.) Accessing your money Cofunds makes it easy to make one-off withdrawals from your investment at any time. i. From your investments You can receive your money in two ways: Into your Cofunds Cash Account withdrawals can be available in your Cofunds Cash Account within five business days of the last fund being sold. This type of withdrawal request can be done online at https://moneysupermarket.cofunds.co.uk Into your validated nominated bank account payments will be made to your nominated bank account by BACS within five business days but may take up to eight business days in total to reach your account. This type of withdrawal request must be made in writing. ii. From your Cofunds Cash Account You can withdraw money held in your Cofunds Cash Account at any time by writing directly to Cofunds. Instructions are processed within one business day of receipt and the money is transferred by BACS to your nominated bank account within five business days, but may take up to eight business days in total to reach your account. To help you provide the correct information so we can process your withdrawals please email us at: moneysupermarket@cofunds.co.uk or call us on 0345 610 5411 and request a Withdrawal Instruction Form. The unit calculator tool On the Cofunds Microsite, you will be able to use our unit calculator tool. Instead of having to input a particular number of units to sell, you can choose the option of specifying a total amount of cash you d like to raise from a sale. You can then choose how you d like this amount raised by entering the percentage of this amount you d like to raise from each fund you re selling. We ll use this information to calculate the amount of units which need to be sold from each fund in order to raise the specified amount of cash. Please note that due to forward pricing of funds (see page 8 above) and market movements, you will never receive the exact amount you specified. However, in order to prevent a shortfall, we use an estimation process which involves selling an extra percentage over the amount you ve specified although if markets fall sufficiently, a shortfall is still possible. We don t apply an additional percentage to sales from ISA Cash Reserve. All money raised from the sale (including any excess) will be paid into your cash account. To make a withdrawal, you need to specify an exact number of units, or a percentage: we cannot accept requests to raise a specific cash amount. You also need to specify the full fund names. Remember, if you withdraw money from your ISA your remaining ISA allowance remains the same you can t reinvest that money in another ISA. 12 Your Guide to Investing with Cofunds
2. Managing your investments (cont.) Keeping track of your investments We designed the Cofunds platform to make it as easy as possible for you to keep track of your investments and see if you are on course to meet your financial goals. Cofunds will send you: Confirmation notes these are sent to you each time investments are bought, switched and sold If you register online you will have access to a copy, via your online account, as soon as it is produced. Annual statements provide information on the value of your investments, the transactions that have taken place since your last statement and any income received. Consolidated confirmation notes detailed transactions that aren t included on standard confirmation notes, including any reinvestment of income shares or units, are provided on a consolidated confirmation note. We send this to you halfyearly. We also include this information on your annual statement. Your statements are available to view online via the Cofunds Microsite. Corporate actions/changes to funds Cofunds will write to you to inform you of any actions proposed by the Fund Managers on funds that you are invested in, such as a change in investment objective. Reports and accounts you can download copies of fund reports and accounts free of charge at: https://www.cofunds.co.uk/investors/reports_and_ Accounts_Investors.aspx You can also check fund prices daily. These are available in newspapers and online at: www. investmentuk.org/investors 13 Your Guide to Investing with Cofunds
3. Keeping your investments safe Holding your money and investments Compensation Cofunds is committed to ensuring that money and investments held on the Cofunds platform are secure at all times. In line with Financial Conduct Authority (FCA) rules, all client money or investments held with Cofunds are completely segregated ( ring-fenced ) from Cofunds own money and assets. This means they cannot be accessed by Cofunds should the company fall into financial difficulties. Money money held on the Cofunds platform is held securely in a client money account at selected banks. Investments once money is invested with a Fund Manager, units and shares in the funds are registered in the name of Cofunds Nominees Limited a fully-owned subsidiary of Cofunds. This ensures that assets are securely segregated from Cofunds own assets. Holding all clients assets with a nominee also streamlines administration and enables Cofunds to transact efficiently on behalf of clients. Cofunds keeps a record of your individual holdings. You remain the beneficial owner of these assets. Cofunds Nominees Limited is not authorised by the FCA, but Cofunds Limited accepts full responsibility for its subsidiary. Cofunds is covered by the Financial Services Compensation Scheme (FSCS). You may be entitled to compensation from the scheme if Cofunds cannot meet its obligations. In general this is when a firm has stopped trading, and has insufficient assets to meet claims, or is in insolvency. This depends on the type of business and the circumstances of the claim. Most types of investment business are covered up to a maximum compensation of 100% of 50,000. Conflicts of interest There are some situations where the activities and interests of a company may conflict or potentially compromise the best interests of its customers and clients. We are committed to making clear all activities or situations that could give rise to a conflict of interest. The company aims to minimise conflicts as far as possible. Where conflicts cannot be removed, we try to manage them in the best interests of our clients. For details of the banks Cofunds holds money with, go to: www.cofunds.co.uk/docs/ cofundsrates.pdf For details on the Financial Services Compensation Scheme (FSCS), in relation to Cofunds and any product available on Cofunds go to: https://www.cofunds.co.uk/docs/ gbub/assetprotect For further information about the Financial Services Compensation Scheme (FSCS), please contact the FSCS: Financial Services Compensation Scheme 7th Floor, Lloyds Chambers, Portsoken Street, London E1 8BN www.fscs.org.uk Tel: 020 7892 7300 14 Your Guide to Investing with Cofunds
3. Keeping your investments safe (cont.) Complaints Moving your investments off the platform If you have a complaint about Cofunds, you can contact Cofunds directly by emailing us at moneysupermarket@cofunds.co.uk calling us on 0345 610 5411 or writing to the Head of Customer Experience, Cofunds Ltd, PO Box 1103, Chelmsford CM99 2XY. We are open Monday to Friday 9am 5pm. Calls may be recorded for training and quality purposes. At Cofunds we try to resolve issues quickly and efficiently. If you feel unsatisfied with the way a problem is handled, you can take your complaint to the Financial Ombudsman Service. If you have a complaint relating to an investment fund, you should contact the fund manager in question. Details of Cofunds conflict of interest policy can be found at: www.cofunds.co.uk/docs/coi.pdf Details of our complaints policy can be found at: http://www.cofunds.co.uk/docs/customercomplaints.pdf The Financial Ombudsman South Quay Plaza, 183 Marsh Wall, London E14 9SR Email: complaint.info@financial-ombudsman.org.uk Tel: 0345 080 1800 You are entitled to move your investments off the platform in accordance with your Terms and Conditions. Assets held within an ISA wrapper can be re-registered within the ISA, preserving your market holdings and the tax benefits of the ISA. Alternatively, for the ISA you have the option to sell the assets and transfer as cash. Any questions? We hope this introductory guide has been useful in informing you about the Cofunds platform and how it can support you. If you have any queries about any aspect of Cofunds service, contact our Cofunds Service Centre If you would like to contact Cofunds directly, please write to the address on page 3. 15 Your Guide to Investing with Cofunds
MS2 04/15