Wealth Management and Investments
Case Study: Wealth Management Advice Services
Charlotte engaged the services of ASPL for wealth management advice after she had inherited a sizeable fortune. She was considering emigrating, and purchasing a number of properties where her children lived, in Asia, Australia and London.
She wanted to invest on a long-term basis, but also required a flexible, sizeable capital withdrawal facility to enable property purchases to be made, as and when she wanted.
Charlotte did not want to take much risk with the portfolio, and wanted income/capital withdrawals to be paid into her Guernsey bank account(s).
We have managed her capital and income without giving rise to any taxation liabilities, to date, and provided her with a suitably flexible and diverse portfolio, that meets her needs.
NB. Whilst the Client names have been changed for Client privacy purposes, these case studies are actual ASPL Client case studies.
Investing for You
You may have already accumulated a variety of investments and savings policies over the years and may now either require professional advice, require consolidation, consider alternatives, or simply want your existing portfolio managed and monitored.
You may be investing for the first time and require guidance. Should you be looking at Cash ISAs? Stocks & Shares ISAs? Or a Pension? Should you be paying down debt in the first instant?
ASPL currently look after in excess of £80 million (2010/11) and we believe that when the value of your investment portfolio or Cash is at a certain size then a so-called “Wrap Account” is the best way to arrange, manage and monitor your wealth.
Please ask us for details about our Wrap Account (which can also be combined with other family members).
Investing for your Children
There are a number of good Bank Deposit accounts for children.
Parents should also consider National Savings, depending upon rates at the time.
For much longer term investment, parents should also consider a pension fund, whereby a one-off lump sum or regular contributions can be made. This of course will give children typically a 20-30 year head start upon parents’ retirement savings.
Child Trust Funds (to children born on or after 3rd January 2011) and Junior ISAs will become an important savings vehicle for children.
People are able to invest via Cash or Stocks & Shares Junior ISAs with a total yearly limit of £3,600 for all payments into these accounts.
The Junior ISAs will become (adult) ISAs when the child reaches age 18, therefore these will be a useful tax-free way to save for your children’s future.
Children have a personal tax-free allowance each year (currently £7,475 for 2011-12), i.e. they can earn income (including interest) up to this amount within the year without paying any tax.
Please note that if you give money to your children, or you invest it for them, you may have to pay tax upon any interest earned. Please speak to us for specific advice.
Investing for your Grandchildren
You can give as much as you like to your grandchildren or other people’s children. The interest won’t be taxed as your income. However the children may be eligible to pay Inheritance Tax on the amount they receive and pay tax upon the interest from the income of their savings. Therefore please speak to us about which route you take, or indeed whether you wish to consider investing via a Trust.
Investing for your Business
Businesses often accrue monies under deposit either because they are awaiting an investment opportunity or sometimes because they simply do not know what to do with it. There are a number of options open to businesses.
Investing company money that has built up within a business bank account poses a challenge to Company Directors. Whilst we are all familiar with Deposit Savings Accounts, rates of interest are particularly poor at the current time (2011/12) but nevertheless it pays to shop around.
For longer term investment, Corporate Investment Bonds are available although different tax rules apply depending upon your accounting basis: if the company operates on a “fair value” accounting basis, Corporation Tax will typically be due on any increase in the value of the Bond from one year to the next. Those companies that apply the “historic cost” basis will continue to benefit from tax deferral in respect of the Bond (this is because the original value of investment is normally shown on the balance sheet each year until the Bond is finally encashed). This historic cost basis therefore gives you tax planning advantages as you will be able to control the point at which tax is paid. Also you will be able to control cash flow by taking profits from the Bond in a year when overall profits are lower.
Pension Schemes
As opposed to paying contributions yourself as an individual, have the company invest the pension contributions on your behalf (making sure that you follow the “wholly and exclusively” HMRC rulings).
It is particularly useful to have the company pay the pension contributions when, for example, your salary is kept low because most of your remuneration is taken via dividends.
There is more information on our retirement and pensions planning pages but this requires specialist advice and so please contact us.
Investing for Trustees
ASPL run investment portfolios for many Trustees, whether these be family Trusts or groups of Trustees.
Our specialist investment advice service for Trustees helps to ensure the Trustees meet their Trustee Act 2000 obligations. Trustees must seek professional advice before exercising any powers of investment, or when reviewing the Trust investments. They must keep the investments under review. They must consider the need for appropriate diversification of investments etc.
We typically deal with Trustee monies of up to £5 million and are happy to refer larger Trusts to professionals.
Whether you wish us to take over an existing Trust investment, or whether the Trustees are considering investment of Cash deposits for the first time, please contact us for advice.
People
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Adrian is a Certified Financial Planner. He established Adrian Smith & Partners Ltd. in June 1999. His qualifications include Certified Financial Planner (CFP), Financial Planning Certificate (FPC), Advanced Financial Planning Certificate (AFPC), Securities Institute Foundation Certificate, Dip PFS.
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Ivan is a Certified Financial Planner and joined ASPL in 2003. His qualifications include: Certified Financial Planner (CFP), Advanced Financial Planning Certificate (AFPC), Financial Planning Certificate (FPC), G60 Pensions.
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