Intelligent Money - your investment questions answered

[Intelligent Money]

tone said:

Possibly a daft question, but I'm about to go into retirement and I'm wondering about the access to the 'tax free' 25%.

I don't seem to be able to find a clear answer to this question: If I take less than 25% on day 1 and leave the balance invested, can I take an additional tax free lump once I've started drawing down income? Or am I limited to having an element of each 'income' slug treated as tax free?

Not a daft question at all, in fact a very good question and one that I'm not surprised you can't find a clear answer to.

It is an area that the tax office is also vague about and is often subject to change.

The legislation is open to interpretation so different providers take a different view and as such the answer will vary depending on who your pension is with.

In our case we will pay your tax-free lump sum (or portion of) as one payment and then any regular income will be treated as income. You are then able to draw the remaining part of your lump sum when you request it.

We will normally remind you that you have a remaining balance of tax-free cash available every six months as there is always the possibility that you may lose the ability to draw it should the legislation vary in the future.

Other providers may also take this approach while some may treat each payment as partly income and partly tax free cash until your 25% is used up.

The only way to be sure what approach your provider takes is to contact them directly.

I hope that this helps

Regards

Nik

[Intelligent Money]

tone said:

Thanks Nik, does that mean that you hold the undrawn tax free lump in a designated but separate account, which would still accrue returns in line with the chosen portfolio?

The remaining funds are all held as part of the same account and remain invested in your portfolio. At the time that you request additional tax free cash we run the required calculations to make sure that your entitlement has not been exceeded and then make payment and update HMRC.

Regards

Nik

[Intelligent Money]

DibblyDobbler said:

Hi IM.

Can I ask a related question please?

Just say I had £800k at retirement - I'm entitled to 25% or £200k TFC I believe.

So I immediately take £100k (for the Aston + a cruise or whatever) - ie half of my entitlement (or 12.5%)

Then a year later I want to take the rest of my TFC - my fund has gone up 10% in the meantime (ie £700k to £710k) - so is the remainder of my TFC £100k or is it 12.5% of £710k ?

Cheers


PS - thinking about it it must be the former as the latter would be silly? Anyway please can you confirm

It's always easier to answer a question when you have answered yourself! It is the former because the later would be silly!

At the point you start drawing benefits the fund value at that time is used to calculate your TFC entitlement

Regards

Nik

[Intelligent Money]

Hello crouching pigeon

You are right that this only applies if you crystallise the whole pot and I am guilty of oversimplifying my original answer on the assumption that this was the case.

You could split the pot and keep part of it uncrystallised. You could gain additional TFC if the markets move in your favour but you could also lose out on TFC if the markets fall.

Part of our Private Client Service is to go through the options available and talk you through the advantages and disadvantages of each so you can chose the route best suited to you.

Your last question is one that I can give a simple answer to yes we do offer flexi-access drawdown.

Regards

Nik

[Intelligent Money]

With the above in mind, especially with the turmoil at the moment, does IM offer the ability for me to park mine and Mrs S's 2018/19 ISA allowance while I figure out what to do?

Hello Sheepshanks,

Yes we do have the ability to park your allowance for you.

When you make an ISA application you will need to chose an indicative portfolio but add a note in the notes section to say that you would like your investment to be held in your cash account pending further investment instruction.

We will then hold your money in the cash account until you instruct us to invest. At that time you just need let us know how much and into which portfolio and we will action that for you.

As PH member you will have no initial charge applied so the full value of your investment will be held in the cash account for you.

Nik

[Intelligent Money]

Converse2020 said:

Hi IM team.

Further to separate thread about new personal pension here (https://www.pistonheads.com/gassing/topic.asp?h=0&t=1799331&mid=414148) where I was looking for confirmation I could help offset tax liability can you please offer some advice on best options to discuss this with you?

- I need to do this this week to ensure tax benefit in 2018/2019 tax year.

Thanks

Hi Converese2020

Happy to take you through the options that our Private Client service offers. You can find more about the service here https://www.intelligentmoney.com/private-clients/ or contact me at [e-mail] and I can find out a little bit more about what you are looking for and we can look at the options for you.

Regards

Nik

[Intelligent Money]

Richard-G said:

Just like to say thanks to Nik and the team for helping me set up my IM pension. Genuinely impressed with the personal service i received and the whole set up process was very simple. After a lot of reading on the subject IM proved to be the logical choice for me.

I have one (very) basic question regarding the hmrc top up (the pay in £100 get £25 from hmrc thingy!)

When does this get paid in to the fund? Is it monthly or once a year?

Im only asking this on here and not to Nik direct as it will answer the question for me and any other luddites like me as i couldnt find an answer on the interwebs.

Hi Richard,

Thank you for your feedback, I'm glad that we have been able to help and that you found the service and process easy to use and helpful.

I'm on hand at any time you need me so please feel free to get in touch any time you need to.

Nik

[Intelligent Money]

tighnamara said:

Hi Julian,
Looking at making contact for a chat on possibly moving funds. Is it possible to arrange this for an evening or weekend rather than during the working day.

Thanks

I just wanted to add that our Private Client Service is about being flexible to fit in with what works for you. We are will happily talk in an evening or weekend, we will work around what works best for you.

Nik

[Intelligent Money]

Nik

[Intelligent Money]

BlackR8 said:

I wanted to add in my personal experience of IM.

First of all I am a complete novice in respect to all matters financial , and never previously consulted any professional financial advice and hence have made decisions which frankly today I look back and think were ill informed to say the least. So a couple of months back I decided I need to at the very least seek some advice on how I can be more pro-active with my finances and related matters.

I decided to give IM a shout. Having first exchanged a couple of emails with Julian I set up some time with Nik who came to see me in person. Nik spent quality time with me asking me all the right questions to provoke responses which ultimately were about me deciding where I wanted to be and methods I may want to consider to get me there. The whole experience felt personal, not rushed at all, and I didn’t get any sense of Nik trying to ‘upsell’ any of the IM offering as part of the conversation. Nik also helped me setup my first ever ISA (I did say I have been useless in financial planning upto this point!). I think a big advantage with IM is the fact that I feel I can call Nik at any point if I needed either information or wanted to run something by him to test my thinking.

Worth noting that I have also met a IFA for the first time and whilst the experience was similar to that of my meeting with Nik, I didn’t feel
at this stage I was prepared to pay the upto 3% fees for the initial advice (and then subsequent ongoing fee yearly). I am starting off very slowly so I feel sufficiently informed from my conversations with Nik on some more immediate steps I will take.

….so far so good.

Its was good to meet you and I'm glad the meeting gave you the information and confidence you needed to start taking control of your finances. Thank you for taking the time to share your feedback its always good to know that we have helped.

Nik

[Intelligent Money]

jimmybell said:

If i had the intention of setting up an account and move pension to you guys - would you guys entertain a visit to your office for initial advice/consultation? I suspect i'll have enough questions and paperwork to entertain some poor buggar for at least an hour, tho noted a lack of face-to-face listed as a cost saving on your website.

I tend to pride myself on understanding personal finances and being efficient but i think i'm reaching a point where i just don't know enough about the spread of options to be pension/tax/investment efficient, and i have some catching up to do - so i'm in a critical phase i think. Thus i'd like to learn more and benefit from some guidance.

I've been following some of the threads for some time and have been inspired with some confidence in the company, and previously wouldn't have qualified for your minimums - but with the PHers entry 'deal' thats hopefully something you can help me rectify. Plus i'm originally a Nottingham lad, and i just worked out your office is opposite one of my favourite pubs so this seems a win win.

Looking at my Scottish Widows performance, and then adding in a guesstimate of all of the fees - it's not exactly confidence inspiring.

Hi Jimmybell,

As Julian has already said I'm happy to either meet you at our office or come to you, just drop me an e-mail at [e-mail] and we can arrange to meet.

Nik

[Intelligent Money]

JulianPH said:

mikeiow said:

jimmybell said:

If i had the intention of setting up an account and move pension to you guys - would you guys entertain a visit to your office for initial advice/consultation? I suspect i'll have enough questions and paperwork to entertain some poor buggar for at least an hour, tho noted a lack of face-to-face listed as a cost saving on your website.

I tend to pride myself on understanding personal finances and being efficient but i think i'm reaching a point where i just don't know enough about the spread of options to be pension/tax/investment efficient, and i have some catching up to do - so i'm in a critical phase i think. Thus i'd like to learn more and benefit from some guidance.

<snip>

Aside from being from Leicester & having a main Aviva plan (that I believe has done quite well), you sound very much like me....particularly on the options to be pension/tax/investment efficient bit!
It’s the unknown unknowns that get you.
Nik, I will get in touch shortly to try to line up a chat. As said elsewhere in this thread, I suspect more can be gleaned in a short time for both sides from a face-2-face!

Nik has the tenacity to sometimes take some time off at weekend!

Whenever you want to get in touch we will be there to assist you.

Cheers

Julian

But rarely a whole weekend, I enjoy my work too much

Mikeiow drop me an e-mail at [e-mail] and we can arrange to meet at a time that works for you. Look forward to hearing from you.

Nik

[Intelligent Money]

Phooey said:

My latest (MIFID2?) statement with my current advisor's have detailed the TOTAL charges I am paying (1.9%) which prompted me to review my investments.

So, I just wanted to say a big thanks to Julian and Nik who I spoken to in length yesterday. There was absolutely no pressure at all to invest with IM which couldn't of been more different to experiences I (and family) have had in the past. Over the last 10-15 years I've been used to talking with IFAs who led me to believe I needed their services aka holding my hand. To be fair to my IFA it was he that got me into saving... so 10+ yrs later of almost max'ing out my ISA I have a pot that I probably wouldn't of had if I'd blown it all on cars .

Nik (my Private Client contact ) is exactly the kind of help a novice investor like myself needs - he talks the language I understand and a totally different kettle of fish to the IFA who needs to needs sell me something for initial and ongoing fees.

Sounds like you have a great team Julian!


eta - I appreciate some people have different situations to me, but it's now more clear than ever that paying a IFA is throwing money (and potential growth!) down the toilet.

Thank you for sharing your experience Phooey and I am glad that you found our conversation helpful. It was good to talk to you. We have got a great team so it always help to get good feedback and remind Julian how lucky he is

[Intelligent Money]

Phooey said:

Pleasure Nik. Thank you for your time.. sorry I stole nearly 1 hour of it!



ps. I forgot to mention my daughters CTF - it's held within an HSBC Stakeholder (CTF) but fees are high. How easy is it to move it to your JISA? My IFA doesn't want to touch it (I assume there's not enough profit vs work in it for them?). It's been running 10yrs (with HSBC) and topped up monthly by DD if that helps. Hoping it's easy-ish to do

Hi Phooey,

You just need to go through the private client site : https://www.intelligentmoney.com/private-clients/ click apply and select the JISA. Select transfer existing scheme in the contribution section and we do the rest. It should take about 5 minutes. If you need any help with it just let me know.

Kind Regards

Nik

[Intelligent Money]

andyb said:

Been putting this off for ages (there is something about pensions that cause inertia...). But given the barrage of positive comments on this thread, I think its time to act.

I have a pension pot that is performing 'ok'. A recommended (and very nice) St James contact reviewed the past performance and stated that even including fees, their funds would have beaten the funds I'm in... but highly dubious about their fee model.

So I'd like to move a proportion of the pot (with Scottish Widows) to you to see how it goes. And potentially move the kids CTFs over too.

How do I get started?

Thanks, Andy

Hi Andy,

Thank you for considering us, can I suggest that you drop me an e-mail at [e-mail]. I would then suggest we have a look at your current Scottish Widows plan as a starting point, just to make sure that you won't be giving up any benefits you are unaware of by moving. We can then have a chat and you can decide what you would like to do next.

Hope to hear from you soon.

Regards

Nik

[Intelligent Money]

Great thread link Derek, it makes the MiFID II position clear.
We went with a very clear and simple 0.87% single charge structure so clients would know exactly what they are paying.
I don't think that a client, retail or otherwise, making a service based or consumable purchase should have to rely on legislation to be told what they are paying for the service or goods.

Regards

Nik

[Intelligent Money]

Phooey said:

Hi Julian/Nik/IM,

ISA now set up - monthly DD starting 01/06/19. I can't believe how easy/quick it was! Hardest part was finding my National Insurance number - not used it for a long time!

If I want to add additional money (one off lump-sum/s) to the Direct-Debit, how does one go about doing this please?

Once again, thank you for the very informative chat/s this week

Hi Phooey,

Welcome to IM Private Clients, I'm glad you found the process easy to use. As Julian says you will get your log on details and then be able to access your account on-line. In the contributions section you just click add contribution. You can make one off payments or transfer in other policies straight into your account.

Happy to help if you need any guidance.

Kind Regards

Nik

[Intelligent Money]

Its was good to meet you, thank you for your hospitality

Regards

Nik

[Intelligent Money]

JulianPH said:

No problem, a straight answer to a straight question is something I (and therefore IM) strongly believe in.

Initial charging had always been an industry norm with investment managers until fairly recently, when it was phased out. It does however remain an industry norm to this day with all financial advisers and most SIPP providers.

We work on the basis that if all gross costs can be recouped from net income within 3 years then this is a profitable long term business model (and long term is the very basis of investment management).

The 'no-minimum investment' offer has actually worked very well in opening us up to a younger range of clients who will go on to become higher net wealth clients. In fact it has done so to such an extent that we are considering removing this requirement altogether.

It is probably important to add to this that we are approaching 20 years of age (IM that is, sadly not me!) and therefore we can do things like this as we have strong profitability, capital reserves and income revenue behind us.

Equally, we have a strict quota in place for the number of Scotchmen newbie members bearing only one groat (did you see what I did there?!) that we will take on as clients.

Cheers mate!

Just to add the comments on the initial 1.50%, In practical terms 1.50% is the maximum we would ever charge and we thought it was important that our clients are aware of the most they would have to pay. The actual charge is based on the work load that is involved in on boarding an investment and this is rarely linked to the size if the investment.

A single transfer from one provider who subscribes to the electronic transfer platform we use is a relatively straight forward and so will carry a low initial cost to us and so a lower initial charge. A varied or esoteric portfolio that requires often detailed paperwork and insists on original signatures and documents (rather than scanned copies in electronic formats) will take more time and is more costly to administer,

Part of the Private Client service is to tailor the service to meet the clients needs and this includes the fee, we will always agree the fee before we take a client on.

From a personal standpoint I am pushing the quota for Scotchmen and women I enjoy life north of the border

Regards

Nik

[Intelligent Money]

JulianPH said:

No problem, a straight answer to a straight question is something I (and therefore IM) strongly believe in.

Initial charging had always been an industry norm with investment managers until fairly recently, when it was phased out. It does however remain an industry norm to this day with all financial advisers and most SIPP providers.

We work on the basis that if all gross costs can be recouped from net income within 3 years then this is a profitable long term business model (and long term is the very basis of investment management).

The 'no-minimum investment' offer has actually worked very well in opening us up to a younger range of clients who will go on to become higher net wealth clients. In fact it has done so to such an extent that we are considering removing this requirement altogether.

It is probably important to add to this that we are approaching 20 years of age (IM that is, sadly not me!) and therefore we can do things like this as we have strong profitability, capital reserves and income revenue behind us.

Equally, we have a strict quota in place for the number of Scotchmen newbie members bearing only one groat (did you see what I did there?!) that we will take on as clients.

Cheers mate!

Just to add the comments on the initial 1.50%, In practical terms 1.50% is the maximum we would ever charge and we thought it was important that our clients are aware of the most they would have to pay. The actual charge is based on the work load that is involved in on boarding an investment and this is rarely linked to the size if the investment.

A single transfer from one provider who subscribes to the electronic transfer platform we use is a relatively straight forward and so will carry a low initial cost to us and so a lower initial charge. A varied or esoteric portfolio that requires often detailed paperwork and insists on original signatures and documents (rather than scanned copies in electronic formats) will take more time and is more costly to administer,

Part of the Private Client service is to tailor the service to meet the clients needs and this includes the fee, we will always agree the fee before we take a client on.

From a personal standpoint I am pushing the quota for Scotchmen and women I enjoy life north of the border

Regards

Nik