Fidelity FundsNetwork is bidding to help advisers "navigate" through the collectives versus investment bonds debate born out of CGT changes in the Budget.
It has put together a white paper for advisers designed to counter what it describes as a “knee-jerk” reaction to the Budget announcement.
Written chiefly by FundsNetwork director of tax and trust planning, Paul Kennedy, the paper says the CGT changes have tipped what was a fairly balanced consumer decision toward investment bonds.
It argues the debate is not as clear-cut as some commentators claim, and says it is important advisers understand how certain investment classes are taxed differently from wrapper to wrapper and how this can affect the investor’s ultimate return.
“The importance of tax planning in the field of personal investment cannot be underestimated,” Kennedy says.
“Simple decisions such as whether to use a collective investment or an insurance bond can have a substantial effect on the client’s ultimate return.
“If we are to approach tax wrapper planning professionally, advice must not be encumbered with or influenced by spurious rhetoric from camps with a vested interest.
“Statistics can always be spun to best effect and the nebulous can be introduced to mask the fundamentals.”
The paper argues the asset allocation decision must override any concerns advisers or their clients may have over which wrapper to go with. “It is that decision, and that alone, which will determine the gross investment return”, Kennedy says.
Advisers can either read the paper online or contact FundsNetwork to request a copy.
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