Cofunds has launched a cash account with a regular cash withdrawal facility which could help clients cope in volatile markets.
The account enables investors to hold cash on the Cofunds platform, whilst allowing advisers to manage their investment portfolios more effectively.
It will facilitate timely investment as there is no need to post cheques and provides a home for settlement of investments as well as all investment income including rebated trail and other cash.
On balances of less than £100,000 interest is 1% below Bank of England Base Rate and on larger sums it is 0.5% below with instant access at all times. The account is free to use.
Assets in the account are automatically included in online valuations and assets can be bought or sold through the Cash Account.
The account also has a regular withdrawal facility. Currently, this is limited to clients with £100,000 on the platform but this restriction will be removed later in the year.
Regular withdrawals from investment bonds and SIPPS and the proceeds of sales from unwrapped funds can be collected in the Cash Account and then be automatically transferred to a client’s bank account on a monthly, quarterly or annual basis. The client has the choice of taking the natural income that is paid out by his funds or of asking for a set amount of money.
Cofunds believes, following the changes in CGT announced in the Pre-Budget Report, this facility will be particularly helpful in allowing advisers to manage their clients’ cash flows more efficiently.
Alastair Conway, head of marketing and proposition, says: “The cash account has been piloted with a number of intermediaries enabling the processes to be honed and fully tested. With this robust process in place, we can now offer the Cash Account to all intermediary customers. Full delivery of the service is being phased with a number of exciting additional developments planned.
“While markets are looking a bit unsettled it provides advisers with the ability to shelter clients’ investments in cash for the time being if they choose. For advisers without a client account, the alternative in the past has been to hand the proceeds of sales back to clients to bank. This means that getting back in the market at the right time can be a slow and laborious process that is costly and inefficient for both the adviser and the client.”IFAonline
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