FundsNetwork is launching a second version of its tax wrapper analyser, giving advisers an upgraded comparison tool and an analysis function for high-rate taxpayers.
The new version of the Tax Wrapper Analysis introduced in 2008 allows advisers to compare the ISA to three other tax wrappers: the onshore bond, offshore bond and collectives. It has also been upgraded in line with the 50% tax band coming into effect next April for those earning over £150,000.
In addition, Fidelity says the tool will allow advisers to be more precise about any changes to TERs.
Paul Kennedy, head of tax and trust planning at Fidelity, says the choice of tax wrapper is paramount and can greatly influence the client's return on investment.
"It is such a shame that hours can be spent in selecting the right assets and funds with the client to then be robbed of some of that underlying investment return through poor tax planning.
"One of the first tests I did on the new tool showed a return of 161% more on one wrapper compared to another. I find it staggering when you consider it is exactly the same fund, the same manger, he same performance and that difference arises solely because of the tax wrapper."
Fidelity says the tool will allow for analysis of the ISA in light of recent changes which saw its limit increase by over 41%. The analysis can be done in isolation or as part of a larger portfolio.
Kennedy adds that the upgrade is designed to help the adviser deliver the maximum return for clients.
"Like any tool, it is designed to assist the advice process," he says. "An inefficient tax wrapper simply means giving part of the investment return to the government where that was not necessary."
The launch of the second version of the analyser follows research conducted by Fidelity that suggests an estimated 33 million UK tax payers are confused about issues surrounding tax.According to Fidelity, less than 50% of people believe that tax planning linked to savings and investments can make a difference to their tax liabilities.
Following these findings, Fidelity is launching a Know your Tax campaign.
A question of selectivity
Watchdog interviewed 13,000 people
Debate over loyalty bonuses