WAYS TO HOLD YOUR PORTFOLIO

The assets held within your portfolio are the main drivers of your investment returns.

The assets held within your portfolio are the main drivers of your investment returns. However, there are a number of ways in which you can choose to hold them. While the returns should be similar, the choice you make will determine:

The way that your portfolio is reported to you.
The way charges are disclosed to you.
The breadth of assets available.
The way the assets are taxed.
The speed in which your investment advisers act.

DISCRETIONARY FUND MANAGER

An individual investment adviser builds a bespoke portfolio for you
The holdings are held individually
You give the investment advisers discretion to buy and sell holdings without having to ask you
Often you can choose a manager to suit you and even meet them
The holdings are taxed individually
The individual holdings can be in dierent tax wrappers such as Pensions or ISAs
The range of assets is limited to what the manager can actually buy for you.

MULTI-ASSET FUND

A portfolio of holdings, often funds, held within another fund structure
The investment adviser runs the portfolio to a specific objective designed to meet the needs of target client groups
It is not created specifically for you.
The portfolio is held as a single fund and taxed as a single fund
The fund can be held in different tax wrappers such as Pensions or ISAs from different providers
The manager buys and sells holdings to meet the fund objective in real-time.
The fund has access to assets, holdings and techniques not available to the individual.

SELECTION OF INDIVIDUAL FUNDS

Holdings can only be bought or sold with your permission
A number of individual funds, selected by you, or recommended by an adviser
The portfolio and, in particular its level of risk, will change as each fund falls and rises
The holdings are taxed individually
The individual holdings can be in dierent tax wrappers such as Pensions or ISAs
You, or your adviser, are responsible for keeping it on-track.

MODEL PORTFOLIO

A portfolio produced to a model by a Discretionary Fund Manager and marketed to multiple clients
It is not created specifically for you
You rarely get to meet the manager
You give the investment advisers discretion to buy and sell holdings without having to ask you
The holdings are taxed individually and can be held in different tax wrappers such as Pensions or ISAs.

TYPICAL INVESTOR EXPERIENCE

Having looked at the main choices available for holding your portfolio, we’ll now look at what we believe is the typical investor experience for each of the four options.

When it comes to choosing how they hold their assets we find investors will typically:

DISCRETIONARY FUND MANAGER

Have existing stocks and shares that are ‘treasured’ or can’t be traded for tax reasons
Feel reassured, or enjoy the involvement or sense of status from having their own portfolio run by a manager who they meet
Be willing to invest enough money to gain from individual costs for portfolio management
Be willing to invest enough to gain a tax advantage from having their holdings taxed individually
Accept that their portfolio is unlikely to be the best performing of all the portfolios they build for their individual clients

MULTI-ASSET FUND

Like to empower their Investment advisers with the widest possible range of investments
Prefer the manager’s decisions to be acted on as soon as possible
Prefer their investment returns to roll-up inside a single fund and be taxed as a single entity
Not want their investment strategy to be constrained by their product provider or tax wrapper
Prefer their portfolio to be liquid and traded on a daily basis
Be happy to have a pooled portfolio that appears as a single fund
Be reassured by being invested in a large scale fund, along with others.

SELECTION OF INDIVIDUAL FUNDS

Not want to pay for somebody to manage their individual funds and are happy with the associated risk
Prefer to be advised on each fund trade, or trade themselves
Accept that by selecting individual funds they will not benefit from a coordinated investment strategy across all their assets
Accept that their portfolio will be adjusted less regularly
Accept that their trades will take longer.

MODEL PORTFOLIO

Like to see their holdings individually in reports or online
Not have sufficient assets for a Full Bespoke Discretionary Fund Management service
Accept that there are certain investments that the portfolio is unable to access
Accept that their trades will take longer.

Ways to Hold your Portfolio Download

Disclaimers:

The value of pensions and investments and the income they produce can fall as well as rise, you may get back less than you invested.

Past performance is not a guide to future performance.