· Web viewINSTRUCTION TO USER – The following sections have been designed for inclusion within a report generated by the PPOL Suitability Report Builder. In …

INSTRUCTION TO USER – The following sections have been designed for inclusion within a report generated by the PPOL Suitability Report Builder. In the first instance, you will need to use the PPOL Report Builder to create a report including an Introduction section (and if undertaking a transfer) at least one Investment Review Recommendation section plus any other required sections in the usual way. Once you have downloaded the report created via PPOL to Word, simply insert (copy and paste) this relevant new ISA section or ISA transfer section into your report after the Investment Review section and before any new recommendation sections. The accompanying Risk Warnings and Notes on Financial Products are also attached for inclusion within the Appendix.

The text has been colour coded to aid with your understanding. Where the text is highlighted in blue this tends to suggest that the text may not be appropriate in all instances and you may need to delete some or all of it. Where the text is highlighted in red, this will require your input.

Investment Recommendations

<THE FOLLOWING TEMPLATE IS SUITABLE FOR A NEW AIM PORTFOLIO ISA>

I have recommended that you invest into a Stocks & Shares ISA for the following reasons:

This investment reflects your investment goals and access requirements It will provide you with a regular income as per your requirements It will provide the potential for capital growth as per your requirements You wish to make full use of the reliefs and allowances available to you to minimise the

amount of tax you pay in life and on death It will help reduce the risk associated with asset-backed investment by providing exposure to

a range of professionally managed stocks and shares The investment will benefit from tax advantaged growth and there will be no capital gains

tax to pay on encashment To potentially mitigate Inheritance Tax (IHT) when invested within small and medium sized

company shares listed on the Alternative Investment Market (AIM) The investment of regular monthly contributions will mean that you benefit from “pound

cost averaging” It facilitates the creation of a mini portfolio through direct investment into small and

medium sized companies from a variety industry sectors under one investment There will be no penalty applied on the encashment of this investment and you will be able

to access your capital at any time as per your stated objective. However I would not generally recommend such an investment unless you are prepared to take a medium to long term view (i.e. five years plus)

ISA investments do not need to be included on your Tax Return This investment will allow you to switch your underlying investment holdings at any time

without creating a tax liability

There are a number of factors to be considered when selecting an appropriate investment provider.

Investment Options and Performance

There is obviously no means to categorically predict future investment performance. Although it should be stressed that past performance is no guarantee of future performance, it can act as a useful guide. It is also beneficial to compare the range of investment options available. Flexibility to

switch between a wide range of strong performing investment opportunities is important. Your attitude to risk could change, and as a result you may wish to take an alternative investment strategy in the future.

Charging Structure

The effect of charges is reflected in the Reduction in Yield or Total Expense Ratio of the selected investment. For further information concerning charges, I refer you to the Illustration, Key Features Document and Fund Fact Sheets provided.

Financial Strength

It is imperative to select an investment partner who is financially secure and will be able to meet all of their obligations to policyholders in the future.

Redemption Penalties

Although I would only tend to recommend an asset-backed investment where the individual concerned is willing to take a medium to long term view to investment (i.e. five years plus), it is also worth comparing any charges which would be incurred on early encashment. I refer you to the Illustration and Key Features Document provided for further information.

Summary of Recommendations

Having compared the whole of the market place, I have recommended that the available monies be invested as follows for the reasons highlighted below:

Ownership Investment Type Company Lump Sum Monthly Savings

Annual Income

Income Frequency

Individual Savings Account

<INSERT PROVIDER> Individual Savings Account (Ownership: <INSERT NAME>)

<INSERT PROVIDER DETAILS HERE> The recommended provider has been selected in accordance with the investment

proposition previously detailed. I can confirm the company is financially strong, has provided an excellent service to our clients and provides access to the investment strategy agreed.

They provide access to discretionary fund management services The provider offers access to small and medium sized company shares listed on the AIM

market which with effect from 5th August 2013 can be sheltered within an ISA They are established experts within the field of discretionary investment management and

have an excellent track record of investment within small and medium sized enterprise equities

Their investment service offers the greatest flexibility for your personal circumstances with a low minimum for both initial and top up investments as well as regular and full withdrawal options should your circumstances change

The charging structure of this investment is competitive when compared to similar investments in the market place

Although the charging structure of this investment is slightly less competitive than certain other comparable investments, I believe the potential for enhanced performance that could

be achieved through an AIM portfolio more than compensates for this fact. Please remember past performance is no guarantee of future performance

The research tool I have used to review the market place identified them as the most suitable and competitive solution for your needs and objectives

They have provided us and our clients with an excellent service in the past They provide access to a wide range of investment opportunities including AIM listed shares,

making it simple to vary your investment strategy to reflect changing market conditions, or should your risk profile change in the future

They provide a self-select option regarding your preferred investment strategy including individual AIM shares. This provides greater scope to create a bespoke portfolio tailored to your individual risk profile and objectives

It is possible to switch the underlying share holdings free of charge They provide the facility to manage your investment online. Providing access to instant

valuations, fund information and other investment analysis tools They can facilitate the re-registration of your existing investment funds They offer a share exchange facility which will reduce the costs, and simplify the

administration associated with this transaction They provide the facility to drip feed your initial lump sum investment into the

recommended portfolio over a defined time period. This will help to minimise the effect of stock market volatility through “pound cost averaging”

This is an ideal investment as there would be no redemption penalty applied on early encashment. Thus providing enhanced flexibility should additional funds need to be raised without penalty in the short term

The redemption charges are competitive, as highlighted below

<DELETE TABLE IF NOT APPLICABLE>

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6% % % % % %

I have recommended that this investment be held in your sole name.

Investment Strategy <USE THE FOLLOWING IF RECOMMENDING INDIVIDUAL FUNDS / SHARES>

I have recommended that the available monies be invested as follows:

Fund / Share Sector Risk Rating

Fund / Share Rating

Initial Charge

Annual Management

Charge

Total Expense

Ratio

I have recommended the above for the following reasons:

The funds / shares selected reflect your attitude towards risk, the investment objectives discussed and reflect the investment proposition previously agreed

The above reflects your stated risk profile and investment objectives To generate a return on your investment through a capital gain and dividend income on the

direct equity portfolio recommended The underlying investments are made up of small and medium sized company shares listed

on the Alternative Investment Market (AIM)

If held for two years the underlying holdings of the investment strategy will be granted Business Property Relief (BPR), meaning the total ISA fund value will not be assessed for Inheritance Tax (IHT)

In return for the potential to receive superior returns to those offered by more mainstream investments, you are happy to take a more sophisticated approach to investment where the strategy may not always be straightforward

The performance has predominately been above the sector average since inception Exposure to an AIM portfolio provides access to smaller businesses that have been growing

their earnings year-on-year, a key factor behind long-term performance The individual share(s) recommended have a strong market position and clear advantages

over their competitors The individual share(s) recommended have a proven management team with a record of

success and a clear path to profitability The company shares recommended are already very profitable and offer a business model

that can cater for continued growth

Please bear in mind that the outlook for markets as a whole can change, certain asset classes, and industry sectors will perform better than others and as a result your underlying asset allocation will become unbalanced over time which will need to be addressed to match your attitude to risk.

There may be occasions when an individual fund / share may have a higher risk rating than your overall stated attitude to risk. If this is the case, then the overall risk rating applied to all of the combined funds / shares’ being recommended is still designed to meet your stated risk profile.

I would also stress that higher charges can have an effect on investment performance. In essence, a fund will need to perform better in order to cover the increased charges.

<DELETE OR AMEND CHARGES TABLE TO SUIT YOUR RECOMMENDATION>

Entry ChargesAdviser Charge AC Paid By Provider Charge Fund Charge Wrap Fee

On-going Charges

Adviser Charge AC Paid By InvestmentManagement Fee Plan Fee DFM Charge Broker/Trading Fee

Event Based Charges

Exit Charges

Investment Strategy <USE THE FOLLOWING IF RECOMMENDING A DFM SERVICE>

I have recommended that your monies be invested with a Discretionary Fund Manager. Discretionary Fund Management ensures the underlying assets of the portfolio are invested in accordance with your specific risk profile and agreed investment objectives. The portfolio is managed on a regular basis and all of the daily investment decisions are the responsibility of your

dedicated investment manager. There are a number of advantages associated with a discretionary fund management including:

Your portfolio will be professionally managed on a daily basis to ensure it remains closely aligned to your risk profile and continues to reflect your individual needs and investment objectives.

Provides access to a broad range of shares, funds and assets at institutional terms, some of which are not normally available to private investors.

Provides access to your own dedicated investment manager offering a more personal service, regular contact and bespoke reporting, including consolidated tax statements.

The investment manager can structure your portfolio with IHT mitigation at the heart of its processes

Provides the opportunity to dictate investment preferences e.g. AIM socks, ethical stocks i.e. exclude tobacco etc.

Allows the investment manager to exist “closer to the market” and therefore switch stocks, funds and assets quickly to take advantage of potential investment opportunities.

Provides a pre-determined agreed benchmark against which performance can be assessed.

In view of your stated risk profile and investment objectives, I have recommended that the available monies be invested as follows:

Discretionary Fund Manager Portfolio Name Objective Risk Rating Allocation


<INSERT PROVIDER DETAILS> The portfolio will exclusively invest within unquoted companies with the aim of securing

Business Property Relief (BPR) after 2 years The recommended portfolio offers a transparent asset backed investment service designed

to provide capital preservation, capital gains or income combined with inheritance tax mitigation

The investment philosophy is not to allocate between sectors, but to meet the portfolio’s objectives for Business Property Relief (BPR) through the careful selection of qualifying unquoted companies according to, price and valuation, management attitude and financial structure

They maintain a diverse but manageable portfolio so as to ensure intimate knowledge of the companies they choose to invest in

They provide their investment managers with a degree of flexibility and discretion, whilst having robust control systems in place centrally to ensure they are doing a good job

They provide access to a broad and diverse range of investment vehicles via their portfolio including AIM shareholdings

They have a clear and structured process in place for regular reporting They offer a high level of flexibility to ensure your portfolio is set up to meet your individual

investment goals and requirements The charging structure is competitive when compared to similar services in the market place The research tool I have used to review the market place identified them as offering the

most suitable and competitive service to meet your needs and objectives They have provided us and our clients with an excellent service in the past

I recommend that you contact me regularly to review the performance and continued suitability of the recommended Discretionary Fund Management Service.



On-going Charges


Event Based ChargesFund / Share Switch

Exit Charges

Surrender / Encashment / Transfer

Further information concerning the past performance of the recommended investment strategy can be found in the section entitled Investment Fund / Portfolio Information at the back of this report.

Further Information and Risk Warnings

Further information regarding the recommended investment can be found in the Key Features Document provided and the Appendix of this report. A summary of the risk warnings associated with my recommendations can also be found in the Appendix of this report.

I can also confirm that a Key Investor Information Document (KIID) has been provided detailing information such as charges, objectives, risk and past performance. The information is designed to assist in making a reasoned judgement on whether it is appropriate to invest in a particular fund or funds.

Alternative Solutions Considered But Discounted

I confirm due consideration was given to a range of alternative solutions but subsequently discounted for the following reasons:

Investment Trusts

The higher risk associated with such investments means they are not suitable for an investor with your risk profile

Generally do not provide certainty of income in that few providers offer the facility to provide a fixed monthly income as per your requirements

Initial and on-going charges are generally greater (typically the initial and annual management charge incurred would be 3 to 5% and 1 to 1.5% respectively)

It is more administratively onerous to hold such an investment under trust Does not provide access to the recommended with profit fund You will not receive an enhanced allocation on investment

You did not like the fact that any capital gains above the annual exemption will need to be declared in your annual tax return

The switch of funds under an investment trust will give rise to a taxable event. In view of your circumstances, this is likely to result in a capital gains tax charge

The cost of switching funds within the recommended investment bond are generally cheaper when compared to the sale and repurchase of units in a unit trust

Being a higher rate tax payer any income derived from such an investment would be taxed at 40%, unlike an investment bond where it is possible to take a tax deferred withdrawal of up to 5% of the original amount invested

Being an additional rate tax payer any income derived from such an investment would be taxed at 50%, unlike an investment bond where it is possible to take a tax deferred withdrawal of up to 5% of the original amount invested

Non-ISA Collective Investments / General Investment Account



It is more administratively onerous to hold such an investment under trust Does not provide access to the recommended with profit fund You will not receive an enhanced allocation on investment You did not like the fact that any capital gains above the annual exemption will need to be

declared in your annual tax return The switch of funds under a unit trust will give rise to a taxable event. In view of your

circumstances, this is likely to result in a capital gains tax charge The cost of switching funds within the recommended investment bond are generally

cheaper when compared to the sale and repurchase of units in a unit trust Being a higher rate tax payer any income derived from such an investment would be taxed

at 40%, unlike an investment bond where it is possible to take a tax deferred withdrawal of up to 5% of the original amount invested


National Savings Certificates

They do not meet your stated risk profile You wished to derive an income from the invested capital

Onshore Investment Bond

They are not as tax efficient given your circumstances The fact that a redemption penalty will typically be applied on encashment within the first

five years of investment does not reflect your access requirements You do not currently make use of your annual capital gains tax allowance

Offshore Investment Bond

Your tax position and residency status does not warrant the use of an offshore investment The charges associated with an offshore investment tend to be greater

The fact that a redemption penalty will typically be applied on encashment within the first five years of investment does not reflect your access requirements

You do not currently make use of your annual capital gains tax allowance

Pension Planning Products

You have already made full use of your pension contribution tax relief for the current tax year

I understand it is your intention to make use of your pension contribution tax relief for the current tax year at a later date

I confirm that during our meeting we discussed the possibility of investing into a pension product and the tax advantages associated with this form of investment. Although the benefits are very attractive your requirement for future access allowed us to dismiss this option

The tax charge to access the funds if required in the future meant the option was dismissed at this time

The timescale agreed for the available funds was short to medium term, where a pension should be considered a long term investment

Structured Products

You did not wish to lock your money away for a predetermined fixed term Such investments are not suitable given your attitude towards investment risk You did not feel the guarantees associated with such investments provided adequate

compensation for the limit to the potential maximum return that you could receive over the term of investment

You wished to keep your investment strategy relatively simple The underlying charges of such investments tend to be greater

Exchange Traded Products

You felt the potential returns would be greater elsewhere They do not meet with your investment objective You felt the total cost of ownership was greater than what was being marketed You felt that the plethora of structures being marketed complicated your investment

decision You were unsure if you were achieving the correct exposure to the required asset classes You did not wish your investment to undertake securities lending activities You were concerned over the counterparties risk associated to the derivative replication You felt there was a conflict of interest with the ETP provider also acting as a market maker The only available ETP solutions had incompatible domiciles You felt the tracking error of many ETP solutions were too high You felt the tracking differences displayed between the ETP solutions and their benchmarks

was not suited to your investment time horizon

Venture Capital Trusts

You wished to keep your investment strategy relatively simple Such investments are not suitable given your attitude to investment risk You did not wish to lock you money away for a predetermined fixed term

The tax advantages are not guaranteed and remain dependent on the qualifying status of the underlying holdings

Initial and on-going Charges are relatively expensive in comparison to other investments VCTs often have poor liquidity due to the volume of traded shares being low Your marginal rate of income tax and or income tax already paid is not sufficient to benefit

from such an investment

Enterprise Investment Schemes & Seed Enterprise Investment Schemes (EIS & SEIS)

You wished to keep your investment strategy relatively simple Such investments are not suitable given your attitude to investment risk Such investments are not traded on a stock exchange so withdrawing cash if required may

be difficult or at times impossible You are considered an experienced or sophisticated long term investor Initial and on-going Charges are relatively expensive in comparison to other investments You did not wish to lock you money away for a predetermined fixed term The tax advantages are not guaranteed and remain dependent on the qualifying status of

the underlying holdings Your marginal rate of income tax and or income tax already paid is not sufficient to benefit


Unregulated Collective Investment Schemes (UCISs)

You wished to keep your investment strategy relatively simple Such investments are not suitable given your attitude to investment risk You are not a certified sophisticated or experienced investor You are not a high net worth investor They are not subject to investment or borrowing restrictions which ensure a sensible

investment spread They frequently invest in assets that are not available to regulated investments because they

are often riskier or less liquid You did not wish to invest in assets which typically are not traded in established markets Such investments are difficult to value and often highly illiquid The risks to your capital were too opaque Reporting was poor with performance information often being unavailable or unreliable These investments are not covered by the FSCS The scheme operator will not have applied for FSA authorised or recognised scheme status There are typically no cancellation rights

Non Mainstream Pooled Investments (NMPIs)

You wished to keep your investment strategy relatively simple Such investments are not suitable given your attitude to investment risk You are not a certified sophisticated or experienced investor You are not a high net worth investor You were concerned by the unusual, speculative or complex assets of the underlying

holdings These investments are not covered by the FSCS The scheme operator will not have applied for FSA authorised or recognised scheme status There are typically no cancellation rights The pooled product structures are too complicated

You did not wish to invest in assets which typically are not traded in established markets Such investments are difficult to value and often highly illiquid The risks to your capital were too opaque Reporting was poor with performance information often being unavailable or unreliable

Important Information

Cost of Services

There are various ways I can be remunerated for my advice and the provision of my services. A summary of the options can be found in our Tariff of Charges document, Services and Costs Disclosure Document (SCDD) or Combined Initial Disclosure Document (CIDD) provided.

A detailed summary of all the charges associated with the advice provided in this report can be found below:

Charges Summary

Proposed Stocks & Shares ISA Charges <INSERT PROVIDER>



On-going Charges



Exit Charges


Entry Charges: One off charges taken before or on investment.

Adviser Charge: A fee paid to the adviser for advice and services.

AC Paid by Client: The Adviser Charge will be paid directly by you.

Provider Charge: A charge taken from the premium prior to investment.

Fund Charge: The difference between the buying and selling prices of units or shares in a dual priced fund - often termed a Bid/Offer spread.

On-going Charges: Regular charges, typically taken over a year.

Adviser Charge: A fee paid to the adviser for on-going advice and services.

AC Paid by Provider: The Adviser Charge will be facilitated by the product provider but taken from your funds.

Investment Management Fee: Or Annual Management Charge (AMC). A fee levied by the investment firm paid out of the fund for the costs of investment management and fund administration.

Plan Fee: A set charge typically applied on the plan anniversary to cover provider administration.

Event Based Charges: Ad hoc charges related to specific events.

Fund Switch Fee: A charge to sell one fund to buy another.

Exit Charges: One off fees taken on termination.

Exit Charge: Applicable under the plan or investment rules following early sale, surrender, encashment or transfer.

APPENDIX

Risk Warnings – Individual Savings Account (AIM Invested)

In addition to the risks shown below, I recommend you read carefully the section entitled “risk factors” in the Key Features Document provided which highlights any possible disadvantages of affecting this plan.

This type of investment should be considered for the medium to long-term and based on the smaller company direct equity nature of the underlying investments, should be regarded as higher risk.

The value of the investment is determined by the most recent net asset value of the shares which make up your portfolio, the price of which can fall as well as rise. The overall value of the investment is therefore not guaranteed and you might get back less than you originally invested especially in the early years

Investment into ‘qualifying shares’ in smaller companies will be more volatile and subject to certain specific risks in comparison to larger, more mature companies. Consequently this may result in sudden and substantial falls in the value of your portfolio.

Investing solely in a particular sector or otherwise having an investment plan with a narrow focus may be more risky than investing across a broad range.

For a full explanation of the charges and how they affect your plan, please refer to your personalised illustration and Key Features Documents.

The figures on any quotations provided are for illustration purposes only and are not guaranteed.

Past performance is no guarantee of future returns. The recommendations are based on current taxation, law and practice and the current legal

and administrational framework and are based on my current interpretation and understanding of those, all of which may be subject to change.

The favourable tax treatment of ISAs and your personal circumstances may change over the period of investment and could affect the benefits you derive from them.

Withdrawals taken from an AIM invested ISA will cease to qualify for Business Property Relief (BPR).

Where an income is being drawn immediately, you should be aware that this could have the effect of eroding the initial value of the capital invested.

Smaller company shares can be relatively illiquid, meaning they could be harder to trade, which makes them higher risk.

Notes on Financial Products


You can only invest into an ISA if you are resident and ordinarily resident in the UK for tax purposes. There are two types of ISA available – Cash and stocks and shares and you can save into both types of ISA in any one tax year. However you cannot save in more than one cash ISA or more than one stocks and shares ISA in the same tax year. The main benefits of an ISA are their tax efficiency (see below), the fact that you can usually access the invested monies at any time (although some accounts have a notice period), and they do not have to be reported on your personal tax return.

The annual ISA allowance for the 2013/14 tax year is £11,520. It is possible to invest up to £5,760 in cash with one provider with the remainder of the allowance being invested in stocks and shares with either the same, or a different provider. The ISA allowance will increase in line with CPI on an annual basis.

You can transfer all of the money you put into an ISA in earlier years or only some of it, if you wish. However, if you want to transfer the money you have invested in an ISA in the current tax year, you must transfer all of it. Money from a cash ISA can be transferred into either another cash ISA or into a stocks and shares ISA, but a stocks and shares ISA can only be transferred into another stocks and shares ISA.

Taxation

The interest on a cash ISA will accrue free of any taxation. As for Stocks and Shares ISAs, there is no capital gains tax to pay on encashment. The notional 10% tax on equity dividends ceased to be paid to ISA managers from 5th April 2004, whilst the 20% tax credit on interest from fixed interest securities can continue to be reclaimed indefinitely.

AIM Investing

The government changed the ISA rules on 5 August 2013 to allow AIM shares to be held in an ISA. These new rules are part of a wider government initiative that aims to encourage investors to discover the benefits of smaller companies.

Created in 1995, AIM (formerly The Alternative Investment Market) is the London Stock Exchange’s international market for smaller growing companies. A wide range of businesses including early stage, venture capital backed as well as more established companies join AIM seeking access to growth capital. AIM has now developed into a highly flexible public market easily accessible to both investor and company. AIM is now home to around 1,100 companies with a combined worth of more than £60 billion (source LSE June 2013).

AIM has three investment indices - the FTSE AIM UK50, FTSE AIM100 and the FTSE AIM All-Share Supersector. The companies on it, benefit from a high public profile and strong interest among a growing and increasingly sophisticated investor base. Investors ranging from private individuals to global institutions regard AIM as an excellent place to find investment opportunities in young, fresh, entrepreneurial and growth-orientated businesses from circa 26 countries. They cover a wide range of market sectors and sub-sectors, providing all types of investors with a vast range of choice in seeking out businesses to fit their investment profile.

Investors wishing to buy or sell shares in AIM stocks will typically either invest directly without advice or deal through a stockbroker in a traditional way. Due to the tax breaks which are currently available, many brokers run specialist AIM portfolios which have been set up with the intention of mitigating Inheritance Tax (IHT). As tax law stands at the moment, qualifying AIM companies (which exclude certain types of company such as investment companies or those involved in real estate) are treated as business assets and thus qualify for Business Property Relief on death.

Business Property Relief (BPR)

Business Property Relief (BPR) is a tax relief provided by the UK Government as an incentive for investing in specific types of trading companies. It was introduced by the Government in the Inheritance Tax Act 1984, and has since been extended to investments in certain types of unquoted companies (not listed on the main stock markets) to encourage investment into this area.

Once assets qualifying for BPR are held for two years, they are exempt from IHT (providing they are still held at the time of death). This effectively means that they fall out of the owner’s estate with a potential tax saving of up to 40%. The shareholder does not have to be directly connected with the running of the company, for example as a director or employee, to benefit from the relief. The definition of ‘unquoted’ is not quoted on a recognised stock exchange although shares quoted on the Alternative Investment Market (AIM) are also eligible for this relief. The unquoted company would have to meet certain criteria to be eligible for (BPR), including being a ‘trading’ company within the meaning of the relevant legislation for relief to apply to its shares. A shareholder would become eligible for (BPR) once he had held the shares for at least two years.

In the event of the death of the investor within the two year qualifying period, once probate has been obtained, the portfolio can be transferred to the investor’s spouse without restarting the qualifying period for BPR but will lose its ISA status. Where this is not possible or suitable, the portfolio will be treated in the same manner as if invested in companies quoted on the London Stock Exchange.

Collective investments, such as OEICs, with funds investing solely in unquoted company shares do not qualify for BPR.

Investment Recommendations

<THE FOLLOWING TEMPLATE IS SUITABLE FOR ISA TRANSFER INTO AN AIM PORTFOLIO>

I have recommended that you transfer the previously identified ISAs for the following reasons:

To retain the tax advantages associated with this form of investment A transfer will aid your investment goals and access requirements To restructure the asset allocation of your investment portfolio to individual AIM shares

available for investment within an ISA with effect from 5th August 2013 To potentially mitigate Inheritance Tax (IHT) when invested within small and medium sized

company shares listed on the Alternative Investment Market (AIM) It will provide you with a regular income as per your requirements It will provide the potential for capital growth as per your requirements You wish to make full use of the reliefs and allowances available to you to minimise the

amount of tax you pay in life and on death The transfer will facilitate the creation of a mini portfolio through direct investment into

small and medium sized companies from a variety industry sectors under one investment This investment will allow you to switch funds at any time without creating a tax liability ISA investments do not need to be included on your Tax Return You are still willing to take a medium to long term view with the investment of these monies There will be no penalty applied on the encashment of this investment and you will be able

to access your capital at any time as per your stated objective. However I would not generally recommend such an investment unless you are prepared to take a medium to long term view (i.e. five years plus)

There are a number of factors to be considered when selecting an appropriate investment provider.

Investment Options and Performance

There is obviously no means to categorically predict future investment performance. Although it should be stressed that past performance is no guarantee of future performance, it can act as a useful guide. It is also beneficial to compare the range of investment options available. Flexibility to switch between a wide range of strong performing investment opportunities is important. Your attitude to risk could change, and as a result you may wish to take an alternative investment strategy in the future.

Charging Structure

The effect of charges is reflected in the Reduction in Yield or Total Expense Ratio of the selected investment. For further information concerning charges, I refer you to the Illustration, Key Features Document and Fund Fact Sheets provided.

Financial Strength

It is imperative to select an investment partner who is financially secure and will be able to meet all of their obligations to policyholders in the future.

Redemption Penalties

Although I would only tend to recommend an asset-backed investment where the individual concerned is willing to take a medium to long term view to investment (i.e. five years plus), it is also worth comparing any charges which would be incurred on early encashment. I refer you to the Illustration and Key Features Document provided for further information.

Summary of Recommendations

Having compared the whole of the market place, I have recommended that the available monies be invested as follows for the reasons highlighted below:

Ownership Investment Type Company Lump Sum Monthly Savings

Annual Income

Income Frequency

ISA Transfer

<INSERT PROVIDER> Individual Savings Account (Ownership: <INSERT NAME>)

<INSERT PROVIDER DETAILS HERE> The recommended provider has been selected in accordance with the investment

proposition previously detailed. I can confirm the company is financially strong, has provided an excellent service to our clients and provides access to the investment strategy agreed.

The provider offers access to small and medium sized company shares listed on the AIM market which with effect from 5th August 2013 can be sheltered within an ISA

They provide access to discretionary fund management services They are established experts within the field of discretionary investment management and

have an excellent track record of investment within small and medium sized enterprise equities

Their investment service offers the greatest flexibility for your personal circumstances with a low minimum for both initial and top up investments as well as regular and full withdrawal options should your circumstances change

They provide access to a wide range of investment opportunities including AIM listed shares, making it simple to vary your investment strategy to reflect changing market conditions, or should your risk profile change in the future

They provide a self-select option regarding your preferred investment strategy including individual AIM shares. This provides greater scope to create a bespoke portfolio tailored to your individual risk profile and objectives

The charging structure of this investment is competitive when compared to similar investments in the market place

Although the charging structure of this investment is slightly less competitive than certain other comparable investments, I believe the potential for enhanced performance that could be achieved through the extended range of investment opportunities that are available more than compensates for this fact. Please remember past performance is no guarantee of future performance

The research tool I have used to review the market place identified them as the most suitable and competitive solution for your needs and objectives

They have provided us and our clients with an excellent service in the past They provide the facility to manage your investment online. Providing access to instant

valuations, fund information and other investment analysis tools They can facilitate the re-registration of your existing investment funds

They provide access to a range of model investment portfolios They offer a share exchange facility which will reduce the costs and simplify the

administration associated with this transaction This is an ideal investment as there would be no redemption penalty applied on early

encashment. Thus providing enhanced flexibility should additional funds need to be raised without penalty in the short term

The redemption charges are competitive, as highlighted below

<DELETE TABLE IF NOT APPLICABLE>

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6% % % % % %



Investment Strategy <USE THE FOLLOWING IF RECOMMENDING INDIVIDUAL FUNDS / SHARES>

I have recommended that the available monies be invested as follows:

Fund / Share Sector Risk Rating

Fund / Share Rating

Initial Charge

Annual Management

Charge

Total Expense

Ratio


The funds / shares selected reflect your attitude towards risk, the investment objectives discussed and reflect the investment proposition previously agreed

The above reflects your stated risk profile and investment objectives To generate a return on your investment through a capital gain and dividend income on the

direct equity portfolio recommended The underlying investments are made up of small and medium sized company shares listed

on the Alternative Investment Market (AIM) If held for two years the underlying holdings of the investment strategy will be granted

Business Property Relief (BPR), meaning the total ISA fund value will not be assessed for Inheritance Tax (IHT)

In return for the potential to receive superior returns to those offered by more mainstream investments, you are happy to take a more sophisticated approach to investment where the strategy may not always be straightforward

The performance has predominately been above the sector average since inception Exposure to an AIM portfolio provides access to smaller businesses that have been growing

their earnings year-on-year, a key factor behind long-term performance The individual share(s) recommended have a strong market position and clear advantages

over their competitors The individual share(s) recommended have a proven management team with a record of

success and a clear path to profitability The company shares recommended are already very profitable and offer a business model

that can cater for continued growth

Please bear in mind that the outlook for markets as a whole can change, certain asset classes, and industry sectors will perform better than others and as a result your underlying asset allocation will become unbalanced over time which will need to be addressed to match your attitude to risk.

There may be occasions when an individual fund / share may have a higher risk rating than your overall stated attitude to risk. If this is the case, then the overall risk rating applied to all of the combined funds / shares’ being recommended is still designed to meet your stated risk profile.

I would also stress that higher charges can have an effect on investment performance. In essence, a fund will need to perform better in order to cover the increased charges.



On-going Charges


Event Based Charges

Exit Charges

Investment Strategy <USE THE FOLLOWING IF RECOMMENDING A DFM SERVICE>

I have recommended that your monies be invested with a Discretionary Fund Manager. Discretionary Fund Management ensures the underlying assets of the portfolio are invested in accordance with your specific risk profile and agreed investment objectives. The portfolio is managed on a regular basis and all of the daily investment decisions are the responsibility of your dedicated investment manager. There are a number of advantages associated with a discretionary fund management including:

Your portfolio will be professionally managed on a daily basis to ensure it remains closely aligned to your risk profile and continues to reflect your individual needs and investment objectives.

Provides access to a broad range of shares, funds and assets at institutional terms, some of which are not normally available to private investors.

Provides access to your own dedicated investment manager offering a more personal service, regular contact and bespoke reporting, including consolidated tax statements.

The investment manager can structure your portfolio with IHT mitigation at the heart of its processes

Provides the opportunity to dictate investment preferences e.g. AIM socks, ethical stocks i.e. exclude tobacco etc.

Allows the investment manager to exist “closer to the market” and therefore switch stocks, funds and assets quickly to take advantage of potential investment opportunities.

Provides a pre-determined agreed benchmark against which performance can be assessed.

In view of your stated risk profile and investment objectives, I have recommended that the available monies be invested as follows:

Discretionary Fund Manager Portfolio Name Objective Risk Rating Allocation


<INSERT PROVIDER DETAILS> The portfolio will exclusively invest within unquoted companies with the aim of securing

Business Property Relief (BPR) after 2 years The recommended portfolio offers a transparent asset backed investment service designed

to provide capital preservation, capital gains or income combined with inheritance tax mitigation

The investment philosophy is not to allocate between sectors, but to meet the portfolio’s objectives for Business Property Relief (BPR) through the careful selection of qualifying unquoted companies according to, price and valuation, management attitude and financial structure

They maintain a diverse but manageable portfolio so as to ensure intimate knowledge of the companies they choose to invest in

They provide their investment managers with a degree of flexibility and discretion, whilst having robust control systems in place centrally to ensure they are doing a good job

They provide access to a broad and diverse range of investment vehicles via their portfolio including AIM shareholdings

They have a clear and structured process in place for regular reporting They offer a high level of flexibility to ensure your portfolio is set up to meet your individual

investment goals and requirements The charging structure is competitive when compared to similar services in the market place The research tool I have used to review the market place identified them as offering the

most suitable and competitive service to meet your needs and objectives They have provided us and our clients with an excellent service in the past

I recommend that you contact me regularly to review the performance and continued suitability of the recommended Discretionary Fund Management Service.



On-going Charges



Exit Charges


Further information concerning the past performance of the recommended investment strategy can be found in the section entitled Investment Fund / Portfolio Information at the back of this report.

Further Information and Risk Warnings

Further information regarding the recommended investment can be found in the Key Features Document provided and the Appendix of this report. A summary of the risk warnings associated with my recommendations can also be found in the Appendix of this report.

I can also confirm that a Key Investor Information Document (KIID) has been provided detailing information such as charges, objectives, risk and past performance. The information is designed to assist in making a reasoned judgement on whether it is appropriate to invest in a particular fund or funds.

Alternative Solutions Considered But Discounted

I confirm due consideration was given to a range of alternative solutions but subsequently discounted for the following reasons:

Investment Trusts

The higher risk associated with such investments means they are not suitable for an investor with your risk profile




declared in your annual tax return The switch of funds under an investment trust will give rise to a taxable event. In view of

your circumstances, this is likely to result in a capital gains tax charge The cost of switching funds within the recommended investment bond are generally




Non-ISA Collective Investments / General Investment Account




declared in your annual tax return The switch of funds under a unit trust will give rise to a taxable event. In view of your

circumstances, this is likely to result in a capital gains tax charge The cost of switching funds within the recommended investment bond are generally




National Savings Certificates

They do not meet your stated risk profile You wished to derive an income from the invested capital

Onshore Investment Bond

They are not as tax efficient given your circumstances The fact that a redemption penalty will typically be applied on encashment within the first


Offshore Investment Bond

Your tax position and residency status does not warrant the use of an offshore investment The charges associated with an offshore investment tend to be greater The fact that a redemption penalty will typically be applied on encashment within the first


Pension Planning Products

You have already made full use of your pension contribution tax relief for the current tax year

I understand it is your intention to make use of your pension contribution tax relief for the current tax year at a later date

I confirm that during our meeting we discussed the possibility of investing into a pension product and the tax advantages associated with this form of investment. Although the benefits are very attractive your requirement for future access allowed us to dismiss this option

The tax charge to access the funds if required in the future meant the option was dismissed at this time

The timescale agreed for the available funds was short to medium term, where a pension should be considered a long term investment

Structured Products

You did not wish to lock your money away for a predetermined fixed term Such investments are not suitable given your attitude towards investment risk You did not feel the guarantees associated with such investments provided adequate

compensation for the limit to the potential maximum return that you could receive over the term of investment

You wished to keep your investment strategy relatively simple The underlying charges of such investments tend to be greater

Exchange Traded Products

You felt the potential returns would be greater elsewhere They do not meet with your investment objective You felt the total cost of ownership was greater than what was being marketed You felt that the plethora of structures being marketed complicated your investment

decision You were unsure if you were achieving the correct exposure to the required asset classes You did not wish your investment to undertake securities lending activities You were concerned over the counterparties risk associated to the derivative replication You felt there was a conflict of interest with the ETP provider also acting as a market maker The only available ETP solutions had incompatible domiciles You felt the tracking error of many ETP solutions were too high You felt the tracking differences displayed between the ETP solutions and their benchmarks

was not suited to your investment time horizon

Venture Capital Trusts

You wished to keep your investment strategy relatively simple Such investments are not suitable given your attitude to investment risk You did not wish to lock you money away for a predetermined fixed term The tax advantages are not guaranteed and remain dependent on the qualifying status of

the underlying holdings Initial and on-going Charges are relatively expensive in comparison to other investments VCTs often have poor liquidity due to the volume of traded shares being low Your marginal rate of income tax and or income tax already paid is not sufficient to benefit


Enterprise Investment Schemes & Seed Enterprise Investment Schemes (EIS & SEIS)

You wished to keep your investment strategy relatively simple Such investments are not suitable given your attitude to investment risk Such investments are not traded on a stock exchange so withdrawing cash if required may

be difficult or at times impossible You are considered an experienced or sophisticated long term investor Initial and on-going Charges are relatively expensive in comparison to other investments

You did not wish to lock you money away for a predetermined fixed term The tax advantages are not guaranteed and remain dependent on the qualifying status of

the underlying holdings Your marginal rate of income tax and or income tax already paid is not sufficient to benefit


Unregulated Collective Investment Schemes (UCISs)

You wished to keep your investment strategy relatively simple Such investments are not suitable given your attitude to investment risk You are not a certified sophisticated or experienced investor You are not a high net worth investor They are not subject to investment or borrowing restrictions which ensure a sensible

investment spread They frequently invest in assets that are not available to regulated investments because they

are often riskier or less liquid You did not wish to invest in assets which typically are not traded in established markets Such investments are difficult to value and often highly illiquid The risks to your capital were too opaque Reporting was poor with performance information often being unavailable or unreliable These investments are not covered by the FSCS The scheme operator will not have applied for FSA authorised or recognised scheme status There are typically no cancellation rights

Non Mainstream Pooled Investments (NMPIs)

You wished to keep your investment strategy relatively simple Such investments are not suitable given your attitude to investment risk You are not a certified sophisticated or experienced investor You are not a high net worth investor You were concerned by the unusual, speculative or complex assets of the underlying

holdings These investments are not covered by the FSCS The scheme operator will not have applied for FSA authorised or recognised scheme status There are typically no cancellation rights The pooled product structures are too complicated You did not wish to invest in assets which typically are not traded in established markets Such investments are difficult to value and often highly illiquid The risks to your capital were too opaque Reporting was poor with performance information often being unavailable or unreliable

Important Information

Cost of Services

There are various ways I can be remunerated for my advice and the provision of my services. A summary of the options can be found in our Tariff of Charges document, Services and Costs Disclosure Document (SCDD) or Combined Initial Disclosure Document (CIDD) provided.

A detailed summary of all the charges associated with the advice provided in this report can be found below:

Charges Summary

Proposed ISA Transfer Charges <INSERT PROVIDER>



On-going Charges



Exit Charges


Entry Charges: One off charges taken before or on investment.

Adviser Charge: A fee paid to the adviser for advice and services.

AC Paid by Client: The Adviser Charge will be paid directly by you.

Provider Charge: A charge taken from the premium prior to investment.

Fund Charge: The difference between the buying and selling prices of units or shares in a dual priced fund - often termed a Bid/Offer spread.

On-going Charges: Regular charges, typically taken over a year.

Adviser Charge: A fee paid to the adviser for on-going advice and services.

AC Paid by Provider: The Adviser Charge will be facilitated by the product provider but taken from your funds.

Investment Management Fee: Or Annual Management Charge (AMC). A fee levied by the investment firm paid out of the fund for the costs of investment management and fund administration.

Plan Fee: A set charge typically applied on the plan anniversary to cover provider administration.

Event Based Charges: Ad hoc charges related to specific events.

Fund Switch Fee: A charge to sell one fund to buy another.

Exit Charges: One off fees taken on termination.

Exit Charge: Applicable under the plan or investment rules following early sale, surrender, encashment or transfer.

APPENDIX

Risk Warnings – ISA Transfer (AIM Invested)

In addition to the risks shown below, I recommend you read carefully the section entitled “risk factors” in the Key Features Document provided which highlights any possible disadvantages of affecting this plan.

When undertaking an ISA transfer between two different investment companies, there may be a period of a few days where your funds are not invested. To this end, your fund could materially suffer as a result of movements in the market.

If you decide to cancel your ISA transfer within the cancellation period you will be responsible for passing the monies back to the previous manager. Please note, no guarantee can be made that the previous manager will take the monies back.

This type of investment should be considered for the medium to long-term and based on the smaller company direct equity nature of the underlying investments, should be regarded as higher risk.

The value of the investment is determined by the most recent net asset value of the shares which make up your portfolio, the price of which can fall as well as rise. The overall value of the investment is therefore not guaranteed and you might get back less than you originally invested especially in the early years

Investment into ‘qualifying shares’ in smaller companies will be more volatile and subject to certain specific risks in comparison to larger, more mature companies. Consequently this may result in sudden and substantial falls in the value of your portfolio.

Investing solely in a particular sector or otherwise having an investment plan with a narrow focus may be more risky than investing across a broad range.

For a full explanation of the charges and how they affect your plan, please refer to your personalised illustration and Key Features Documents.

The figures on any quotations provided are for illustration purposes only and are not guaranteed.

Past performance is no guarantee of future returns. The recommendations are based on current taxation, law and practice and the current legal

and administrational framework and are based on my current interpretation and understanding of those, all of which may be subject to change.

The favourable tax treatment of ISAs and your personal circumstances may change over the period of investment and could affect the benefits you derive from them.

Withdrawals taken from an AIM invested ISA will cease to qualify for Business Property Relief (BPR).

Where an income is being drawn immediately, you should be aware that this could have the effect of eroding the initial value of the capital invested.

Smaller company shares can be relatively illiquid, meaning they could be harder to trade, which makes them higher risk.

Notes on Financial Products


You can only invest into an ISA if you are resident and ordinarily resident in the UK for tax purposes. There are two types of ISA available – Cash and stocks and shares and you can save into both types of ISA in any one tax year. However you cannot save in more than one cash ISA or more than one stocks and shares ISA in the same tax year. The main benefits of an ISA are their tax efficiency (see below), the fact that you can usually access the invested monies at any time (although some accounts have a notice period), and they do not have to be reported on your personal tax return.

The annual ISA allowance for the 2013/14 tax year is £11,520. It is possible to invest up to £5,760 in cash with one provider with the remainder of the allowance being invested in stocks and shares with either the same, or a different provider. The ISA allowance will increase in line with CPI on an annual basis.

You can transfer all of the money you put into an ISA in earlier years or only some of it, if you wish. However, if you want to transfer the money you have invested in an ISA in the current tax year, you must transfer all of it. Money from a cash ISA can be transferred into either another cash ISA or into a stocks and shares ISA, but a stocks and shares ISA can only be transferred into another stocks and shares ISA.

Taxation

The interest on a cash ISA will accrue free of any taxation. As for Stocks and Shares ISAs, there is no capital gains tax to pay on encashment. The notional 10% tax on equity dividends ceased to be paid to ISA managers from 5th April 2004, whilst the 20% tax credit on interest from fixed interest securities can continue to be reclaimed indefinitely.

AIM Investing

The government changed the ISA rules on 5 August 2013 to allow AIM shares to be held in an ISA. These new rules are part of a wider government initiative that aims to encourage investors to discover the benefits of smaller companies.

Created in 1995, AIM (formerly The Alternative Investment Market) is the London Stock Exchange’s international market for smaller growing companies. A wide range of businesses including early stage, venture capital backed as well as more established companies join AIM seeking access to growth capital. AIM has now developed into a highly flexible public market easily accessible to both investor and company. AIM is now home to around 1,100 companies with a combined worth of more than £60 billion (source LSE June 2013).

AIM has three investment indices - the FTSE AIM UK50, FTSE AIM100 and the FTSE AIM All-Share Supersector. The companies on it, benefit from a high public profile and strong interest among a growing and increasingly sophisticated investor base. Investors ranging from private individuals to global institutions regard AIM as an excellent place to find investment opportunities in young, fresh, entrepreneurial and growth-orientated businesses from circa 26 countries. They cover a wide range of market sectors and sub-sectors, providing all types of investors with a vast range of choice in seeking out businesses to fit their investment profile.

Investors wishing to buy or sell shares in AIM stocks will typically either invest directly without advice or deal through a stockbroker in a traditional way. Due to the tax breaks which are currently available, many brokers run specialist AIM portfolios which have been set up with the intention of mitigating Inheritance Tax (IHT). As tax law stands at the moment, qualifying AIM companies (which exclude certain types of company such as investment companies or those involved in real estate) are treated as business assets and thus qualify for Business Property Relief on death.

Business Property Relief (BPR)

Business Property Relief (BPR) is a tax relief provided by the UK Government as an incentive for investing in specific types of trading companies. It was introduced by the Government in the Inheritance Tax Act 1984, and has since been extended to investments in certain types of unquoted companies (not listed on the main stock markets) to encourage investment into this area.

Once assets qualifying for BPR are held for two years, they are exempt from IHT (providing they are still held at the time of death). This effectively means that they fall out of the owner’s estate with a potential tax saving of up to 40%. The shareholder does not have to be directly connected with the running of the company, for example as a director or employee, to benefit from the relief. The definition of ‘unquoted’ is not quoted on a recognised stock exchange although shares quoted on the Alternative Investment Market (AIM) are also eligible for this relief. The unquoted company would have to meet certain criteria to be eligible for (BPR), including being a ‘trading’ company within the meaning of the relevant legislation for relief to apply to its shares. A shareholder would become eligible for (BPR) once he had held the shares for at least two years.

In the event of the death of the investor within the two year qualifying period, once probate has been obtained, the portfolio can be transferred to the investor’s spouse without restarting the qualifying period for BPR but will lose its ISA status. Where this is not possible or suitable, the portfolio will be treated in the same manner as if invested in companies quoted on the London Stock Exchange.

Collective investments, such as OEICs, with funds investing solely in unquoted company shares do not qualify for BPR.