Investment Accounts

Experience Makes the Difference

Investment Trust Benefits

Investment Trusts and Closed-end Companies:

  1. Have a Board. The Fund Manager has to report to the Board and take his remit from them. Thus the corporate governance around these trusts is more robust than with an Open-ended Trust where the Fund Manager reports to Trustees.
  2. Can borrow money which is referred to as have gearing. This, if used correctly can be a major enhancer to performance and/or income generation. It can, of course, produce the opposite if not controlled correctly.
  3. Do not always cost what they are worth. Value can be had in purchasing a trust at a discount. This will enhance your income as well as capital return as you can purchase more shares for the same amount of money. With Unit Trusts you pay the price they are worth. Discounts can widen and therefore have a negative impact on the growth performance however over the medium to long term this should not be noticeable.
  4. Have the ability to retain 15% of the income received to add to an income reserve that, in times of need, can be dipped into to maintain the dividend paid, or even increase it. When BP cut the dividend it did not affect any dividend payments from Investment Trusts as they could dip into the reserve. Indeed many still managed to increase their dividend and some have done this for more than 40 years. On the other hand Unit Trusts and their like had to reduce their dividend.
  5. Will not suffer as much if there is a run on the book. If large numbers of holders of a Unit Trust want out the Fund Manager may be forced to sell some of his underlying holdings to bail them out. With Investment Trusts et al there is no need to sell any holdings and the portfolio remains as planned. Equally the Manager will not be forced to buy in at the top price. Again, proven very useful in the latest market crisis.
  6. Have never paid commission to advisers thus utilising their assets purely for investing. RDR has tried to stop most commission being paid from open-ended trusts to advisers and this may narrow the gap between the two types of funds but that remains to be seen, since Investment Trusts have responded by reducing their fees further.
  7. Dealing is T+1, meaning that if selling your holdings you will have the cash in your account the following day. Unit Trusts can take days.
  8. Where the underlying investments are Property shares, the shareholder is never in a position where the Manager can place a moratorium on the sale of his shares for any fixed period. Compare that with holders of Unit Trusts where this can and does happen to the detriment of the investor when special circumstances arise.

My Investment Style

At Pigotts I offer a choice of three investment accounts, please click on the tabs for following information about these accounts:

A bespoke service – this account is for you if you wish your investments to be tailored to your changing needs.

The aim is to produce a balanced total return derived from a well-diversified portfolio invested on a global basis. Your holdings will not only comprise investments for capital growth but others that provide income, and some that provide both. Any income received can be reinvested or paid in regular variable amounts to your bank. It can comprise a General Investment Account (GIA), an ISA, a Personal Pension or SIPP and a Pooled Deposit Facility (if required). If you wish to find out more please contact us.

If your need is for higher income then The Salisbury Extra Income Account could be for you.

This account provides extra income that is paid in regular fixed amounts to your bank. It should pay out far more than any Building Society, as it consists of up to 20 funds chosen from a diverse field of global equities, bonds and property. Most of the funds have consistently grown their dividends year on year. This is crucial if you are to avoid inflation eating into your income. Investment Trusts and other closed-ended companies are particularly good in providing a growing income over a long period. Find out why.

The fixed amount of income is paid monthly, or quarterly, to your bank account.

If there is an excess of income this will be used to purchase more investments that will in turn provide more income, or increase the fixed amount received. As you would expect, capital growth will be limited. The intention is to grow the income but this is not guaranteed and, in the worst market conditions, income may even reduce. If this happens I will do my best to maintain payment of the fixed amounts of income but that cannot be guaranteed.

Owing to the relatively simple nature of this account the charges are much reduced to reflect this. If you wish to find out more please contact us.

This account is for those requiring capital growth and who accept an increased exposure to risk. Some dividends will be received mainly to satisfy management charges and any excess will be reinvested for growth.

This account is also run on a bespoke basis and funds are chosen from my Approved List, there is an ISA facility and I will use any ISA allowance you have each year to transfer stock and / or cash to it from your General Investment Account (GIA) so as to reduce or avoid your paying CGT as far as possible. If you wish to find out more please contact us.

Initial Free Consultation

Initial consultation is free with no obligation to proceed. As soon as it is known what is involved then the initial set-up fee (no VAT) can be worked out with any rebate that might apply later. Pigotts charge for purchases (not sales) and for managing your account – with a potential for discounts. For details of both Pigotts’ and Transact’s charges and discounts please click here.

VAT exempt charges

Although Pigotts is purely fee-based Transact take the charges as commission automatically from your account and if there is an initial charge the client pays us direct, exempt of VAT. For details of both Pigotts’ and Transact’s charges and discounts please click here.

Discounted charges

Pigotts’ and Transact’s annual management charges have discount mechanisms. For more information on discounts please click here.

Nominee Account

The legal ownership of your account belongs to Transact but the beneficial ownership belongs to you. This has been the “smart” way to run clients’ investments for some years. Share Certificates, Dividend cheques and Transfers are obsolete. All your holdings will be registered on CREST through Transact who deal with the day-to-day administration of market trading, the allocation of dividends and processing any corporate actions. This enables, for example, sale proceeds to be credited to your account the next working day after the sale (T+1) and the cash earns interest immediately.

Your Transact Wrap Account

can include the following:

  • General Investment Account
  • ISA Stocks and Shares Facility
  • SIPP/Personal Pension Facility
  • Qualifying Savings Plan
  • Onshore/Offshore Bonds
  • Pooled Deposit Facility

This hassle-free administration means that there is no need to file mounds of paperwork from various providers or managers.

The Pooled Deposit Facility holds reserve cash, ring-fenced against investment and earns a competitive rate of interest. Cash is spread across four banks to make sure each Client is protected up to £300,000, subject to amounts of cash that may be held outside Transact in any one of the four banks used.

Competitive Rate of Interest

All cash, wherever it is in your account, receives a competitive rate of interest paid monthly, with basic rate of tax deducted by Transact.

Reporting

Transact send you two six-monthly valuations, one as at 6th October and one as at 6th April. The latter is usually sent in May with a 12 month Statement and Consolidated Tax Certificate that can be sent to HMRC with your Tax Return. This makes filing your income tax return much simpler.

Pigotts also send you a Summer Investment Update together with Performance information. Quarterly Market Updates are also sent to you outlining current strategies given market climate. Current valuations and statements, for any period, are available whenever requested. Before a Purchase or Sale you are sent, via your preferred correspondence route, an Investment Advice Note (IAN) setting out the advice and reasons for action. IAN conditions are set out in the Letter of Engagement.

From time to time you will also be sent reports and news items on relevant topics.

Web Access to Transact

In addition to the above reports you can access your account at any time with your secure PIN. You can view the current valuation that uses closing prices from the previous trading day and the Transaction Listing for any period. You can also deposit and withdraw cash direct from your Pooled Deposit Facility, if you have one.

Level of Risk

All investments involve a degree of risk to your capital and you are accepting this by deciding to invest, indeed, you should contemplate carefully the appropriate level of risk you are prepared to take. We can help with this at our initial meeting or discussion. The nature of risk can vary and our Understanding Risk document and Questionnaire helps you gain a good insight into this often-misunderstood subject. When choosing your Personal Risk Profile you should assess your personal financial needs and aims.

The Chichester Account The Salisbury Extra Income Account The Winchester Extra Growth Account
General Investment Account tick tick tick
ISA Facility tick tick tick
SIPPs and Personal Pensions tick tick tick
Investment Aim Balanced Total Returns Higher Income, lower Capital Growth Higher Capital Growth, lower income
Activity Medium Lower Higher
Charges Standard Lower Standard
Income paid out regulalry Irregular amounts Fixed amounts No
Longevity Medium / Long Term Medium / Long Term Short, Medium & Long Term
Wealth Warning: The value of your investment may go down as well as up. Past performance is not a reliable guide to future returns.