Wealth Management in Cambridge

There’s a saying when it comes to investing “it’s impossible to control investment returns but it is possible to control costs”. We regularly come across clients paying well over 2% per annum in costs despite being told a much lower headline figure. For example, an adviser or investment manager may say they charge 1% per annum and it would be easy not to give that a second thought. However, if they invest in active funds these add additional costs of between 0.65% and 1%, typically, and then add the cost of the administration platform to that, typically 0.25% to 0.45%, and you could easily be paying over 2% each year. Getting value for money means you should be looking to keep your total costs, including the cost of the investment advice, to between 1.0% and 1.5%.

Tax on your investments and the income from them is effectively another cost and something that can further reduce your investment returns. The obvious taxes are income tax and capital gains tax. However, there are other less obvious taxes including stamp duty, VAT and inheritance tax to consider. Further, there are many tax advantaged schemes that are approved by HMRC and designed to minimize the affect of taxation and or even achieve tax-free income and gains in return for investing in businesses and, therefore, helping the wider economy. There are also more widely used tax advantaged schemes like Individual Savings Accounts (ISAs) and Personal Pension Plans (PPPs) that attract tax relief on the contributions. An independent professionally qualified adviser will help you understand how best to navigate the tax maze to both minimise tax and take advantage of your personal tax allowances and exemptions.