ADVISED
Explicit Pricing Model
The Sale for Regular Payment Service
How Cofunds helps you make regular payments
by selling from your investments
Before setting up a Sale for Regular Payment you must talk to your adviser and ensure you understand the processes set
out in Section 1. A Sale for Regular Payment will have consequences on your investment.
SECTION 1 explains what a ‘Sale for Regular Payment’ is, how it works and answers some of the most commonly
asked questions.
SECTION 2 is your application form to your adviser to set up a Sale for Regular Payment. You should complete and sign
Section 2 to provide your confirmation, while your adviser should keep Section 2 as a record of your instruction.
You should keep Section 1 for your reference.
Throughout this document, unless otherwise stated, where you see a reference to ‘’we’’ or ‘’us’’ or ‘’our’’ this refers to
‘’Cofunds Limited ‘’ (Cofunds)
Issued and approved by Cofunds Limited, Level 43, The Leadenhall Building, 122 Leadenhall Street, London, EC3V 4AB.
Registered in England and Wales No. 3965289. Authorised and regulated by the Financial Conduct Authority (FCA). FCA Registration No. 194734
Section 1: Your questions answered on the Sale for Regular
Payment service
Q1.What is a Sale for Regular Payment?
Q4. How does a Sale for Regular Payment work?
A. A service to help manage payments you have arranged to go
A.Cofunds will calculate whether you have enough money in your
relevant Payment Account(s) to cover any related payments
due to go out that month. This calculation takes place on the
5th working day of the month.
out of your relevant Payment Account(s).
Where you have instructed us to make payments from the
relevant Payment Account(s), but don’t have enough money in
that account to meet the payments due to be paid that month,
you can set up a Sale for Regular Payment to instruct Cofunds
to sell a portion of your ISA and/or investment funds and/or
CPA investments to raise the required amounts
Q2. What is the main benefit and consideration?
A. Benefit – setting up a Sale for Regular Payment removes the
worry of checking every month that your relevant Payment
Account(s) contain enough money to supply your regular
withdrawal/pension drawdown and pay your fees and charges.
Consideration – in a situation where your funds are regularly
sold to meet payments, your investment capital could be
reduced or entirely depleted and you may lose tax benefits or
incur tax liabilities. We provide more details about tax later on.
Talk to your adviser about whether this service is appropriate
for you.
Q3. W
hat payments can I make using a Sale for
Regular Payment?
If the calculation shows that you will not have enough money in
your relevant Payment Account(s) to meet the required
payments, on the 9th working day of the month we’ll sell enough
units from your investments to raise the required amount.
Please note that our calculation only includes funds that are
priced daily – any funds you hold that are priced weekly will not
be considered, even if they are large enough to raise the
required amount.
We’ll sell 10% over the required amount to cover any further
shortfall that may result from market movements between the
date of the calculation and the date of the sale. Any amount
left over following the sale will remain in the relevant Payment
Account to be included in the next calculation.
There are two ways in which we sell units from your investment:
Option (a)
or Option (b) from a fund nominated by you.
from your largest value fund holding;
You can, at any stage, switch between the options (a) and (b)
above please talk to your adviser. If you would like to terminate
the Sale for Regular Payment you should talk to your adviser.
A. For the Cash Account it applies to the following payments:
•
Platform Charges (payments to Cofunds);
Q5. How do I know which of the two methods will
apply to my investments?
•
Regular withdrawals (payments to you);
A. Together with your adviser, you decide whether you would
•
Adviser fees and charges (payments to your adviser).
For the Pension Trading Account (for payments relating to your
CPA) it applies to the following payments:
•
Product charges (payments to the product provider);
•
Platform Charges (payments to Cofunds);
•
Pension drawdown (payments to you);
•
Adviser fees and charges (payments to your adviser)*.
*See Question 11
2 The Sale for Regular Payment Service
prefer us to sell from either option (a) or option (b) in question
4. We call this your ‘Account Level choice’.
•You decide whether you want your Sale for Regular Payment
to apply to your ISA or your investment funds, or both.
•You confirm your choices to your adviser by ticking the
relevant boxes in Section 2.
•If you hold a CPA your Account Level choice of option (a) or
(b) will automatically be applied to the Sale for Regular
Payment instruction on your CPA to fund any product
charges, Platform Charges, pension drawdown and adviser
fees and charges, as appropriate.
Q6.What happens if I have more than one
investment product?
Investments
Held
A. I f you select ISA or Investment
Funds
only,Within
we’ll sell the largest
Investment
Fund
Holdings
or nominatedYour
fundISA
held&within
the individual
product.
If you
select to sell across ISA and Investment Funds, we’ll sell from
the nominated fund if it’s held in both products, or work out the
Sale of
Funds
largest value fund holding across
these
products. This means
that a fund that you hold in both ISA and Investment Funds
could be your largest value fund, even if it is not individually the
largest in either ofYour
thoseCofunds
products.Cash
If you Account
do hold your largest
or nominated fund across ISA and Investment Funds, we’ll sell
units from the fund held in both products in proportion to the
size of your holding – for example if 50% of your investment is
in investment funds and 50% is in an ISA, and your largest fund
is held in both
products,
we’ll raise 50% of the
required
amount
Payment
to you:
Payment
to your
regular
withdrawal
adviser
or
by selling from
the
investment funds and 50%
by selling
from
fromFigure
your Cash
intermediary:
the ISA – see
1. However, if the ISA was
invested infees
a
Account to your
you’ve agreed
model portfolio
we
would
then
raise
the
50%
from
the
ISA
bank account (e.g.
with your adviser
using the model
portfolio process (see Section
1). Your CPA is
for income)
or intermediary
treated separately.
Your largest fund within your CPA is the largest value fund held
within that product that’s the one we’ll sell from in relation to
your CPA. If you’ve nominated a fund at Account Level that
don’t hold in your CPA, we’ll sell from the largest fund instead.
Figure 1: Example of how a largest fund is sold between ISA
and Investment Funds.
Investment Funds
ISA
50% of total investment
on Cofunds
50% of total investment
on Cofunds
Blue
Fund
30%
Red
Fund
30%
Green
Fund
40%
Yellow
Fund
25%
Blue
Fund
25%
Purple
Fund
50%
Blue Fund = (30% of 50%) + (25% of 50%) = largest fund.
The whole of the required amount is raised from the Blue fund,
but split across the two products – so half from Blue Fund in
Investment Funds and half from Blue Fund within the ISA.
The minimum we’ll sell from a single fund is £1 of units. This
means that if, for example, a proportionate sale between your
funds would need to deduct less than £1 from each fund to
meet your required payment, we’ll nonetheless sell £1 from
each fund and thus sell more than is necessary to meet your
required payment. The extra proceeds from the sale will be
credited to your relevant Payment Account.
Q7. What if Sale for Regular Payment can’t raise
enough to meet the payments I’ve arranged to
go out of my account?
Investments Held Within
A. We’ll attempt to sell funds to raise
theCPA
amount required to meet all
Your
the scheduled payments, but if enough money can’t be raised then
some or all of your payments may not be met. The priorities of
Sale of Funds
payments are as follows:
For Cash Account –
Your Cofunds Pension Trading Account:
1. Platform Charge (payments to Cofunds)
2. Regular withdrawals (payments to you)
3. Adviser fees and charges (payments you agreed with your
adviser)
Payment relating to your pension can only be met
by the sale of funds held within your pension.
Payment to you:
Payment to
Payment to your
For Pension
Account
(funds
within CPA)adviser
–
pension Trading
to
or
your
product
intermediary:
fees you’ve
agreed with your
adviser or
intermediary
drawdown (take
regular unsecured
pension product
income from
charges
2. Platform
Charge
(payments
to Cofunds)
your pension)
3. Pension drawdown (payments to you)
4. Adviser fees and charges (payments you agree with your
adviser)*
*See Question 11
provider:
1. Product charges (payments
to the product provider)
If you have chosen option (b) (from a fund nominated by you) and
we cannot raise enough from your nominated fund (or the fund is
not available for trading at that time) we’ll therefore go to the
largest fund owned by you.
If it is possible, we’ll move you to option (a), so that the Sale for
Regular Payment instruction will sell from your largest fund from
now on. We’ll write to tell you if we do this, and notify your adviser.
If, at the time of the calculation, not enough money can be raised
to meet any of the payments you’ve arranged to go out of your
relevant Payment Account(s), we’ll stop your Sale for Regular
Payment instruction for the current month, and will permanently
end any regular withdrawal and/or pension drawdown mandates
you have in place. Any Platform Charges, product charges or
adviser charges will accrue – we’ll attempt to sell assets to pay for
these the following month.
We’ll write to notify you of any changes that are made to
your account.
The Sale for Regular Payment Service 3
Q8. What if market movements mean that my Sale
for Regular Payment can’t raise enough to meet
the payments I’ve arranged to go out of my
account?
A.
At the time of calculation, if it shows we can raise enough to meet
your scheduled payments, we’ll carry out the sale on the ninth
working day of the month.
However, as the sale is four working days after the calculation,
market movements may mean that the sale doesn’t raise the
predicted amount. If this means that there’s insufficient money
within your relevant Payment Account(s) when the payments are
due, we’ll use the money that has been raised to pay the scheduled
payments in the priority order set out in question 7.
Should there not be enough to pay all the payments in full, we’ll pay
as much of the lower priority payments as possible.
We’ll not be responsible for any shortfall, and it will be your
responsibility to make up any difference.
Q9.What if I trade between the calculation and
sale dates?
A. If you ask us to sell or switch investments, or carry out a conversion,
between when we check your relevant Payment Account(s) (on the
fifth working day of the month) and the time we actually sell units
(usually on the ninth working day) this might mean that units we
planned to sell under the automatic Sale for Regular Payment are no
longer available. In these cases unit sales for the Sale for Regular
Payment might be delayed until the tenth working day of the month.
However, we will backdate sales for regular withdrawals to ensure
that the withdrawal reaches you on time.
Q10.Are there any tax implications arising out of a
Sale for Regular Payment?
A. Within a Cofunds ISA or CPA there’s no capital gains tax for
the sale of units.
However, once you’ve withdrawn money from your ISA you’ll
lose the future tax benefits on the amount withdrawn.
For investment funds, you may incur a capital gains tax
liability on the gain made through the sale of units. See the
Investment Funds Key Features
(www.cofunds.co.uk/docs/aub/platformkidfund/)
and speak to your adviser for more information.
Pensions are subject to strict rules regarding withdrawals of
capital. See the Terms & Conditions and Key Features of the
CPA, and your CPA Customer Agreement, to understand
how Sale for Regular Payment applies to your CPA. Speak to
your adviser for clarification.
Please note that payment of charges from your CPA is a
withdrawal from your pension. You will only be able to pay the
equivalent of this charge back into your CPA as an additional
contribution provided you do not exceed your current tax
year annual pension allowance.
Q11.How do you determine which Payment
Account is relevant?
A. Which Payment Account is relevant depends on what
products you hold, the type of charges, and the services your
adviser has agreed to provide. Details are given in the Terms &
Conditions or Customer Agreement relevant to your product.
In some circumstances, Service Charges and Subscription
Charges that have been charged on your CPA cannot be
taken from your Pension Trading Account. In these cases,
the charges will be taken from your Cash Account instead.
If your Cash Account doesn’t contain enough to meet all the
payments that are due to go out of it, we’ll sell funds from within
any ISA and/or Investment Funds products you hold, in order to
meet the shortfall. If you don’t want your funds to be sold to
meet charges, you should add enough money to the relevant
Payment Accounts to meet all payments due to go out.
If you’re not sure whether you should add to the Cash
Account or the Pension Trading Account, please speak to
your adviser. We’ll confirm the relevant Payment Account at
the time your Service Charge and/or Subscription Charge is
set up and confirmed.
4 The Sale for Regular Payment Service
CF20AE 02/14
Glossary
Account level instruction – this is your choice of which fund you
want to use for your Sale for Regular Payment – nominated fund or
largest fund. This is at ‘account level’ as it is set on your Cofunds
Client Reference (account) number and will be applied to all products
that you hold within this account.
Adviser fees and charges – The fees and charges you’ve agreed to
pay your adviser for their services. These can include:
•
One-off fees
•
Ongoing fees
•
Subscription charges
•
Service charges.
What you’ll actually pay depends on what you’ve agreed with your
adviser.
Annual Allowance – The maximum that you, your employer or a third
party can pay into all your pension plans in a pension input period
ending in any given tax year without penalty. The Annual Allowance
for the tax year 2013-14 is £50,000. From tax year 2014-15 onwards
the annual allowance will go down to £40,000.
Applicable Products – the products you’ve agreed with your adviser
that their fees and charges may be applied to.
Capital Gains Tax – If you sell your investment any growth may be
subject to capital gains tax, if you exceed your annual capital gains tax
allowance. Please speak to your adviser for more information
Cofunds Cash Account – an account that allows you to hold your
money that is destined for investment on Cofunds.
Cofunds Pension Account (CPA) – a personal pension arrangement
under the Suffolk Life Appropriate SIPP scheme, which is a registered
pension scheme.
Date of calculation – on the 5th business day of the month we
review your Cash account to ensure that you have enough funds in
your Cash account to pay any withdrawals, charges etc that are due
to go out that month.
Date of Sale – occurs on the 9th business day of the month – if after
the ‘’Date of Calculation ‘’ we see that you do not have sufficient
funds in your account, we start the Sale for Regular Payment.
Fund(s) – general term for a form of investment. It works by
gathering money from investors and invests it according to a clear
set of investment objectives.
Payment Account – this is used as a generic term to cover the
Cofunds Cash Account and Pension Trading Account. Which
Payment Account is relevant depends on the type of payment being
taken and what products you’ve agreed with your adviser to be
‘applicable products’ for their fees and charges. We provide full details
in the terms and conditions that apply to your investment – speak to
your adviser if you’re not sure.
Product – This means an investment product on Cofunds. We treat
investment funds held outside a ‘wrapper’ as a product, along with
ISAs, pensions and investment bonds.
Pension Trading Account for the Cofunds Pension Account (CPA)
– an account that allows you to hold your money that is destined for
investment in your CPA.
Sell – is when you cash in your investment.
Shortfall – the amount by which a financial obligation or liability
exceeds the amount of cash that is available.
Switch – is to take your investment out of one fund and re-invest into
another.
Unit(s) – a fund is made up of units, so the person(s) that are
invested into a fund(s) all own units of that fund(s)
We/us/our – Where you see a reference to ‘’we’’ or ‘’us’’ or ‘’our’’
throughout this document, unless otherwise stated, this refers to
‘’Cofunds Limited ‘’ (Cofunds)
The Sale for Regular Payment Service 5
6 The Sale for Regular Payment Service
Section 2: Instruction to your adviser to set up a Sale for Regular
Payment mandate
This form is intended to help you to give your adviser the authority to set up a Sale for Regular Payment for you. You do not need to
send a copy of this form to Cofunds, but your adviser should keep a copy as a record of your instruction.
Please tick the boxes as appropriate.
1 Client Declaration
I confirm that my adviser has explained the Sale for Regular Payment processes detailed in Section 1 and the possible consequences
of these processes on my investment.
I confirm that my adviser has explained that the Sale for Regular Payment process may result in the reduction of my capital, and/or in
capital gains tax liabilities.
I agree for my adviser to set up a standing instruction for a Sale for Regular Payment in accordance with my instructions below.
2 Client Instruction to Adviser
ACCOUNT LEVEL INSTRUCTION: I choose for the Sale for Regular Payment to be made from my from my
(a) Largest fund OR
(b) Nominated fund My nominated fund is:
I choose for the Sale for Regular Payment mandate to apply to:
My ISA
AND/OR
My Investment Funds The choice of (a) or (b) above is an Account Level instruction and will automatically apply to any Sale for Regular Payment instruction you set
up on your CPA. If you only hold a CPA, please select ISA and/or Investment Funds to set up your Account Level instruction and it
will be applied to your CPA.
Name
Please include the names of all joint holders:
SIGNED
Please include the signatures of all joint holders:
Date
ADVISER CONFIRMATION
Full name of Regulated Firm
FCA Ref No.
Name
Position
Date
SIGNED
Cofunds Limited, Level 43, The Leadenhall Building, 122 Leadenhall Street, London, EC3V 4AB.
Registered in England and Wales No. 3965289. Authorised and regulated by the Financial Conduct Authority (FCA). FCA Registration No. 194734
CF20AE 02/14
Issued and approved by Cofunds Limited, Level 43, The Leadenhall Building, 122 Leadenhall Street,
London, EC3V 4AB. Registered in England and Wales No. 3965289. Authorised and regulated by the
Financial Conduct Authority (FCA). FCA Registration No. 194734
CF20AE 02/14