Is the Selestia route any good?

I very much like the pension wrapper. In my view its probably the best pension wrapper for IFAs to use on investments over £30k.

It really depends on the terms you get from the IFA in question. I have done a number of execution only cases for pensions where I have taken 0.1% nominated trail. These people have got the unit trust/oeic funds cheaper than HL but you need about £80k plus for it to make a real advantage.

If it is set up on standard terms then there is no real difference between any of the fund supermarkets apart from a couple of things here and there. Selestia's initial charge bugs me at times as cofunds and fidelity FNW can be cheaper (even when full initial commission is rebated) but the rebate on trail gives good potential.

The annual management charges on the funds are the same across the board so its only the initial you have to worry about. Selestia have free automatic rebalancing if required and free switches.

Service is very good and if there are funds missing from the platform that you want, then they are open to requests to add them. I few of mine have been added. Most recently SWIP funds (apart from Euro Real Estate which is the main SWIP fund I wanted!!! - get that sorted Scouser )

If for what ever reason Selestia went toes up would my money be safe? What are the risks - What protection do I have?

Selestia is owned by old Mutual. So they have a very big parent. Plus, these are unit trust funds so the units are yours. You arent investing in Selestia but you are using Selestia to purchase your investments.

Subject to your answer is there any benefit therefore in splitting my investment between Selestia and Insurance funds?

Thats a bit like comparing cars and petrol. Shall I drive the car to work today or should I take the petrol?

Life funds are not as tax efficient as unit trusts on a like for like basis. However, when used in the right circumstances, they can reduce the taxation on a personal basis. Such as not reducing age 65 age allowance or reducing CGT or not having to pay higher rate tax.

You would only use life funds if your situation merits it so. Otherwise you would do with unit trusts.

Which of the two would an IFA earn more out of?

Selestia's remuneration is the same for all the tax wrappers in default form.

I understand everone has to earn a living - I just want to hang on to my teeth!. I am just curious to know so that I may 'observe' which way my IFA may try to 'persuade' me.

Not knowing your tax position we cant tell which is best but you would expect ISA first (as that is virtually always top of the list) and then the collective investment account for the rest unless there is some reason about your personal taxation that makes life funds better.

Now we are on a roll what are the tax implications of going with Selestia. If I did not touch the investment until I (we) retired (say 6 years) we would both then be under the (current) 40% rate so what would the tax liability be if any?

Ahh, now I should I have read this back to front. I wont edit above. We now know your tax position and a higher rate taxpayer now who will be a basic rate taxpayer in the future would usually be better with ISA and then the investment bond.

So, 7K held back for ISA and the rest investment bond. If Selestia is used, that would be either the onshore or the offshore version.

Of course, the adviser you are seeing knows the facts but based on what you have said so far, the is the probable route.

Dunstonh wrote:

Ahh, now I should I have read this back to front. I wont edit above. We now know your tax position and a higher rate taxpayer now who will be a basic rate taxpayer in the future would usually be better with ISA and then the investment bond.

Probably best to consider using up your CGT exemptions before considering investment bond. Then (and only then) MAYBE an investment bond. With 2 people to invest, you've got £17,600 of gains you can make tax free per year, which on a £150,000 portfolio is 11.7% per annum. Direct investment (ie not through an investment bond) is probably the better route.