To help you create ISA prospecting letters or emails for clients, we’ve produced some suggested wording that highlights the benefits of investing in an ISA from a client perspective. This wording can be used in conjunction with our client-facing guides.
ISA letter sample
Client guide - ISA
Client guide - Junior ISA
The Bed and ISA facility offers the ability to move client investments from an Investment Account into an ISA up to the current maximum ISA allowance.
Bed and ISA is an online process through the client summary screen for sole to sole accounts. Once you have your client in context, select the Actions menu and Bed and ISA. Where the ISA holder is not a holder of the Investment Account (e.g. spouse to spouse), you will need to use a Third-party form and a Deed of Gift form.
You can easily run a capital gains report at client level prior to submitting a Bed and ISA instruction.
Watch here how to run a capital gains report for your clients.
If you are selling funds from a client’s Investment Account into an ISA which is linked to a model portfolio, then the funds from the Investment Account will automatically be spread across the model portfolio in the ISA. The option to buy back the same funds as sold in the Investment Account is not available. Should you wish to do this, then please open a new ISA account on behalf of the client.
Where you choose to sell a specific investment and are selling more than 90% of its value, we process this as a unit-based deal (the reason for a 90% tolerance level is answered in the question below). Due to forward pricing, this could mean the deal is priced with more or less than the notional value at the time the instruction is submitted.
If it’s more, we place the requested amount into the ISA with the balance remaining in Product Cash within the client's Investment Account.
If it’s less, you could have a shortfall in the ISA funding. Should a shortfall occur, our system will look to fund this from any available balance within Product Cash in the client’s Investment Account.
To prevent a shortfall from occurring, there is the ability to oversell within the online Bed and ISA journey. This allows you to sell more than the amount required, preventing a shortfall in funding of the ISA. Again, any excess above the ISA allowance will remain in Product Cash within the client’s Investment Account.
The reason for implementing a tolerance is to avoid deal failures when assets drop in value. For example, if a client has £1,000 in a fund and requests a sell deal of £950 (95%) and the price drops so that their holding is only worth £940, then the deal cannot be executed. This is a common approach across platforms.
The tolerance is set at 90% so that it is still effective in periods of extreme market volatility. It’s still possible to achieve a sell of between 90% and a 100% of the value of an asset, it just needs to be done on a unit basis. This will of course mean the client won’t know the exact amount realised until after the relevant pricing point.
This is not available through the Bed and ISA process. However, you can sell from the Investment Account to the Cash Management Account (CMA) provided the Investment Account is in the client’s sole name. This cannot be done from jointly held Investment Accounts. When the money has settled, you can then phase an amount into the client’s ISA from the CMA as a separate instruction.
Once the Bed and ISA deal has been placed, the sell deal is placed at the next available dealing point if submitted online. If submitted by paper, this will be processed at the next available dealing point following receipt of the application. The buy into the ISA account is processed once the sell deals are priced. This can vary depending on the investment being sold. If you have sold to cash, and you want to use that cash to buy into the ISA, you will need to wait for cash to settle before you can place the Bed and ISA instruction.
The order in which you do this depends on the value of the Investment Account.
If the Investment Account has a value substantially above the amount you want to transfer into the ISAs, then you can place the transactions one after the other.
If the Investment Account value is close to the total amount you want to move into the ISAs, then you may want to organise one Bed and ISA first and let this transaction settle to see what is remaining before you organise the Bed and ISA for the other holder. Alternatively, you could sell to cash, wait for this to settle and then process both Bed and ISA instructions. Care should also be taken where you are selling near to the full value of a fund on the first submission.
Overview