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Independent Financial Advisers based in South Wales



are forms of pension insurance entitling you to an income for life.  How much you receive is determined by the rate the annuity provider offers.  Annuity rates are determined by gilt rates and life expectancy.  The types available are single-life which covers just you or a joint-life which pays an income after you die to your partner or spouse until they die.  There is also an enhanced annuity, where life expectancy is reduced and therefore offers a higher retirement income as the annuity may not have to cover as many years.

Attitude to Risk

is the ability or capacity to take a risk on investments.  This will depend on your overall personal circumstances.  Only you can judge what level of risk to take and feel comfortable with.  All investments carry a degree of risk so you should never invest more than you can afford to lose.

Capacity for Loss

is your ability to withstand negative returns on your investments.  It is one of the most important elements of investing as it will impact on the nature of your portfolio.  An investor who could withstand a 25% loss in his portfolio without it affecting his ability to meet his long-term goals may be able to invest more aggressively in order to achieve potentially higher returns than someone who couldn’t afford to lose more than 10%.

Capital Gains Tax

is a tax that is levied on the profit from the sale of property or investments (chargeable assets) that have increased in value, with the exception of gifts to your spouse, partner or charity and NISA’s, UK government gilts, premium bonds, betting, lottery or pools winnings.  If you have disposed of chargeable assets and the gain falls below the current annual tax free allowance then there will be no tax to pay.  The rate of capital gains tax is 18% for basic rate tax payers and 28% for higher rate tax payers and trusts.  The current allowance is £11,100.

Corporate Bonds

are an important investment class and are issued by a company wishing to raise finance.  When an investor buys a corporate bond they are making a loan to the company as the bond issuer.  By doing this the investor is guaranteed a regular income from the interest payments on the bond.  Upon maturity of the bond the amount of investment is repaid to the investor.   Bonds are excellent at preserving capital if held to maturity and provide a fixed income.

Critical Illness Insurance

is an insurance product whereby the insurer is contracted to make a lump sum cash payment if the policy holder is diagnosed with one of the specific life threatening illnesses on a predetermined list.  The policy may also be structured to pay regular income.  Policies may require the policy holders to survive a minimum amount of days after first diagnosis.  The proceeds of the critical illness plan are free of tax.


is the amount that shareholders own in the form of stock.  It is the risk-bearing part of the company’s capital.  There are two types of equity, ordinary shares which have voting rights and preference shares which do not. Preference share holders rank ahead of ordinary shareholders in a liquidation.

ETF - Exchange Traded Funds

are funds that are traded on the stock market.  The funds are usually index tracking in nature.  They are continuously priced open ended index funds and as such trade throughout the day.  They typically have higher daily liquidity and lower fees making them an attractive alternative for individual investors.

Flexible Access Pensions Drawdown

allows you to withdraw retirement income from your pension fund from your 55th birthday, as and when you like, whilst keeping your remaining pension savings invested.  Usually the first 25% can be taken as a tax free cash sum, with the remaining income being taxable.  This flexibility is only possible with schemes that offer flexi-access drawdown.

Fund Manager

is an investment professional who oversees the investments within a managed portfolio.  They will supervise a team of analysts who perform research on the investments and then make recommendations as to whether to buy or sell. When you invest in a fund part of the fees you pay go towards the fund manager and their team which must be disclosed in the fund’s prospectus.


are UK government securities issued by HM Treasury and listed on the stock market.  These are high grade securities which carry low yields.  There are two types of securities conventional and index-linked.  Conventional are the simplest form and amount to around 75% of the total gilt market.  It is a liability of the government which guarantees to pay the holder a fixed cash payment every 6 months until maturity date.  Index-linked form 25% of the market.  These reflect the real borrowing rate for the government rather than the nominal borrowing rate.  Semi-annual payments are adjusted in line with the Retail Prices Index which means that the coupons and the principal paid on redemption are adjusted to take account of accrued inflation since the gilt was issued.

High Yield Bonds

are high yield paying corporate bonds with a lower credit rating. Therefore they offer higher interest rates than government bonds or high grade corporate bonds to make them attractive to investors.  Issuers of these types of bonds may be companies that are less able to raise finance.

Income Protection Insurance

is an insurance policy which pays benefits to policyholders who are incapacitated and unable to work due to illness or accident.  Benefits are regularly paid after a deferred period has passed and continue until the earliest of death, recovery of health, retirement or the term of the contract.  The income paid to a policy holder who is in the claim is tax free.

Income Tax

is a tax you pay on your income.  Examples of taxable income are employment income, or if you are self employed, the profits that you make, some state benefits, most pensions, interest on savings, rental income and dividends from company shares.  Not all income is taxable, with exemptions being NISA’s and National Savings Certificates, premium bonds or national lottery wins.  The single personal allowance for income tax is £10,600.  Basic rate tax payers pay 20% while higher rate 40% and highest rate 45%.

Inheritance Taxes

are taxes which are payable on a deceased persons estate, depending on whether the estate is larger than the inheritance taxes threshold.  The nil rate band for inheritance tax is £325,000 per person or £650,000 per couple.  It is usually the executor or administrator of the will who pays the inheritance tax using funds from the estate.

Investment Trusts

are public listed companies that invest in the shares of other companies.  They only generate profits for their shareholders by investing in the shares of other companies.  When you invest in an investment trust you become a shareholder in that company.

Life Assurance Bonds

are a common form of investment which are in the form of a non-qualifying life assurance policy and are funded by a single premium.  The bonds will have only a nominal amount of life assurance, usually 101% of the capital value of the investment.  These bonds are issued with lives assured and capital will be paid back as a claim on the death of the policyholder.  They are a common form of investment and will usually lead to a chargeable even gain assuming there is a profit.  They do not generate income.

Life Insurance

is an insurance that pays out a sum of money on the death of the policy holder over a set period of time.  It can help protect your family from financial worries that could be faced should you no longer be around.  There are two types of life insurance, they are level term assurance (to protect your family financially) and mortgage term assurance (specifically designed to pay off the mortgage).

Managed Portfolio

is a service for clients who have not got the time, inclination or expertise to manage their investment portfolio.  The day to day management of your investment is delegated to a team of investment experts who in turn choose options that are right for each investor.

New Individual Savings Account

is the new improved ISA which has a higher tax free savings threshold.  Your investment can either be held as cash or stock and shares or a combination of both, giving greater flexibility and the ability to get a better return on your investment.


is an open-ended investment company and is a popular way to invest in the stock market.  Your investment is pooled with that of other investors which means it can be spread across a far wider range of investments helping to spread the risk to your investment.

Pension Accumulation

is making sure you save enough in your pension pot to fund a comfortable retirement.  The level and length of contribution paid over your working life and the growth the funds enjoy will impact upon your resulting pension fund and income.

Pension Drawdown

is a personal pension plan from which you can draw an income.  It allows you to leave your pension fund invested while drawing an income.  After age 55 you can draw as much as you like when you like.  A quarter of the fund can be taken tax free with the remaining income drawn being taxable income.

Pension Fund

is a tax exempt fund that is specifically designed for retirement benefits.  The fund is accumulated by way of contributions from employers, employees, or both.  It provides a retirement income to you from age 55 onwards, usually when you have retired from employment.

Range of returns

are achieved through statistical modelling to provide a realistic range of expected returns going forward based on past performance.  Returns are not guaranteed and are only an illustration of the range of potential gains or losses.


is the process of realigning your portfolio of assets by periodically buying or selling assets in your portfolio to maintain your original desired level of asset allocation.  Securities that go up in price with naturally become a larger portion of your portfolio and those that go down in price will make up a smaller part of the portfolio.


is the probability that an actual return on an investment will be lower than the expected return.  Risk is measured by how far the actual return has varied from the average return over a historical period.  Volatility and high levels of variation in the expected return add to risk.


represent ownership of a company and when you purchase shares of a company you become one of the company’s owners.  A company sells shares as a way of raising long term finance for the business.  The owner of the share is then entitled to a distribution of the profit payable as a dividend depending on how many shares are owned.


is a self invested personal pension, a pension plan that enables the holder to choose and manage the investments made.  It works in a similar way to a standard personal pension with the main difference being that you have more flexibility with the investments you can choose.  It gives you more freedom to choose and manage your own investments.  They may however have higher charges than other personal pensions so tend to be more suitable for large funds and for people who are experienced in investing.


(Small Self Administered Scheme) is a type of occupation pension scheme which is trust based and established, usually by directors of limited companies for specified employees of that company.   The SSAS has the same investment opportunities and range as a SIPP.

Term Assurance

is a life insurance which provides coverage at a fixed rate of payments for a limited period of time, the term.  It is designed to pay out a lump sum if you die within the plan term, with the lump sum amount and period of cover chosen by you.  Once the policy has expired it will provide no benefit cover or cash in value.  They can be level (the sum assured will not change), decreasing (the sum assured will decrease by a certain amount each month) or increasing (the sum assured will increase each year in line with inflation or a fixed rate agreed at the outset).


(Undertakings for the Collective Investment of Transferable Securities) is an investment company that buys and manages investment.  A UCITS means it is possible to market the vehicle across the EU without worrying which country it is domiciled in.  The creation of this system brought costs down for fund providers because it means they no longer had to create a new investment vehicle for each country in which they intended to market the product.

Unit Trust

is a trust formed to manage a portfolio of stock exchange securities, in which investors can buy units.  They are open ended investments which means that there is not a finite number of units in issue, and these can increase or decrease upon the net sales and repurchase by existing unit holders.

Wealth Management

combines personal investment management, financial advisory and planning disciplines directly for the benefit of high-net-worth clients.  Meeting the needs of the clients by providing the appropriate financial products and services available to them.  It encompasses all parts of a persons financial life.

Whole of Life Insurance

is designed to last as long as you do.  A regular premium is paid and when you die the policy pays out a lump sum to your loved ones.  A claim is assured and the policy is guaranteed to pay out at that point, whenever it might be.  It is more expensive than term assurance because a claim is inevitable.

Wrap Platform

is a secure internet based account that lets you view your assets in one place as well as the current performance of investments at any time.  The name wrap is because client investments can be wrapped up in a single account.  By holding all investments in one place you can see everything at a glance giving a clearer view of your client base and individual clients.  They are made up of ISA’s, SIPPs and offshore bonds that keep the investment in a tax exempt environment.