Adviser guide - IFISA

17 16 CASE STUDIES INTERACTION WITH OTHER ISAS Interaction with other ISAs Case Studies 1 Miss A has a conventional ISA portfolio and pension built up over several years. PENSION Looking specifically for more ethical underlying investments, she invests half her ISA allowance in debt-based-securities within an IFISA wrapper. The DBS is a small-scale community renewable energy installation that is local to her. Tax-efficient transparency UNDERLYING INVESTMENTS KEY BENEFITS KEY RISKS AIMED AT (TYPE OF INVESTOR) TYPICAL ANNUAL RETURN CASH Cash deposits Safe and often easy to access Low interest rates can mean loss of purchasing power – money loses value due to inflation Cautious 1% STOCKS & SHARES Shares (incl. shares listed on AIM) Higher potential returns and can target either income or growth, or a combination. High volatility Market risk Medium-high risk Wide variation, typically the highest returns over longer periods (5-10 years) but generally 5-8% IFISA (P2P) Peer-to-peer loans Less volatile than shares with higher returns than cash and often asset-backed with the prospect of uncorrelated returns. No FSCS cover, capital is at risk and varies depending upon whether the loans are secured / unsecured Medium risk Depends on the portfolio, but typically 5-6% IFISA (DBS) Debt based securities Less volatile than shares with higher returns than cash and often asset-backed with the prospect of uncorrelated returns. Capital is at risk, varies depending upon the terms and quality of the underlying assets Medium risk Typically 5-8% Other ISAs available • JUNIOR ISAS for those under 18 • HELP-TO-BUY ISAS/LIFETIME ISAS which are topped up by the government and subject to rules around who can qualify and the timing of withdrawals.