3 min read 24 Jun 22
Like the latest smartphone, investment platforms can come with an awful lot of bells and whistles. That’s especially true when it comes to tools. So it’s always been an aim of the M&G Wealth Platform to focus on the tools that advisers tell us they actually need and use.
We have the added advantage that our tools have been developed by the M&G Wealth Technical team. So while they are for illustrative purposes only, you know they’re going to be flexible, intuitive and based on robust calculations.
Let’s take a quick tour.
A feature that advisers have told us they love is the ability to run different scenarios to show instantly and visually to clients the potential impact of different financial-planning decisions and/or different market conditions.
Our Investment Calculator has to be our most popular tool when introducing clients to basic investing concepts. By using a range of market return assumptions, it demonstrates the accumulated fund value that could be achievable by investing over a period of time. It can also calculate the investment likely to be required by a client to reach a particular savings goal.
Complementing the Investment Calculator (and especially relevant right now), our Inflation Modeller tool shows the impact of the rising cost of living. By allowing you to demonstrate how different rates of inflation can reduce the real value of a client’s capital over time. It can offer a compelling reminder of the need to hold assets with above-inflation growth potential.
For clients looking to invest for educational costs, our School Fees Calculator can work out the investment needed in an offshore bond to fund school or university fees. It can also calculate the tax payable on withdrawals. Or for those setting up a trust, our Inheritance Tax Calculator can work out the potential IHT liabilities when establishing a discretionary Gift Trust, Discounted Gift Trust or Loan Trust.
Investment bonds (aka insurance bonds) continue to be a mainstay of financial-planning, so we’ve also included two tools to support them. If you’re discussing different vehicle options with a client, our Collectives & Bonds Calculator lets you show how returns generally compare between onshore bonds, offshore bonds and collective funds such as unit trusts and OEICs.
And if you do choose to use investment bonds, our Bond Gain Tool helps with navigating the complex ‘top-slicing’ bond rules. It allows you to model the potential gain on a bond, taking into account different levels of withdrawal/surrender and a bond’s premium and withdrawal history.
Helping clients navigate the rules surrounding pensions can be challenging. So M&G Wealth Platform features seven pension-specific tools to address areas that advisers have told us repeatedly come up in meetings.
To help optimise contributions within the pension rules, our Annual Allowance Calculator shows how the annual allowance could affect a client. It can show whether the standard or tapered allowance applies to them, as well as the amount of unused allowance and carry forward they have available (see the Case Study below).
Continuing with the annual allowance, we’ve also featured a Defined Benefit Pension Input Amount Tool. This can calculate the estimated recommended ‘pension input amount’ for client in a DB scheme in order to work out their annual allowance usage.
Tax, of course, is a critical issue for pension planning. Our Tax Relief Modeller lets you explore how pension contributions could affect a client’s tax position, and calculate their tax position regardless of any further pension contributions. A Protected Tax Free Cash Tool can calculate the scheme-specific protected tax-free cash amount for money purchase arrangements on or after 6 April 2012. For clients looking to start taking benefits, there’s an Emergency Tax Tool, which can calculate the impact of Emergency Tax on the payment of an Uncrystallised Fund Pension Lump Sum (UFPLS) and the first payment of drawdown.
You and your client can also explore different pension contribution scenarios together. Our Salary Sacrifice Calculator can examine the effect of salary sacrifice on a client’s pension, from lowering pension contribution costs or increasing contributions at the same cost. Or with our Redundancy Sacrifice Calculator, you can understand the effect of redundancy sacrifice from the taxable element of a redundancy payment on a client’s pension.
The team endeavours to keep the tools and results provided up to date with applicable legislation and HMRC practice. However, changes may occur without notice and the tools might not be immediately updated to reflect them.
The illustrations and calculations from the tools can all be saved as excel or csv files for inclusion in client reports or presentations.
We’d love to know what you think of any of these tools. Please try them out next time you are on the M&G Wealth Platform. And tell us what else would support your financial-planning discussions with clients so we can continue to make the platform as relevant and useful as possible.
Case study: Using the Annual Allowance Tool
Peter is a higher earner. He has received a £60,000 bonus from his employer and wants to pay this into his personal pension scheme. However, he is unsure if he is allowed to, as it is more than the £40,000 Annual Allowance. Peter has previously breached his Annual Allowance limits for pension contributions and wants to know if he can do this again. Peter’s employer also pays into his company DC scheme.
By using our Annual Allowance Calculator, his adviser can see:
Using this information, his adviser can then discuss with Peter the most appropriate contribution strategy.
The information contained in this page is for professional Financial Adviser use only. If you are a private investor, please visit the Private Investor section or contact your Financial Adviser for more information.