A fund platform or investment platform is an online service that allows
investment
Investment is the dedication of money to purchase of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort.
In finance, the purpose of investing i ...
s to be bought online. Fund platforms may simplify the process of investing or provide investments at a discounted rate.
Use
In many cases, investments purchased on a fun platform can then be held on the platform in a range of
tax efficient wrappers. They can be used to purchase shares, bonds and a range of funds from different
fund manager Fund may refer to:
* Funding is the act of providing resources, usually in form of money, or other values such as effort or time, for a project, a person, a business, or any other private or public institution
** The process of soliciting and gathe ...
s. The investments that can be purchased via each platform varies depending on the service provider.
Fund platforms enable investors to buy and hold their investments online all in one place, with a degree of flexibility to alter their investments. Many provide the opportunity to buy assets ''in-specie'', which helps the investor to switch investment without unnecessary charges. These services also cut down on paperwork as transactions are centralized.
Types
Fund platforms fall into two distinct groups: ''fund wraps'' and ''fund supermarkets''. Wrap services are online services where investors access their account details online. Fund supermarkets are generally more transactional and are used for buying funds cheaply online – either by a financial adviser (on behalf of a client) or by the investor themselves.
United Kingdom
In the United Kingdom, individual investors can usually hold a range of investments within several different types of 'tax wrapper', such as:
* Individual
savings account
A savings account is a bank account at a retail bank. Common features include a limited number of withdrawals, a lack of cheque and linked debit card facilities, limited transfer options and the inability to be overdrawn. Traditionally, transac ...
s (
ISAs)
* EPPs
* QSPs or MIPS
*
Personal equity plan
A personal equity plan (PEP) was a form of tax-privileged investment account in the United Kingdom, available between 1986 and 1999.
History
The plans were introduced by Nigel Lawson in the 1986 budget to encourage equity ownership among the wide ...
s (PEPs)
* offshore or onshore investment bonds (also called
insurance bond
An insurance bond (or investment bond) is a single premium life assurance policy for the purposes of investment.
Due to tax laws they are a common form of investment in the UK and some offshore centres.
Traditionally insurance bonds were wit ...
s)
*
personal pension plan, either insured personal pensions or
Self-invested personal pension
A self-invested personal pension (SIPP) is the name given to the type of UK government-approved personal pension scheme which allows individuals to make their own investment decisions from the full range of investments approved by HM Revenue and C ...
(SIPPs).
The investments you can buy via these services and often hold on the platform itself can include:
* direct mutual funds (i.e.
unit trust
A unit trust is a form of collective investment constituted under a trust deed.
A unit trust pools investors' money into a single fund, which is managed by a fund manager. Unit trusts offer access to a wide range of investments, and depending on ...
or
OEIC An open-ended investment company (abbreviated to OEIC, pron. ) or investment company with variable capital (abbreviated to ICVC) is a type of open-ended collective investment formed as a corporation under the Open-Ended Investment Company Regulati ...
) or
investment trust
An investment trust is a form of investment fund found mostly in the United Kingdom and Japan. Investment trusts are constituted as public limited companies and are therefore closed ended since the fund managers cannot redeem or create shares.
...
or SICAV holdings
* individual equities, corporate bonds
* cash
* ETFs
* VCTs
* hedge funds
* gilts
* structured products
* property partnerships.
See also
*
Wrap account
A wrap account (also known as wrap service or tax wrapper) is a means of consolidating and managing an investor's investment portfolio and financial plans. Wrap fee services are offered by many financial institutions. Often wrap services are offere ...
References
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Investment management