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7th May 2024
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There is a common misconception about the difference between an investment wrapper and the investment itself, so let’s look at the differences in their simplest terms.

In the past, if an ISA was purchased with an investment company, it would hold a specific fund from that same investment company. For example, a Jupiter UK equity fund could be held in a Jupiter ISA.

A modern ISA is more often than not held on an investment ‘platform’. On this platform, a variety of investments can be placed – holding shares, pensions, commodities, etc, all from different companies.

However, it’s important not to confuse the two and give undue credit or blame to the investment platform provider or tax wrapper rather than the actual investment itself. With an ISA purchased with Fidelity’s platform, for example, you could hold Fidelity’s own funds in the ISA, or indeed a fund by another company.  However, not all funds or other qualifying investments are available on all platforms.  There is a lot of overlap but one of the things you need to check when selecting a platform, is whether the investment you want is available on it.

Regardless of what platform or tax wrapper you use to buy the investment and bearing the costs and charges that go with that choice, the performance of the particular investment remains the same, but it may benefit from different tax treatment. It’s important to understand the suitability to your individual requirements, which your Ascot Lloyd Independent Financial Adviser can assist with.

Investments and wrappers

There are numerous layers to an investment, each one with different charges and tax implications.

Many highly sophisticated investors purchase individual company shares or other stocks directly, skipping the wrapper and fund levels of this diagram. This approach would not be recommended for less experienced investors.

At the highest level, choosing how to buy and hold an investment between an individual, his/her family or company is one of the most significant choices for both tax and personal reasons.

After this, choosing the wrapper type and provider is likely to involve research into the type of wrapper that is most suited to your needs, then finding a provider with the appropriate combination of costs, administrative capabilities and investment options.

Within the wrapper, it is important to think carefully about the portfolio. Will you invest in stocks and shares directly, or use funds? Again, there is a huge universe (many thousands!) of funds to choose from, each with different costs, objectives, and many other considerations that need to be considered before investing.

Within this is where your cash is actually invested, where our goal is to grow your wealth for the future. Your adviser will sit outside and above this process, guiding you on every step of the journey, picking the most suitable and appropriate options at each level from our robust research and continuing evaluation of the different markets.

As you can imagine, with such a wealth of options our independence is crucial.

We have no obligation to pick any specific owner, investment wrapper, or fund. Our objective is the same as yours – to help you maximise your return on life by investing and spending your money in line with your personal situation and the outcomes you want to achieve.

Your adviser can help you to understand your investment options, invest at a level suitable to your needs, explore your options and utilise their expertise for your benefit.

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Past performance is not a guide to future performance and may not be repeated. Investment involves risk.

The value of investments and the income from them may go down as well as up and investors may not get back any of the amount originally invested. Because of this, an investor is not certain to make a profit on an investment and may lose money. Exchange rate changes may cause the value of overseas investments to rise or fall.

This communication is for information purposes only. Nothing in this communication constitutes financial, professional or investment advice or a personal recommendation. This communication should not be construed as a solicitation or an offer to buy or sell any securities or related financial instruments in any jurisdiction. No representation or warranty, either expressed or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein, nor is it intended to be a complete statement or summary of the securities, markets or developments referred to in the document.

Any opinions expressed in this document are subject to change without notice and may differ or be contrary to opinions expressed by other business areas or companies within the same group as Ascot Lloyd as a result of using different assumptions and criteria.

This communication is issued by Capital Professional Limited, trading as Ascot Lloyd.  Ground Floor Reading Bridge House, George Street, Reading, England, RG1 8LS.  Capital Professional Limited is registered in England and Wales (number 07584487) and is authorised and regulated by the Financial Conduct Authority (FRN: 578614)