Split-capital investment trust specialist BFS Investments is offering a
free IFA guide to zero-dividend preference shares.
Zeros are a type of share which aims to provide inv-estors with capital
returns when the trust is wound up.
The company's guide add-resses misconceptions about zeros, including
BFS packages zeros as part of a product portfolio offering initial
commission of 3 per cent and 1.5 per cent trail.
It says an advantage of zeros is the ability they give IFAs to make an
educated and informed analysis of risk and returns compared with some other
types of investment, including deposit acc-ounts, where returns vary with
interest rates and cannot be predicted.
The guide lists flexibility as another benefit of zeros because
clients' investments are not locked in until the repayment date and can be
bought and sold on the stockmarket at any time.
BFS says zeros can be a very tax-efficient vehicle and provide bigger tax
breaks than Isas because the absence of dividends on zeros means there is
no income tax to pay.
The guide also tells IFAs how they can choose zeros with varying degrees
of risk to suit each clients' needs and attitude to investment.