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BFS offers IFA guide to zeros

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&#39s guide add-resses misconceptions about zeros, including

commission payment.

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&#39 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&#39 needs and attitude to investment.

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