Morfitt's Mailshot Issue 13...          Can't see this email properly? View in browser

Morfitt & Turnbull

Issue 13   

Mulligan's Magic Cauldron
It's Halloween time again and you'll be glad to know there has been no zombie photo shoot this year (please refer to issue 7 for a reminder!). With the recent turbulent weather that could be a good thing because if the wind changed I may end up looking like that permanently, although some might say it would be an improvement...

So as it is that time of year here are some Halloween facts:
  Halloween comes from the Catholics - it is a 3 day holiday where saints are honoured and people pray for the recently deceased. At the start of the 11th century it was decreed by the pope that it would last from 31st October (All Hallow's Eve) until 2nd November. "All Hallow's Eve" evolved into "All Hallow's Even," and by the 18th century it was commonly referred to as "Hallowe'en".
  Dressing up at Halloween comes from the Celts for warding off evil spirits.
  If you want to be sartorially exclusive then don't choose the most popular costume this year of a witch, Batman, a vampire, a pirate or a zombie!
  10% of owners dress their pets up for Halloween (this can only be a US statistic!)
  The Halloween business is monstrous with the total spend in America alone estimated to be $6.9 billion making it their second most commercial time of the year. In the UK the spend is a more conservative £315 million putting it behind Christmas and Easter.
  Turnips should be used instead of pumpkins.
  A full moon on Halloween is extremely rare with the most recent being 2001 and before that 1955.
  Halloween is still the Wiccan (the modern pagan witchcraft religion) New Year.
By dressing up, Charlotte isn't scaring
the guys off naturally for once!
  90% of parents admit to sneaking goodies from the trick or treat bags of their children!
  The symbols of Halloween are intentional as black cats, spiders and bats are historically seen as the accompanying creatures of witches.

As it also times with some school half-terms then we can all look forward to having plenty of trick or treaters at our doorsteps......!!!!!


Cofunds have a rethink
The investment platform Cofunds have been charging a £40 p.a. fixed fee for new investments since 1st January 2013 or when clients switch funds within an existing Cofunds account.
      We feel this must have been detrimental to their business and as such they announced on the 7th October that the £40 charge will longer apply. It was because of this punitive charge that this year we have been advising clients, where necessary, to transfer away from Cofunds so it is not incurred.
This will make Cofunds more competitive once more but as always, every client's circumstances will be reviewed individually and those that have already moved to an alternative platform should be assured that it is still appropriate for them.

Adam's Technical...
Relevant Life Policies - an alternative way to protect the family
Life policies are commonplace for making sure loved ones have a lump sum if the worst may happen. This is usually paid for from a personal payment, however Adam now looks at an alternative that is called a Relevant Life Policy (RLP).

This is a policy designed to pay out a lump sum on death within a specified term. It works the same way as a normal term policy but the premiums are paid by the employer. This means that the individual does not have to pay the regular premiums out of their net salary, after income tax and national insurance has been deducted.

The key benefits of a RLP are:

  • Although the company pays the regular premiums they are not treated as a benefit in kind on the employee and therefore not subject to income tax.
  • Premiums are treated as an allowable business expense for the employer when calculating their Corporation Tax liability.
  • Provided the policy is placed under trust any lump sum paid does not form part of the estate for Inheritance Tax purposes.

An RLP can be used by any company that wants to provide cover for their employees but the company is of a size where setting up a group life assurance scheme is not possible. They can also be used by individuals who are members of a group life assurance arrangement but want to increase the amount of cover they have in a stand-alone policy.

Another feature of an RLP is that the lump sum on death does not count towards the pension's lifetime allowance of £1.5 million (2013/14). This compares to a group life assurance scheme that pays benefits under pension legislation and therefore the lump sum paid does count towards the lifetime allowance. If this lump sum together with any pension lump sums exceeds £1.5 million, the excess is taxed at 55%.

You should note that in order to meet the RLP rules the plan must only provide a lump sum on death within a specified term, ending before an individual's 75th birthday. The lump sum has to be paid to financial dependants or family members.

This can be a very valuable benefit and straightforward to set up. Please contact your usual Adviser to discuss this further.

Gareth Says... 
Invesco Perpetual update

There has been a lot of coverage in the financial press about the departure of Neil Woodford from the investment firm Invesco Perpetual. After a tenure of over 25 years managing funds in excess of £25bn this is a big announcement. We have had a number of enquiries about our view on this matter so Gareth outlines his thoughts here...     
"The time has come for Neil Woodford, the fund manager of the Invesco Perpetual Income and High Income funds, to move on. He will be leaving at the end of April next year. How this will affect his funds is unknown but Invesco Perpetual have been preparing for this for a number of years. We will continue to monitor, there will undoubtedly be an outflow of funds and we will see what Woodford's new company looks like and advise accordingly."

Staff Matters - valuations with added value!
For many years M&T have issued clients with comprehensive valuation statements every four months, the most recent of which were issued last week. With this in mind it is worth highlighting the process involved and those at M&T that play an important part in executing it efficiently. Along with the need to ensure printing is accurate and packaging is organised there is the time taken in making sure every policy is showing the correct holdings and value prior to being sent out.

The process is ongoing but one month before valuation date Lisa starts the updating process with more than 1,000 checks before the valuations are ready.

We treat this as a valuable communication to our clients and so giving thanks to Lisa, Charlotte and Bev goes without saying each and every time we get to that particular time of the year, however there is no harm putting it in print so you can all appreciate the roles that are performed at M&T.

The valuations for 2014 will be issued on Fridays: 28th February, 27th June and 31st October.

If you would like to receive your valuation in the future by email then please send an email to and we will ensure it is sent to you this way.


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