Our bottom line
If sustainable investing is important to you, then Shepherds Friendly might make a good investment platform. They have put together a portfolio tilted towards companies with high environmental, social and governance (ESG) standards.
Additionally, if you want to save for your child’s future, Shepherds Friendly have also put together Junior ISA, Sustainable Junior ISA and other Tax-Exempt plans. You can surprise your child with a tax-free gift once they are 18 years old.
Based on Shepherds Friendly’s investment strategy and comments on the Trustpilot website, holding your investment to maturity may be best.
It is not uncommon to have emergencies that may require you to close, transfer or withdraw funds from your ISA early. Unfortunately, if this happens during a period of poor investment performance, you may get back less than the current value of your plan. This mainly happens to safeguard other investors. It appears that if you want to get a good return, you might want to either take out your investment during a period of strong investment performance or at investment maturity.
What kind of solution is Shepherds Friendly?
Shepherds Friendly lets you save in a diversified portfolio of both adult and junior ISAs and investments. You can choose Stocks & Shares and Junior ISAs or Sustainable Stocks & Shares and Junior ISAs. You may also come across other Tax-Exempt Savings plans – for example, Bonus Plan, 5 Year Fixed Rate Bond, Young Saver Plan and Junior Money Maker.
Of course, the portfolio you choose depends on your circumstance, but if you’re unsure, it’s always best to seek independent financial advice.
Once you choose a particular portfolio, you have two options: open an account online or transfer an existing one where applicable. These processes are easy and straightforward. However, you may be prompted to read a detailed guide first before filling out an online form or making any payments.
The guides answer all the questions you might have, clearly portray the returns you can expect from your investment in different scenarios, highlight the costs you might incur and outline the terms and conditions.
Shepherds Friendly’s top features
First, Shepherds Friendly uses a cautious investment strategy to minimise risk. Unlike some Stocks & Shares ISAs that are invested directly in shares or a share-tracking index, the money you invest with Shepherd’s Friendly will not normally fluctuate from day to day. All investments made by different investors are pooled into a fund termed the With-Profits Fund. Investment managers invest the money in a mix of assets for the medium to long term. These assets may include property, government and company bonds, UK and overseas stocks and shares and gilts.
Sustainable Investments are managed by Royal London Asset management through their Sustainable Diversified Trust fund.
Secondly, depending on the performance of your investment, and to increase your payout, Shepherds Friendly offers annual and final bonuses. They aren’t a guarantee though; some years you might receive the yearly bonus, but others you might not. The final bonus is paid out when your investment matures, and just like the annual bonus, it isn’t a guarantee.
Thirdly, Market Value Reduction (MVR) is applied to protect all the members who have invested money with Shepherds Friendly. If you plan to take out your investment when the market is doing poorly, MVR ensures you don’t leave the With-Profits Fund with more than your fair share. There is a chance that you may get back less than the current value of your plan.
Lastly, you will be happy to know that you are covered for 100% of loss through the FSCS should Shepherds Friendly default on payment. Additionally, if you unfortunately die, Shepherds Friendly will pay a sum equal to 101% of your initial investment plus bonuses to your estate.
How do the fees work?
The fees depend on the investment portfolio you have chosen.
If you choose the Stocks & Shares ISA, you can expect a 1.5% annual investment management charge. Additionally, Shepherds Friendly’s will collect a 3% initial plan charge. These are deducted before bonuses are declared.
If you choose the Junior ISA, you can expect a 1.5% annual investment management charge before bonuses are declared.
Shepherds Friendly’s platform
Setting up an account is clear and straightforward. The fact that you are prompted to first read through guides is reassuring. It helps you know what you are getting into before investing.
Registering for your account online allows you to view your plan details, add funds and update your direct debit securely. You will also receive a bonus statement indicating the amount and value of any bonus payments, withdrawals, and your ISA’s total cost.
What are the risks?
As with all other investment products, there are no guarantees for positive returns. There’s a risk that you could end up with less than you invested while still having to pay a fee. That said, Shepherds Friendly highlights the following risks:
- Past performance cannot be taken as a guarantee of future returns.
- Bonus rates vary from year to year depending on the performance of our investments, and in some years, we may not pay out any at all.
- HM Revenue and Customs may change the tax status of a Stocks and Shares ISA in the future.
- Inflation and making regular withdrawals may affect the purchasing value of your investment in the future.
- If you have been invested through periods of poor investment performance, and you leave the fund, you may get back less than the current value of your plan. This is known as Market Value Reduction (MVR).
How accessible is Shepherds Friendly?
Creating an account on Shepherds Friendly is relatively easy and straightforward. It takes minutes to fill out a quick online form and make a single deposit or monthly Direct Debit payments.
You can then sit back and wait for the investment managers to do the hard work of aiming to grow your savings. If the need arises, you have the option to control your plan online to pause, top-up or change your premiums and track your savings.
Service and support
You can contact Shepherds Friendly via phone call for free on the number 0800 526 249. Also, reach them by email at the address [email protected] or [email protected] or write to them at Shepherds Friendly, Haw Bank House, High Street, Cheadle, Cheshire, SK8 1AL.
Is Shepherds Friendly right for you?
It’s important to read through the documentation of each investment portfolio to see what plan works for your circumstance. Remember, please seek independent financial advice first if you’re ever unsure about the suitability of an investment for your circumstances.
If you find an investment portfolio that might work for your circumstance, ensure you are ready to commit until the investment term matures. Though early withdrawals do not carry penalties, they negatively impact your investment, where you may get back less than the current value of your plan.