Our Services

 

Taxes & Fees

Costs within a portfolio can have a very influential impact on overall performance. Costs take two forms – the taxes investors pay on income and possibly capital gains, and the fees paid to providers of the investment services.

 

Being tax and fee-efficient within a portfolio then is essential.

 

Our investment offerings combine the use of PIEs (Portfolio Investment Entities) and AUTs (Australian Unit Trusts) depending upon the investment solution being adopted.  PIEs have the advantage that they are tax-paid entities with a maximum tax rate of 30%.  AUTs fully distribute their net income each year with no taxes deducted at source; an individual investor therefore can fully utilise their lower tax rates.

Taxes then are typically payable at an investor’s marginal tax rate ensuring that all marginal tax opportunities are utilised.

It ought to be noted further that our investment strategies all embody a ‘buy and hold’ philosophy so that our clients are typically regarded as ‘non-traders’ and therefore not in the business of investment.  In this way we can be confident that taxes ought not apply to the capital gains enjoyed by investment portfolios. 

 

Fees in portfolio management can be difficult to identify and we counsel investors to get a thorough handle of costs before they proceed. Costs can lie in underlying funds, in transactions, at the investment platform level, in advisers’ fees and in commissions (though some will argue the latter are not client costs, but provider costs).

 

At Rutherford Rede we are wholly transparent around costs. As portfolios grow beyond certain defined levels costs per $ fall. Larger portfolios enjoy substantially reduced fees. We know exactly what our clients pay for each component of the service and we have negotiated these to a low level by industry standards.

 

Our investment proposals will summarise costs in detail allowing prospective investors to relate fees to specific services provided.