THIS TRANSCRIPT IS ISSUED ON THE UNDERSTANDING THAT IT IS TAKEN FROM A LIVE PROGRAMME AS IT WAS BROADCAST. THE NATURE OF LIVE BROADCASTING MEANS THAT NEITHER THE BBC NOR THE PARTICIPANTS IN THE PROGRAMME CAN GUARANTEE THE ACCURACY OF THE INFORMATION HERE. MONEY BOX LIVE Presenter: PAUL LEWIS TRANSMISSION: 10th JULY 2006 3.00-3.30pm RADIO 4 LEWIS: Well hello. Money is a lazy creature, much happier slobbing around in some old bank account than working for its living, so today Money Box Live takes your questions on putting your money to work and keeping an eye on it. Standard Life shares made their debut on the stock market this morning. Should you hang on if you were given free ones or sell them? And, if so, when? And with the stock market around its highest level for about 2 months, has it now settled down or is it in further decline in future? Commodities – that’s things like metal and oil – have been doing well. Should we be putting money into them? And, if so, how do we do it? Or perhaps you’re concerned with the ethics of investing. Is your money being used for good or evil or don’t you care? Then there’s cash, property, ISAs and so on. Well whatever your question, you can call Money Box Live now – 08700 100 444. And with me today to answer your questions about saving and investing are three top people from financial management and advice companies: Amanda Davidson is a Director of Baigrie Davies, who is also on the disciplinary committee of the Financial Services Authority; Justin Urquhart Stewart is Director of Seven Investment Management, a pioneer of asset allocation, which is a posh phrase for not keeping all your eggs in one basket; and in Manchester Brigid Benson is Director of Gaeia Partnership, an ethical investment specialist and winner of many ethical awards. And the first question is from Penny from Derbyshire. Penny, your question? PENNY: Oh hello. My grown up daughter and I are thinking that we might like to jointly do a little bit of share investment and, if you like, put so much in a month say and from time to time decide what shares to buy. I just wondered how we should best organise ourselves because we’ve looked at share clubs and they seem a bit sort of complicated and geared to a larger number of people. I mean are there any sort of particular pitfalls we ought to think about? LEWIS: Okay. Justin, a two-person, mum and daughter share club - is that a possibility? URQUHART STEWART: Well yes, you can have a share club for two, but, you’re quite right, the average membership of a share club is about 10 to 15 people. It’s normally a group of friends. Well they start off as friends anyway. LEWIS: (LAUGHS) They normally start off down the pub from what I’ve seen. URQUHART STEWART: Well, yes, quite a lot of that. But yes there are various pitfalls with it. An investment club is very straightforward in terms of you can get hold of ProShare online, which is the organisation which is the guardian of investment clubs, and they can give you a constitution and a structure to operate with. But if you actually want to operate as a couple doing this, then really the structure you want to try and adopt with an investment club, bearing in mind of course that obviously shares are incredibly volatile and a high risk area to invest in, then you put money aside if you want to actually play the stock market and this is money effectively you can afford to lose. If you can’t afford to lose it, then playing the stock market is lethal. After that, you then need to try and find a good broker you can trade with and that’s merely a matter of shopping around - a good online one where you can actually see all the charges transparently. But the most important way if you want to play the stock market is you do not play the entire market. You focus on a few stocks – no more, in my view, than ten, preferably six – and they can be something simple such as a tracker, like an exchange traded fund which is easily tradable, through to a few very liquid larger stocks which you can trade any time. Unfortunately a lot of people like to focus on smaller companies, which can be very exciting, but unfortunately when you want to buy them they can seem like good value and when you want to sell them nobody wants to buy them off you. LEWIS: And Amanda Davidson, who owns the money in these shares? Is it both of them together? Do you have to set up a kind of holding company to do this? DAVIDSON: Well I would suggest that they should look at funds rather than individual shares. I know perhaps there’s the thrill of actually purchasing an individual share, but particularly if they’re sort of saving a small amount of money and particularly perhaps if they have not got much experience in the stock market, they could buy unit trusts which would be a collection of shares. They could buy those perhaps jointly on a monthly basis or they could put them in an ISA individually, which would be very tax efficient. LEWIS: Is that the sort of thing you meant, Penny, or did you really want the interest of buying individual shares in companies and just trying it out, seeing what it was like? PENNY: I mean we’ve already obviously got things like pensions and sensible savings. We just thought we’d look at doing something which was a bit of a flutter. LEWIS: Yes. And this is money, as Justin said, you can afford to lose? PENNY: Yes. LEWIS: How much were you thinking of a month? PENNY: Oh, I don’t know. It might be £50 to £100 a month each maybe - something like that, you know. URQUHART STEWART: Well a key issue with that is in my view you should never buy any shares in a block of say less than £500 to £700 because otherwise the commission on the spread will actually eat it all up. Indeed I’ve come across some astonishing portfolios with very smallholdings indeed and you’ll never make any money at all. LEWIS: And the spread is the difference between the buying and the selling price? URQUHART STEWART: Absolutely. LEWIS: And Brigid Benson, I know you specialise in ethical investments. Is this something - kind of joining together to look for ethical investments - that you’d recommend? BENSON: Well I mean I agree with Amanda’s comments that for those who are investing a modest amount monthly, then unit trusts or OEICs will be much cheaper, and obviously there are you know some interesting ethical funds that could also be looked at at the same time. I would be, like Justin, very wary about those investing that amount of money going in for direct shares because I think they could be very disappointed. LEWIS: Okay. I suppose that’s the advantage, Justin, of having 8 or 10 of you – that you can actually find that £700 – whereas if there’s two of you, it’s much more difficult to do that. URQUHART STEWART: Yes. LEWIS: And can I ask you one specific question. You mentioned find a good online stockbroker. Now many people’s eyes will glaze over at that point – how on earth do I do that, what does he mean? How much is it going to cost you to buy and sell shares per trade because people think of stockbrokers as folk for the very rich really? URQUHART STEWART: You’ve now got a lot more choice than you had before and you can get share dealing commissions down to about £10 a transaction, undoubtedly online ones. And they vary, they all have various offers and things, but you need to go through a little checklist to establish that a) they belong to a sensible organisation themselves, they’re properly regulated; b) there aren’t any other hidden charges - nominee charges, custody charges and things like that; and c) that when you are actually trading, you’re trading at the price you want to and not a price that they may decide to do a little bit later. The way to try and test that is actually to find people already using them, and for that you can actually go onto some of the websites for share dealing operations and they can give you some interesting ideas as to who’s better value and who’s not. LEWIS: Yes. And you mentioned an organisation that helps people do these sort of share clubs. URQUHART STEWART: Yes ProShare. LEWIS: ProShare. So if you look up ProShare on the Internet, then you’ll be able to get some tips from them anyway. URQUART STEWART: Absolutely on how to go about setting up, even if it’s not a club. LEWIS: Okay. Well thanks very much for your call, Penny. Some interesting questions raised there. Let’s move onto Steve now who’s calling us from Worcestershire, Malvern in Worcestershire. Steve? STEVE: Yes, hi, good afternoon. I’m a retired technologist, most of my life in research and development, so I’m used to looking into things and to some degree becoming expert I suppose. My question’s in two parts. Is that something that can be useful for me in investing in stocks and shares? And the second question is in the nature of the stocks and shares, I’m quite interested in alternative technologies. LEWIS: Brigid Benson, alternative technology investments? BENSON: Yes, this is an area that more and more people are interested in and one has to be careful about not investing too much in funds that would be considered high risk and also there isn’t always a huge choice of different investments open at one time. There have been some you know very well supported wind energy VCTs and investment trusts, but I think they’re all closed at the moment. One that is open is the Impacts Environmental Investment Trust, now available also as a unit trust, which invests in very innovative technologies and it’s run by I think a biochemist and you know guys who’ve now got a considerable investment experience but with also experience of the sector, and that would be well worth looking at as part of a broader portfolio. And then you’ve got one of my old favourites, Triodos Bank, which is a very low risk way to invest in the most innovative technologies that are going to impact on our environment positively. LEWIS: Amanda Davidson? DAVIDSON: Yes, I’d just like to echo what Brigid was saying in terms of the risk. These are much higher risk investments than what you would consider for a core portfolio - so albeit that you might be prepared to take a risk, do limit your investment in these particular individual investments to make sure it isn’t money that you really need for something like a rainy day tomorrow. LEWIS: Justin? URQUHART STEWART: I suppose just slightly going back to the point of Steve’s specialist knowledge. It is hugely useful if you’ve got knowledge in a particular area. Do apply it. Now obviously you’ve got these funds to choose from. If you wish to take out a much higher risk alternative, it would be to buy individual shares in these areas you happen to know about. These will tend to be at the smaller end of the market, so therefore the AIM and OFFEX or Markets Plus, as it’s known now, where you can find companies who may have particular areas of technical expertise which your knowledge will actually fit quite nicely. But that takes research. I’m afraid that’s the key thing you always have to have in the stock market. LEWIS: Okay, well thanks very much for your call, Steve. And from the sort of alternative to I suppose the fairly general investment in the stock market, Standard Life which came to the stock market this morning. We’ve had a number of e-mails about this and Neil asks us, ‘I’ve been allocated shares due to Standard Life demutualising. What’s the best option – cash them in or wait to see how Standard Life performs?’ Justin? URQUHART STEWART: Well I mean actually if you’ve already got the shares, you’ve got them at a discount already because the price was discounted before the flotation. If you hold onto those you may well get a loyalty bonus in a year’s time. But also the share price is being supported at the moment because Standard Life will go into the FTSE 100 quite soon and it’ll probably be the 60th largest company, which means that all those FTSE 100 trackers have to buy part of it. LEWIS: So these are the funds that follow the 100 biggest companies on the London Stock Exchange? URQUHART STEWART: Absolutely. So they’re all obliged to go in and buy Standard Life and so that’ll give it some support. Looking further out, it’s interesting to see what’s happening with the sector. The life and pensions sector at the moment is involved in an awful lot of consolidation and you’re seeing lots of takeovers going on. Now whether this involves Standard Life directly or not, who knows, but it’s jolly good for supporting the share price. LEWIS: Yes, the share price currently 242¼, so you got them for 230. But of course you can’t sell them yet, Amanda, because you haven’t had the shares yet, have you? DAVIDSON: That’s right, and you should hang onto them for at least a 12 month period to get the extra 5%. But I think Standard Life’s a very interesting business and they’ve turned themselves round from being a very traditional life assurance office to looking at much more innovative parts of developing the business such as Self Invested Personal Pension plans. And these are wrapped, which are all encompassing of assets. And I think they’re very well positioned for the future. LEWIS: Okay. Let’s move onto Gordon now who’s calling us from Norfolk. Gordon, your question? GORDON: Hi. I’ve just sold a property and on 20th of this month I will have £300,000 to place somewhere that will keep pace with property price increases to use at a later stage, within 6 to 12 months maybe, to purchase another property. Can you tell me where I might put it, please? LEWIS: Right. Well thanks for that call, Gordon, because I have to say we have had dozens of e-mails from people with sums ranging from £50,000 to nearly £1 million in a very, very similar situation. Amanda Davidson, where do you put money for this relatively short period of time? DAVIDSON: That’s the key. It’s a short period of time, so really Gordon you don’t want to take any risk on this money. I would not put it into the stock market, which would be a solution for larger sums of money over a longer period of time. But you’ve got to keep it in something like cash and if you keep it on a deposit account you are going to start to pay some tax on that admittedly. You could put £30,000 in premium bonds – any wins there would be tax free – but other than that, look at the best accounts that you can and move the money around. You’ll find that some have some bonuses for a period of time. When those expire, make sure that you look at other alternatives and move the money around so you get the best possible interest rate. But don’t take a risk on it. LEWIS: No. I mean you’re talking I suppose with some of these 6 month or 12 bonuses on savings accounts what 5, 5 and a bit percent maybe at the most really. DAVIDSON: That’s the sort of gross rate of interest. And, funnily enough, whether you tie it up or whether you actually keep it in an account which isn’t tied up can make very little difference on the interest rate. LEWIS: Yes. And some of them have upper limits too, which you have to watch with amounts over … certainly over a few tens of thousands of pounds. Justin, any thoughts? URQUHART STEWART: I think that covers it. The main thing is though you wouldn’t go anywhere near a stock market for frankly less than 4 or 5 years, so keep well out from that. And also please steer clear of any schemes which are purporting to be able to offer you 10% within a short period of time. They’re normally too good to be true. LEWIS: (Laughs) Indeed, even when they’re issued by some of our well known high street banks. URQUHART STEWART: Yes. LEWIS: Brigid, any ethical thoughts on this? BENSON: Well I mean I back the comments made by Amanda and Justin. I mean again Triodus Bank, Ecology Building Society, if you talk to them, can sometimes offer you a slightly higher rate than their published rates for the larger sums as long as they have sufficient notice about when you wish to withdraw it. And then of course there’s the Co-Operative Bank, which also usually offers quite competitive rates of interest. LEWIS: Yes, particularly on Smile, its online account. They’re not too bad, are they? Though you can do better elsewhere, but you do have that nice feeling that the money’s only going to be used for what the Co-Op anyway decides is good purposes. BENSON: Yes and they listen to their investors as well. LEWIS: Okay, thanks very much for your call, Gordon. I mean among the many e-mails we’ve had on this, we have had people wanting a little bit longer term for whom the stock market may be appropriate. Let me just read you one of them from Leslie from Enfield who says, ‘I have about £200,000 which I wish to invest to provide me with an income to live on in retirement’. Leslie also has a teacher’s pension of about £4,000 a year and the state pension, which is probably going to be much the same, isn’t it? ‘People say buy an annuity. I’m reluctant. What other ways are there to get an income in the long-term from £200,000?’ Amanda? DAVIDSON: There’s a variety of things that you can invest in and I again would have a balanced portfolio here with some investments being lower risk and some perhaps medium risk. I suspect if you’re wanting to draw an income, you don’t want to take a huge risk on investment, so perhaps some of the more esoteric areas - Far Eastern and emerging markets may not be appropriate. But you can build up a good portfolio and draw an income from it, maybe with an investment bond structure if you like that type of arrangement. But look at diversifying the investments and look for the long-term because if you’re retired you’ve probably still got a long period of time that you need to draw that income from the investment. LEWIS: Yes, I mean a woman of 60 probably has 20 … DAVIDSON: Easily 20 … LEWIS: … on average 20 years and probably longer. DAVIDSON: … 30 years, yes. LEWIS: Justin, you’re a great fan of asset allocation. I think more and more people are coming to that view in the financial advice world. Where can you go to get advice on making sure that money is spread – some in shares, some in shares in more exotic parts of the world, some in commodities I mentioned earlier like metals and oil? Where can you get advice on that? URQUHART STEWART: Well a good quality financial planner, financial adviser will certainly know the basics of these sorts of things. Then beyond that you’ll be going to specialist investment managers who often they work through and so you’ll have people there who will specialise in a broad asset allocation according to the risk profile that the individual actually has – how defensive they are, how aggressive, how much risk they want to take and how much capital gain or income. LEWIS: But if you’re planning your retirement and you’ve got £200,000 and that’s it and you’ve stopped work, you don’t want to be risky with it, do you? URQUHART STEWART: No. LEWIS: You want an income from it. You don’t want to gamble with it. URQUHART STEWART: Absolutely. And you can build, as Amanda was saying, a range of funds in a portfolio which can actually provide you then with a pretty reasonable level of income. Now unfortunately I find a lot of it is quite restrictive in the UK. Often we have to find ourselves going overseas because particularly in the fixed interest market because the costs or rather the actual margins they work on are so thin, you often have to go elsewhere round the world. But of course that’s when you have to be careful because of currency exposure as well. LEWIS: Yes. We’ll come onto another parts of the world in a moment, I think, with another caller. But Brigid Benson, £200,000. Let’s say Leslie does want to look at ethical investments, what would you be recommending? BENSON: Well although it’s a smaller realm to choose from, we’ve got many clients in retirement and their income needs are all being met. You can create a very satisfactory balanced portfolio using a combination of growth funds, corporate bonds and also some of the property funds although they’re not ethically screened as such. One or two companies such as Norwich Union and Friends Provident have actually got a sort of environmental sort of quality badge if you like attached to them, so that they are increasingly monitoring the environmental aspects of their property portfolio. LEWIS: Do you have to accept that with an ethical fund you will earn less? Is there a price to pay for your beliefs? Amanda’s shaking her head. DAVIDSON: No. I’m shaking my head here Brigid because I mean I specialise in ethical investments as well and there are so many studies out there that show that you don’t have to sacrifice performance. I don’t know why this myth persists. It’s a little bit irritating because none of the studies back that up. LEWIS: I suppose it’s partly because if you look at tobacco shares and so on, they’ve done very, very well, haven’t they, and most people would exclude those from an ethical portfolio. DAVIDSON: Well they will, but you can still get good opportunities. The key is picking the right fund manager. LEWIS: Brigid? BENSON: Absolutely. But it’s also about trying to assess the client’s real attitude to risk, their overall situation, so that they’ve got an appropriate portfolio, and that’s the same whether it’s an ethical investor or you know the more conventional investor. LEWIS: So it’s finding a good financial advisor? BENSON: Absolutely. And I do think that as soon as you’re talking about the larger sums, it is important to have active management, a portfolio that is reviewed you know several times a year and where there is the scope to actually make changes to meet you know your changing circumstances. LEWIS: Yes. I must say I’ve been surprised at the number of people with large sums, you know certainly 6 figure sums – what I would call large anyway – who really could afford and should afford a financial adviser and to find the right one. DAVIDSON: I think that’s absolutely essential. If you’ve got a large sum of money, you must find the right sort of adviser. That’s your first stop. And you want an adviser that’s not only going to set up the investments properly for you either through a discretionary fund management if they’re doing investments directly, but also is going to look after that on an ongoing basis because things come out of date very quickly. LEWIS: Don’t they just. URQUHART STEWART: And so you can see also what’s going on. After all it’s your money. These days you should have transparency. You can go and see online regular reports so you can see how it’s progressing and whether what was originally set up for you is still appropriate now. LEWIS: Yes. And, as you mentioned earlier, check those charges. The old definition of a stockbroker is someone who invests your money till it’s all gone, isn’t it? URQUHART STEWART: Absolutely. LEWIS: Those days I’m sure are passed but you have to be careful with things like that. URQUHART STEWART: I wouldn’t believe it. LEWIS: (Laughs) Thanks very much for your e- mail Leslie. And let’s move onto Chris now who has got a question about investing in other parts of the world. Chris, your question? CHRIS: Yes, good afternoon to you from glorious Devon. I live in the village of Babacombe and Babacombe St Mary Church is one of those places in South Devon where time stands still and I feel that this is what’s happening to my investments. LEWIS: Oh right, I wondered when we were coming to your investments, Chris. Tell us what you want to ask us. CHRIS: Well currently we have money tied up in premium bonds – about £50.000. Everybody else seems to win except me and I’d like to transfer this £50,000 into something long-term but safe but with a high rate of interest. LEWIS: Oh goodness, this is the Holy Grail. I don’t know if that’s buried in Babacombe. CHRIS: Well I think I know where the answer is. LEWIS: Go on then. CHRIS: Last week on Radio 4 I overheard a documentary on South Africa and in passing they mentioned their interest rates there had been over 11% for some years. Now couldn’t I transfer my £50,000 to some financial institution in South Africa? LEWIS: I’m sure you could, but it would then probably have to be in South African rand, which then you’d be subject to the risk of that. But, Justin, are there opportunities like this? I mean what do you think of this? URQUHART STEWART: Oh why South Africa? You could be getting 13% in Iceland – even better. There’s only one slight drawback: the value of the krone’s dropped by 30% since the beginning of January, so there’s normally a reason why you’re getting a high return in these areas. The emerging markets, which cover all these areas such as obviously South Africa and Iceland and all the areas of the Far East, are very exciting areas and can provide dynamic returns. However those returns will not be given to you in a straight line, they will be highly erratic, and although the past 3 years (up until 2 months ago) in the emerging markets overall you got 170% return, some of those were superb, ones like China were close to 0%. And since then I’m afraid you’ve seen a really very significant fallback in a lot of emerging markets and these emerging markets will be great in due course. However some of them you could invest in and then suddenly find you can’t get your money out of. LEWIS: Yes, so there is a very high risk. And, Amanda, just talk to us a bit about the currency risk, which I know concerns you in these things. DAVIDSON: It would. I mean it’s very easy to look at a headline rate and think ooh I’ll have some of that, but the problem is when you convert the currency both from sterling to another currency and then more critically back again, if you’ve got a discrepancy in the way that the movement between those two currencies happens then you can end up getting perhaps less back than you’ve actually put in to start off with and that’s … Well you can get 11% or much less, then you’ve still got overall much less than you started with. LEWIS: Brigid, is this just the old if you take a risk you might get more but then you might lose everything, or is there something a bit more worrying about investing in an emerging market like South Africa? BENSON: Well obviously South Africa has made you know great progress in the last few years, but there’s a long way to go and high inflation and people I think are still leaving. There is a high crime rate in certain areas. You don’t get a high interest rate for nothing as well as the currency risk. I don’t know what Justin thinks about sort of international currency funds. There are one or two sort of international managed currency funds where currency experts are trying to get a little bit more than you might get in the UK by taking you know a managed look at a basket of currencies. LEWIS: Okay and Justin just explain to us first what a managed currency fund is and then if it’s a good idea. URQUHART STEWART: There are lots of currencies around the world, so imagine you’re employing somebody who just merely trades those currencies with a view of actually making money out of it, so currencies have in effect become an asset class in their own right. LEWIS: So as we hear the dollar’s risen or the dollar’s fallen, people are trying to buy it when it’s low and sell it when it’s high and makes you money? URQUHART STEWART: Absolutely. Now this can be obviously quite risky, but obviously you can also put in hedges and protections in it as well. So for the innocent investor going into it, it is very dangerous. For the professional actually going in there operating a fund which us then individuals can buy can be very useful indeed. So Goldman Sachs, for example, have a very good currency fund and they’ve got a good track record on it and I regard currencies as just as much as an asset class as I would say property or equities. LEWIS: Okay. Well thanks very much for that call, Chris. And we’re going to go to Margaret now in Dorset. Margaret, your question? MARGARET: Hello. I’m not talking large sums of money, but for the last 10 years I’ve been investing in a policy that matures this year and I’ve been putting £20 a month in for 10 years - £2,400. What they tell me I’m going to get is £2,100 and so I’ve been stung by the … presumably by the stock market. LEWIS: Right. May I ask who this is with? MARGARET: It started off with Colonial Mutual and then they were taken over by Winterthur. I don’t think they can do anything about it. I’d like to think they might. LEWIS: Let me ask the panel. Amanda Davidson? DAVIDSON: Well I think that’s probably right I mean if that’s what the policy’s going to mature at. Do you know if it’s in an investment fund or is it in with-profits? MARGARET: It’s with-profits. I think it’s been put in unit trust. DAVIDSON: Yes, okay, because the returns on some of these with-profits funds have been quite disappointing and the problem is that you’ve been locked into this for a 10-year period, so then actually the maturity value is less than what you’ve put in. I think that anyone who’s got a savings plan in a with-profits fund needs to look carefully at these because the nature of the underlying investments has changed quite a lot and they’ve become a lot more cautious, therefore not benefiting from the upturns in the stock market recently. But also they’re not very transparent in terms of what you’ve actually got, so it can be very difficult because you’ve got bonus rates that are being added almost in a haphazard way over which you’ve got no control. LEWIS: So does Margaret just have to keep this till it matures and then take whatever she gets and think that’s just one of the risks you take investing? DAVIDSON: Well I’m afraid that’s right. I think probably the only positive is that at least the money’s going to be tax free. LEWIS: Okay. Well I’m sorry about that, Margaret. That’s one of the things that does happen sometimes. Let’s move onto Edna now who’s calling us from Epping. Edna, your question? EDNA: Hello. My grandson became 21 in June. He’s graduating this weekend. I took out some children’s bonus bonds, which have also just matured, so he’s got just under £4,000. He doesn’t know where to put it. LEWIS: Right, Justin? URQUHART STEWART: Well it depends I suppose whether he’s going to need this in the short-term, but hopefully (thinking of myself at that age) it’s probably a very good idea if he’s left nowhere near it. EDNA: Well I think he wants to put it into something and he asked me if he should put into bonds and I’ve got a big question mark against bonds. URQUHART STEWART: Well a wise fellow that he actually wants to invest it and not actually just have it anywhere near him, unlike my behaviour when I was his age. But I would suggest that actually what he can do is he can afford actually to invest for the medium term to longer term in something which is going to give him a broad range of asset classes, which would include bonds. The trouble is the term bonds includes all sorts of different things by which I mean sort of corporate debt and government debt, known as gilts in this country. But a combination of equities around the world, a combination of bonds, other asset classes like commodities, property, private equity, real estate even of that sum can be put together with a relatively simple multi-manager mechanism, which if you go to a financial adviser will be able to direct you to ones which are most cost effective and actually have the right sort of risk profile that he would be looking for. LEWIS: And even with £4,000 a financial adviser would not show you the door? They’d be interested in your business? URQUHART STEWART: It’s a perfectly reasonable business to be able to offer. LEWIS: Okay. Let’s just squeeze Shirley in – our last caller, I think. Shirley, what’s your question? SHIRLEY: Oh yes. Well it concerns ISAs and the return from them. I’ve always understood that if you put equities into an ISA, they do take 10% off in tax and that is not returnable; whereas bonds, you get the entire return without any deduction. LEWIS: You get the full tax relief. You do indeed. I’m going to cut you off there, Shirley. Forgive me, but we’ve got about 20 seconds to get the answer from Amanda Davidson. DAVIDSON: The answer is that’s only on the income, not on the capital growth. Equities, you’d expect capital growth certainly to make up for that 10%. LEWIS: By equities, we mean shares of course? DAVIDSON: Shares. We do indeed. LEWIS: So there is an advantage because the capital growth is tax free, but of course you are paying a tax on the return from the income. DAVIDSON: That’s right, but it’s small. LEWIS: Okay. Thank you very much for your call, Shirley. I’m afraid we’re going to have to stop there because that’s all we have time for. My thanks to Amanda Davidson from Baigrie Davies; Justin Urquhart Stewart of Seven Investment Management; and Brigid Benson of Gaeia Partnership. Thanks to you for all your calls. We had a slight problem with our phone system, so apologies if you were struggling to get through. We’ve had loads of e-mails that we haven’t answered. Apologies for that. But there is plenty more on our website about saving and investments, bbc.co.uk/moneybox, where you can listen to the programme again and read a transcript in a couple of days. I’m back at noon on Saturday with Money Box and Vincent Duggleby’s here to take more of your calls on Money Box Live next Monday afternoon. 21