VCTs make breakthrough onto adviser platforms
Adviser-led Transact has brought venture capital trusts onto its platform to help give more choice for financial advisers.
The new service comes several months after changes to VCTs announced in the Finance Bill 2014, which allows shares in VCTs to be bought by a nominee and thereby qualify for the tax relief.
Before the rule change, VCT shares could only be transferred to platforms once bought, creating complexity for investors and their financial advisers.
According to Jonathan Gunby, chief development officer for Transact, nominee ownership is a “key requirement to allow financial advisers to manage their clients’ investment on platforms”.
The development means that VCT providers can allow shares in its products to be bought and held on Transact.
Mr Gunby said: “This development demonstrates our commitment to providing access to the widest range of assets.”
Shaun Sandiford, head of platform distribution at Octopus, said: “This development is a significant and important step in helping to meet the needs of our financial advisers.
“The service from Transact makes it easier for advisers and their clients to access and manage the attractive investment opportunities offered through a VCT.”
| Key facts |
VCTs launched in 1995 Over the 2014/2015 tax year, investment into VCTs reached its highest levels for nine years, raising £429m. Octopus raised nearly £94m into its VCTs compared with £79m the previous year. Transact has more than £19bn in assets under direction and 115,000 client portfolios. |
The move was welcomed by Ian Sayers, chief executive of the Association of Investment Companies, who said: “It is encouraging to see that Octopus Investments’ VCT shares will be sold on Transact, as it is first time that VCTs have been available on an adviser platform.
“This simplifies the purchasing process for advisers while maintaining the tax advantages of VCTs for investors, and will hopefully set a precedent for further availability of VCT shares on adviser platforms.”
Adviser view
Mark Evans, director of St Helens-based Revolution Financial Services, said: “VCTs are not something that our clients would be interested in, but should we have clients for whom they would be suitable, putting these on a platform would be useful.
“We do not use Transact at the moment, but it is one that we are considering as part of our yearly due diligence process, and this development is the sort of thing that we would take into account.”
