Octopus develops first platform-bought VCT

Octopus develops first platform-bought VCT

Octopus Investments has developed with Transact the first venture capital trust to be bought and help on a platform.

The launch of the service from Transact follows a change announced in the Finance Bill 2014 last year that allows shares in VCTs to be bought by a nominee and qualify for the tax reliefs.

Previously VCTs were unable to be purchased on adviser platforms or by a nominee account, as they needed to be bought by the individual directly in order to qualify for the tax reliefs.

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Mark Wignall, managing partner of VCT firm Mobeus Equity Partners, told FTAdviser that this will be an emerging trend, although he was not sure of the degree to which it will become more common and how long that might take.

“This is a first as far as I’m aware and I’m not surprised in the slightest for it to be an initiative that Octopus have taken, because it is completely consistent with their business model,” he added

Previously, the Association of Investment Companies’ director general Ian Sayers said the change would mean “applications for new VCT shares can be made through platforms which are increasingly popular for both advisers and investors”.

Nominee-ownership is a key requirement in enabling financial advisers to manage their clients’ investment on platforms. Prior to the change in rules, VCT shares could only be transferred to platforms once bought, creating complexity for investors and their advisers.

Shaun Sandiford, head of platform distribution at Octopus, called the development a significant step in helping to meet the needs of financial advisers.

“With more and more advisers managing their clients’ portfolios on platform, and with a growing year-round demand for VCTs, we knew it would make a big difference to our advisers if we could get our VCTs on platform.”

Jonathan Gunby, chief development officer of Transact, added: “This development further demonstrates our commitment to providing access to the widest range of assets.”

David Kaye, chief executive at Puma Investments, told FTAdviser that they have been engaging with platforms over the last few months and expect that their next VCT will be available this way.

“I certainly think that VCTs being available on platforms is an important step that will be of value to advisers and their clients.

“Every investor wants to have an holistic view of their assets and investments and as VCTs become an increasingly mainstream part of financial planning especially in light of the changes in the pensions landscape, we think that platforms will have a very important role to play.”

Ian Sayers, chief executive at the Association of Investment Companies, said: “It’s very encouraging to see that Octopus Investments’ VCT shares will be sold on Transact, the first time that VCTs have been available on an adviser platform.

“This simplifies the purchasing process for advisers whilst maintaining the tax advantages of VCTs for investors, and will hopefully set a precedent for further availability of VCT shares on adviser platforms.”