InvestmentsJan 17 2017

Pension changes and tech driving clients on-platform

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Pension changes and tech driving clients on-platform

Pensions legislation, demographics and the need for technology-led solutions are driving the investment decisions made by advisers' clients, Charles Owen has said.

The founder of alternative investment fund marketplace CoInvestor, which was created in 2015 to 2016 and is being rolled out widely across the UK this year, said three major trends have been occurring, which have started to change the way in which clients want to make investment decisions.

He said: "I can see three long-term trends forging new habits in consumers' behaviour.

"These are the adoption of new technology, demographic changes with the Baby Boomer generation demanding different types of assets and the new pensions legislation, which has created a waterfall of funds seeking new asset types."

As more people have started to go online for easier access to their finances, and want to use alternative assets within their portfolios (especially with the limits impose on the lifetime allowance), Mr Owen said it was important to create an online investment system that enabled this, which could be used by advisers, clients and wealth managers.

Mr Owen said: "If people are going online to pick funds themselves, as we have seen happening, they are effectively going away from advice.

"But if you can use a system that brings them back into the sights of the adviser, this will be a much better solution."

We have noticed a growing challenge for wealth managers, as they want to provide alternative investment solutions for clients but advisers do not want to lose the client relationship.Charles Owen

CoInvestor, which is a tech-based solution, allows investors to bolster their portfolios with tax-efficient funds such as enterprise investment schemes (EIS), venture capital trusts (VCTs), private equity and other listed investments. 

To help make this more efficient, CoInvestor has launched EISWallet.com, an online repository where investors and their financial advisers can record and manage all of their EIS and unlisted investments.

The service, which is free to use and currently in beta (testing) phase, aims to take the hassle out of managing income tax relief as well as any capital gains implications from investing in EIS and other unlisted investments.

Removing the need to maintain extensive paper-based records, the EIS Wallet will allow investors to tore details of their investments and upload share and EIS certificates online throughout the year, allowing them to track the value of their tax savings in real time.

The simple interface allows users to easily enter information about their investments or products, link these directly to Companies House and add them to an overarching dashboard which tracks the valuation, tax relief amount and the key EIS benefit expiry dates, which will be useful to advisers, Mr Owen said.

He added: "We realised there was no standardised way for investors to record their unlisted product holdings, with paperwork in many cases still the main means of proof.

“Pairing this insight with the trend of growing demand from investors to access financial products, information and services online, we came up with the EIS Wallet – a digital solution aimed to make managing investments easier and take the pain out of completing tax returns.”

There are plans for later on in the year to embed the functionality within the CoInvestor platform. 

"We have noticed a growing challenge for wealth managers, as they want to provide alternative investment solutions for clients but advisers do not want to lose the client relationship, so for us, it is important that CoInvestor allows advisers to maintain that relationship."

Over the course of 2017, CoInvestor will be rolling out a white-labelled platform solution for advisory firms, set up within the adviser's own website and bearing the adviser's branding. 

This means the adviser can monitor any investments into EIS or VCTs that the client may decide to make, monitor the client's risk profile and, ultimately, keep the client relationship.

The software will enable investors and their advisers to capture all the underlying tax and suitability data, and once done, the financial planner will no longer have to fill in copious forms each time the investor wishes to make an investment.

simoney.kyriakou@ft.com