64
It is interesting to gauge where some of the top product providers stand with the
adviser community. Based on the survey Octopus was by far the most popular with
advisers. Close Brothers, one of the oldest BPR product providers was also popular.
Most providers capture some share of the adviser market, which is a positive
indication of a healthy and competitive marketplace.
Some providers previously established in other tax efficient product types are now
making a move into the BPR market and are seeking to rapidly grow their market share.
Q
.
Which BPR product providers do you typically use?
The most common reason for
recommending a BPR product was the
speed of the IHT mitigation. The simple
legal structure also scored highly and
is perhaps linked to speed of relief -
clients in a hurry to achieve exemption
probably do not want to go through a
complex investment process or medical
underwriting.
Access was the second most common
reason for a recommendation and this
one is perhaps linked to the potential for
future growth, which was the fourth most
common reason. We can speculate that
this is being driven by slightly younger
clients who still want some growth, who
may still require access to those funds
for future spending needs, but who also
want to feel that they have taken some
steps to mitigate IHT. This triumvirate of
needs is perhaps a relatively new financial
planning problem that is unique to the
baby-boomer generation.
100
93
60
30
16
14
Speed of IHT
mitigation compared
to other solutions
Client retains
access to funds
Simple legal structure
compared to other
IHT solutions
Potential for
growth as well
as IHT mitigation
Contributions to
pensions and ISAs are
already maxed out
Corporate clients
require a BPR solution
to pass on the value of
their business
Q
.
What are your
top 3 reasons
for recommending BPR products?
“The most common reason for recommending a BPR product was the speed of the IHT mitigation”
Q
.
Do you consider diversification across
BPR product providers and underlying
assets important?
It seems that advisers diversify across
both providers and underlying assets.
What is not immediately obvious is
whether providers are investing in the
same, or similar, assets and therefore
how much genuine diversification is
achieved. This is a question advisers
have to examine through their own due
diligence and research. The 6% that
believe diversification is unimportant
is interesting - with a BPR product,
the primary objectives are capital
preservation and IHT relief, so perhaps
they feel the products are low in risk
and that diversifying doesn’t need to be
a big concern for them.
Underlying
Assets
Product
Providers
Neither
7
%
2
%
6
%
86
%
Both
83%
28%
11%
40%
1%
39%
32%
56%
68%
36%
5%
17%
21%
Other
