• Roundtable organised by Intelligent Partnership to help VCT managers become more ‘platform ready’
• Transact commits to adding more VCT providers on its platform
• Advisers urged to look beyond biggest marketing budgets to consider whole of market

Leading VCT investment managers today met at a roundtable organised by Intelligent Partnership (IP) and hosted by Transact to debate ways to get more VCTs on adviser platforms. Thought-leaders from Octopus Investments, Portunus Investment Solutions, Mobeus Equity Partners, Foresight Group, Livingbridge, Amati Global Investors, Albion Ventures and Triple Point discussed the barriers to getting their products listed.

Guy Tolhurst, Managing Director of Intelligent Partnership commented: “Part of our year-round programme of content on all aspects of alternative investment, this is the first in a series of roundtables to bring key stakeholders together to debate the innovations driving change and improvement in the sector.”

This roundtable to help providers become more ‘platform ready’ was chaired by Daniel Kiernan, Research Director of Intelligent Partnership – the UK’s only CPD accredited provider of research and education on alternative investments.

Daniel Kiernan commented: “It is estimated that platforms have over £350 billion in assets under administration and up to 80% of new retail investments are now made via an investment platform. Today almost all advisers use at least one platform, and in surveys both advisers and consumers cite the functionality, ease of use and ability to get a consolidated picture of their total portfolio as key benefits.

“However, to date it has not been practical to hold VCTs on platforms or possible to purchase VCT shares in the primary market – which is what most VCT investors want to do in order to obtain the upfront tax relief. This is a major headache for advisers, and resolving this issue would remove a significant source of friction in the investment process and pave the way for increased inflows.”

Changes announced in the 2014 Finance Bill allowed shares in VCTs to be bought by a nominee and still qualify for the tax reliefs. Nominee ownership is a key requirement in enabling financial advisers to manage their clients’ investments on platforms. In April 2015, Octopus Investments announced that it had completed a development with Transact to enable shares in its VCTs to be brought and held on the platform.

Jonathan Gunby, Chief Development Officer at Transact said: “This development further demonstrates our commitment to providing access to the widest range of assets. We are pleased to have worked with Octopus to simplify the VCT investment process and will be adding more VCT providers.”

Shaun Sandiford, Head of Platform Distribution at Octopus Investments commented: “VCTs are becoming an increasingly popular planning tool as more advisers and investors become familiar with the role they can play in an investment portfolio. We have already started to see the benefits from our pioneering development with Transact and are pleased that this channel is now being more widely discussed among VCT providers.”

Daniel Kiernan added: “Our roundtable showed that other VCT providers see acceptance on a platform as not only a way to make life easier for existing IFAs, but also as an opportunity to engage new IFAs. But advisers need to be cognisant of the issue of suitability. This was a fear expressed by some providers and some advisers we spoke with. They see platforms as a mass-market product and VCTs as a niche market product and therefore feel uncomfortable with VCTs listing on platforms. Ultimately, suitability is something that will sit with the adviser and not the platform or provider – so it must be hoped that if VCTs do become commonplace on platforms, it doesn’t lead to complacency or mis-perceptions about what these products are.”

Thought leaders from Octopus Investments, Seneca Partners, Deepbridge Capital and HM Treasury will debate challenges and opportunities in tax efficient investments including VCT at the Alternative Investment Summit, which takes place on 22 October at the Royal Institute of British Architects. To reserve your place, visit http://alternativeinvestmentsummit.co.uk/registration/.