For today’s discerning financial and investment professional
A special combined issue with
M AGAZINE
Go on ‘The B of the Bang’ with IFA Magazine Launch of M&G's Positive Impact Fund
Octopus: AIM and tax-efficient investment
September 2020
ANALYSIS
REVIEWS
Model Portfolios - bringing transparency to the industry
IFAM91/GBI21
COMMENT
INSIGHT
E v e rg r e e n Fun d N ow Open
Praetura EIS Growth Fund
Next soft close 30th September 2020, with anticipated full deployment by 5th April 2021. Capital at risk.
c o ntact jon.prescott@praetura.co.uk praeturaventures.com
CONTE NTS
CONTRIBUTORS
September 2020
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Welcome
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M&G Investments
Richard Harvey A distinguished independent PR and media consultant.
Editor of Hub News, Cherry Reynard, interviews Fund Manager John William Olsen on the launch of M&G’s new Positive Impact Fund
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ISA the latest state of play How the ISA came into being and where it’s heading
Faith Liversedge
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Investec The company ’s 100th launch includes its first retail ESG-linked Deposit Plan
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MPS Webinar “Model portfolios - bringing transparency to the industry ”.
Andrew Sullivan Editor GBI andrew.sullivan@cliftonmedialab.com
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Tony Catt Another exclusive extract from Tony Catt’s MPS Report 2020
16 Sue Whitbread Editor sue.whitbread@ ifamagazine.com
Clever Adviser George Cliff looks at the validity (or otherwise) of forecasting
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Richard Harvey
Alex Sullivan Publishing Director alex.sullivan @ ifamagazine.com
Kim Wonnacott Technical Sales and Marketing kim.wonnacott@ifamagazine.com
Richard Harvey looks at the changes in the workplace brought about by the pandemic
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M&G Investments How an investment fund can make a difference and a return at the same time
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Octopus Investments Jessica Franks, Head of Tax at Octopus Investments, takes a look at a valuable relief for clients who sold a business in the last three years
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Why are tax reliefs available on some investments? Octopus Investments on why tax reliefs direct long-term capital to businesses and sectors with high potential
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EISA Webinars The first two rounds of GBI Magazine’s series of EIS webinars
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Praetura Jonathan Prescott, Business Development Director at Praetura Ventures outlines their succesful and distinctive approach to investment
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Faith Liversedge Communications consultant Faith Liversedge focuses on a zero-cost, minimal effort way of improving how your business is perceived
Designed by: Becky Oliver IFA Magazine is published by IFA Magazine Publications Ltd, Arcade Chambers, 8 Kings Road, Bristol BS8 4AB Tel: +44 (0) 1173 258328 © 2020. All rights reserved ‘IFA Magazine’ is a trademark of IFA Magazine Publications Limited. No part of this publication may be reproduced or stored in any printed or electronic retrieval system without prior permission. All material has been carefully checked for accuracy, but no responsibility can be accepted for inaccuracies. Wherever appropriate, independent research and where necessary legal advice should be sought before acting on any information contained in this publication. The value of investments and the income from them can go down as well as up and you may not get back the amount originally invested. IFA Magazine is for professional advisers only. Full details and eligibility at: www.ifamagazine.com
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Open Offers Our listing of what’s currently available for subscription
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Career Opportunities From Heat Recruitment
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September 2020
W
WE LCOM E
WELCOME elcome to the combined September issue of IFA Magazine and GBI Magazine, and you will see we have been busy over the summer as it is packed full of content for you.
Right off you will find an interview with Fund Manager John William Olsen on the launch of M&G’s new Positive Impact Fund. Prudential take us through the genesis of the ISA, and Investec announce their 100th launch. 2020 was certainly the Summer of Zoom, and we have links to three fascinating webinars we’ve been hosting; the first in a series focused on model portfolios, and the first two in GBI Magazine’s series of EIS discussions. And talking about model portfolios, we have another exclusive instalment from our MPS Report by Tony Catt. George Cliff from Clever Adviser offers food for thought in the field of forecasting and estimating, while Richard Harvey wonders whether we may have seen the last of the 08.17 from Purley.
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We explore how an M&G investment fund can make a positive difference to the world we live in while also delivering a return. Jessica Franks, Head of Tax at Octopus Investments, explains a valuable relief for clients who have sold a business in the last three years and Octopus shares with us the reasons why tax reliefs are available on some investments. Our regular contributor and communications expert Faith Liversedge offers a quick fix to improve your practice’s image overnight. Finally, we’ve put together the latest career opportunities available in our sector, and our regular Open Offers section lists what’s currently available for subscription. So whether you’re working from home or you are back to the office here’s to a fantastic Autumn and in the words of Linford Christie let’s get going “on the B of the Bang“ Best wishes, Alex Sullivan Publishing Director IFA Magazine
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September 2020
M&G I NVESTM E NTS
ACCENTUATING
THE POSITIVE
Editor of Hub News, Cherry Reynard, interviews Fund Manager John William Olsen on the launch of M&G’s new Positive Impact Fund. This interview first appeared in Hub News Issue 40.
WHAT IS THE BACKGROUND TO THE M&G POSITIVE IMPACT FUND? The concept of impact investing is not new, but until recently, it was largely confined to the private equity and private debt areas. This meant it was the preserve of institutional and high net worth investors. Impact investing has now expanded into the listed equity space, with institutions such as the Global Impact Investor Network making a concerted effort to draw money from a broader investment pool. With this fund we seek to open up impact investment to a wider audience. HOW ARE YOU DEFINING ‘IMPACT’ FOR THIS FUND? The impact needs to be fully aligned with the company strategy. It needs to be the majority of what a company does and make a material difference to the company’s fortunes. In other words, it is about materiality and measurability. There are six different areas we target in the fund: three relate to the environment – climate solutions, clean air, water and land, and the circular economy, which is about reducing waste, re-using and recycling. Three have a social purpose – better health, better work conditions and social equality. It can be more difficult to find investments here, but we are looking at areas such as technology to promote financial inclusion, as one example. It is worth noting that, in the impact world, investors used to only consider the investment impact – that is,
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the specific impact achieved as a result of a specific investment – but increasingly they also want to consider whether a company has a positive social or environmental impact. The two are not incompatible, and we think companies whose products and services meet some of these acute social or environmental needs are set to exhibit strong growth characteristics. WHAT IS THE PURPOSE OF THE FUND? We want to beat the MSCI All Countries World index over a rolling five-year period and to invest in companies that aim to have a positive societal impact. We believe that companies able to generate an impact alongside an equity return have a significant tailwind. HOW DO YOU RESEARCH COMPANIES FOR INCLUSION IN THE PORTFOLIO? We have developed a three ‘i’ methodology to analyse companies for inclusion in our watch-list: this examines investment, intention and impact. For stocks to be considered they must score above average in all three areas. The investment case has to be sound and the company’s intention is vital. What is its culture? Its mission statement? How does it intend to deliver positive impact? It can’t be an accidental outcome. The impact is assessed, in part, through a ‘results chain’ framework – this is the same framework used by the Gates Foundation and World Health Organisation. We also map companies’ intentions to the UN Sustainable Development Goals.
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Our impact team considers the three ‘i’s of every potential investment, and we require full consensus from the team before a company makes it on to our watch-list. If one person disagrees then it doesn’t make the list. DOES THIS LEAD YOU TO CERTAIN AREAS OF INVESTMENT? The fund tends to have a growth bias, while this type of investing also generally lends itself to smaller companies. Large companies are often conglomerates and can have a lot of negative impact elsewhere in their businesses – it is easier to find impactful smaller companies. It is also easier to find companies in emerging markets that provide solutions for these environmental and social issues, simply because there are more issues to solve. The opportunities across different geographies can be very different. Banks in emerging markets have an important social purpose, facilitating micro-lending, for example, in a way that they don’t in developed markets. But it is easier to find sophisticated technology companies in the US. However, we don’t seek to generate returns as a result of our geographic allocation; this is only through stock-picking. This is a long-term strategy, with the intention of holding an investment for five years or longer. We think this gives companies time to generate impact, and they know that we are long-term shareholders, providing committed capital. And we are focussed, holding fewer than 40 stocks in the portfolio. WHAT WOULD MAKE YOU CHANGE YOUR MIND ABOUT A COMPANY? On the impact side, it would be if a company’s positive intentions changed, if it was not delivering the impact we expected or if part of the business began to generate negative impact. On the investment side, it would be if our investment thesis for the company did not pan out as expected, or if the company’s shares became unjustifiably expensive. IS THE UNIVERSE OF IMPACT STOCKS LIKELY TO EXPAND? We believe it will grow significantly. Having run a model portfolio for a year before the fund officially
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launched in November, we have seen that this is already the case. Of course, for listed equities, it remains challenging to measure impact. On the surface it is tough to say which companies are the most impactful and that is why we have to have such rigorous internal analysis and discussion. There may be two companies in very different sectors, with very different types of impact, and we have to find a meaningful way to compare them. At the same time, we have a responsibility to create a financial return, so we have to look at a company’s business model and whether it is run by a good management team with integrity. It is complex work and it takes a lot of research, including meeting management teams, to ensure we are making sound investment decisions. The value of investments and the income from them will rise and fall. This will cause the fund price, as well as any income paid by the fund, to fall as well as rise. There is no guarantee the fund will achieve its objective and investors may not get back the amount they originally invested. The fund invests mainly in company shares and is therefore likely to experience larger price fluctuations than funds that invest in bonds and/or cash. Changes in currency exchange rates will affect the value of investments.
About John William Olsen, M&G Investments John William Olsen, a Danish national, joined M&G in April 2014, and was appointed fund manager of the M&G Global Select Fund and M&G Pan European Select Fund in July 2014. He was later appointed deputy manager of the M&G Pan European Select Smaller Companies Fund in July 2016 and the M&G Positive Impact Fund in November 2018. John William joined M&G from Danske Capital, where from 2002 he had managed non-domestic equity portfolios, including the Global Stock Picking and Global Select equity funds, and also the European Select strategy. He joined Danske Capital in 1998 as a fund manager on the domestic Danish equities team, and in 2000 also became a global sector analyst focusing on technology and telecommunications stocks. John William gained a BA in business economics and then an MSc in finance and accounting from Copenhagen Business School.
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September 2020
PRU DE NTIAL
THE STORY OF
THE ISA AND THE LATEST STATE OF PLAY
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ndividual savings accounts (ISAs) were introduced on 6 April 1999, replacing the earlier Personal Equity Plans (PEPs) and Tax-Exempt Special Savings Accounts (TESSAs). ISAs are tax exempt cash, stocks and shares and/or innovative finance accounts under which any income received in the form of interest and dividends is free of tax, and on which there is exemption from capital gains tax on any capital growth. The estimated Exchequer cost of the tax relief for ISAs in 2018-19 was around £3.3 billion.
ADULT ISAS
Savings that are newly invested in an ISA account in a particular tax year are referred to as ISA ‘subscriptions’, although income earned in an ISA account remains tax free whether or not further subscriptions are made. The value of savings accumulated in an ISA account (as measured at the end of the tax year) including capital growth and any interest and dividend income retained in the account is referred to as ISA ‘holdings’.
Following a comprehensive review, changes to ISAs were announced in July 2007. From April 2008 the previous mini/ maxi distinction was abolished in favour of a simple cash and stocks and shares distinction with an overall limit on the amount that could be invested in any one tax year, and rules concerning the maximum that could be invested in cash.
Because the subscription limits are tax year based, ISA statistics are analysed using income tax years (running 6th April to the following 5th April).
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ISAs initially comprised three types of account: cash, stocks and shares, and life insurance. Insurance ISAs enabled savers to invest with insurance companies in funds offering potential for higher returns than cash ISAs at lower risk than stocks and shares ISAs. However, there was a relatively low uptake for these accounts and the separate life insurance ISA was abolished in April 2005.
Since the review, the main features of ISAs are as follows: • There are four main types of ISA - cash ISA, stocks and shares ISA, innovative finance ISA and Lifetime ISA. Lifetime ISAs can hold cash and/or stocks and shares; • In each tax year individuals may subscribe to separate cash, stocks and shares, innovative finance and Lifetime ISAs;
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PRU DE NTIAL
•
There is no income tax to pay on the income received from ISA savings and investments, nor is there any tax to be paid on capital gains arising from ISA investments;
• Individuals have the right to access their investment at any time and there are no statutory lockin periods; •
Each ISA manager must offer the ISA holder the opportunity to transfer their account to another manager. Funds invested in a stocks and shares ISA can only be transferred to another stocks and shares ISA; however funds invested in a cash ISA can be transferred either to a stocks and shares ISA or another cash ISA;
• Investments in approved life products can be held in either a cash ISA or a stocks and shares ISA; •
There is no life time limit on the amount that can be saved in an ISA(other than the annual subscription limit) or on the amount of income that can be earned tax free.
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September 2020
• Lifetime ISAs face different subscription limits of £4,000 per year, and face certain withdrawal charges for early access except in certain cases such as retirement or the purchase of a first home. JUNIOR ISAS Junior ISA accounts have been available since 1 November 2011 to children under the age of 18 who do not own a Child Trust Fund account (available to eligible children born on or between 1 September 2002 and 2 January 2011). Unlike an Adult ISA the savings in a Junior ISA account cannot be withdrawn until the child reaches 18. Only then can the savings either be withdrawn or the balance transferred into an Adult ISA. Adult cash ISAs are available to children from the age of 16, and eligible children can hold both a cash Junior ISA as well as an Adult cash ISA from that age. Children can open a cash as well as a stocks and shares account.
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September 2020
PRU DE NTIAL
those subscribing to cash ISAs increased by 1.4 million. Overall, adult ISA subscriptions rose to 11.2 million in 2018-19 from 10.1 million in 2017-18. Around £67.5 billion was subscribed to adult ISAs in 2018-19, an increase of £2.3 billion on 2017-18. This was driven by the rise in cash ISA subscriptions, which rose by £7.3 billion. The amount subscribed to stocks and shares ISAs fell by £5.2 billion compared with 2017-18.
HELP TO BUY: ISAS
The average subscription in a stocks and shares ISA in 2018-19 was £9,331 and £5,187 for cash ISAs – slightly down on 2017-18.
The Help to Buy: ISA scheme was launched on 1 December 2015 with accounts available through banks, building societies and credit unions. The scheme enabled people saving for their first home to receive a 25% bonus to their savings from the government when they bought a property of £250,000 or less (£450,000 in London). This meant that for every £200 saved, first-time buyers could receive a government bonus of £50. The maximum government bonus was £3,000.
INCREASE IN JUNIOR ISAS
The scheme was closed to new accounts on 30 November 2019, though Help to Buy: ISA account holders can continue saving into their account until 30 November 2029 when accounts will close to additional contributions. The Help to Buy: ISA government bonus must be claimed by 1 December 2030.
GENDER BREAKDOWN
LIFETIME ISAS The Lifetime ISA was announced at Budget 2016 and became available in April 2017. People who are under the age of 40 can open a Lifetime ISA and save up to £4,000 per year. The government will then top this amount up by 25%. This means that for people who save the maximum each year, the government will top up the account with £1,000. Lifetime ISA funds can be put toward a deposit for a home that is worth a maximum of £450,000 in all areas of the UK, or taken at age 60 to be used as retirement income. HOW ISAS PERFORMED IN TAX YEAR 2018-19 According the HMRC statistics published in June 2020, the number of investors subscribing to stocks and shares ISAs in the 2018-19 tax year fell by 450,000 from 2017-18, while
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Around 954,000 total Junior ISA accounts were subscribed to in 2018-19, the scheme’s eighth full financial year since launch, up from 907,000 in 2017-18. Some £974 million was subscribed to in these accounts in 2018-19, around 57% of which was in cash. The average amount subscribed to a junior stocks and shares ISA was £1,465 and £830 in a junior cash ISA.
There were 11.439 million ISA subscriptions by women by the end of the 2017-18 tax year compared with 10.594 million for men. However, men have higher average balances than women (£27,643 versus £24,831). Stocks and shares ISA subscriptions were greater among men (1.3 million) than women (1.025 million), but the reverse is true when it comes to cash ISA subscriptions (2.889 million for men versus 3.585 million for women). Vince Smith-Hughes, director of specialist business support at Prudential UK said: “The change in ISA subscriptions, for both cash and stocks and shares ISAs, may be partially attributed to the volatile markets we experienced in 2018, with investment returns from some markets producing negative returns. This could have made potential stocks and shares investors more nervous. “It’s interesting to see that higher income groups show a stronger preference for stocks and shares ISAs over cash ISAs, whilst the opposite applies for lower income groups. “One tried and trusted method of dealing with volatile markets is to invest on a regular basis and therefore ‘average out’ the price an investor buys in at. By making a single investment, either at the start or the end of the tax year, they might or might not be lucky with their timing.”
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Enhanced for efficiency The Prudential ISA online service We understand that your time is precious, so make your client management even more efficient with our Prudential ISA online service. It comes with easier reporting on valuation history, faster analysis and valuation breakdown, simpler applications and full transaction history. Boost your ISA process at pruadviser.co.uk/isaonline This is just for UK advisers – it’s not for use with clients. The value of any investment can go down as well as up so your clients might get back less than they put in. Provided by Link Financial Investments Ltd.
Prudential is a trading name of Prudential Distribution Limited. Prudential Distribution Limited is registered in Scotland. Registered Office at Craigforth, Stirling FK9 4UE. Registered number SC212640. Authorised and regulated by the Financial Conduct Authority.
September 2020
I NVESTEC
INVESTEC UNVEILS
100TH
LAUNCH Setting new standards for the industry Investec launches its first retail ESG-linked Deposit Plan.
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nvestec has launched the UK’s first retail ESGlinked Deposit Plan. The product is part of Investec’s 100th launch, marking 12 years in which Investec has offered consistently available Deposit Plans and Investment Plans.
The FTSE4Good 6 Year Deposit Plan 1, the first of its kind, is a 6-year fixed term Deposit Plan tied to the FTSE4Good UK 50, an index made up of the largest 50 companies in the FTSE which meet defined ESG criteria. The product returns 18% (equivalent to 3% per annum) if the FTSE4Good UK 50 is higher than its starting level at the end of the 6 year term. If the FTSE4Good UK 50 is equal to or lower than its starting level, the investor only gets back his or her initial deposit. The Plan offers a sustainable alternative to Investec’s long-standing FTSE 100 6 Year Deposit Plan. Harris Gorre, Investec’s Head of Financial Products, commented: “Over the course of 100 launches, we have constantly focused on improving every aspect of our products to set new standards for the industry. Today’s announcement is one of a number of innovations that we have made, but is one that is particularly meaningful for us and of course our clients, who can achieve interest rates 2-3 times greater than in cash while investing in products that improve the world around them.” Responding to an independent survey of retail investors carried out on behalf of Investec in April 2020, 51% of respondents felt that sustainable investing was important to them. Tanya Dos Santos, Global Head of Sustainability at Investec, continued: “Partnering with our clients and incentivising them to be more responsible and impactful is a critical element of our sustainability strategy. We see this pioneering product as another significant step in using our financial expertise to address socio-economic issues and create a more sustainable world.”
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Investec CEO Fani Titi is one of 30 global leaders that make up the CEO Alliance of the United Nations Global Investors for Sustainable Development who aim to accelerate action to scale up sustainable investment globally. WHAT IS THE FTSE4GOOD UK 50? The FTSE4Good UK 50 Index tracks the performance of the shares of the 50 largest companies listed on the London Stock Exchange which also demonstrate strong Environmental, Social and Governance (ESG) practises. The stocks that make up the FTSE4Good UK 50 Index generally also feature in the FTSE 100 Index, since both indices track the shares of the largest companies listed on the London Stock Exchange. FTSE Russell, which oversees the indices that carry its name, gives an ESG rating to companies based on how well they manage Environmental, Social and Governance issues. Environmental issues include how well the company manages its water usage, how much it pollutes, and how effectively the company combats climate change. Social issues include how responsible the company is to its customers, how well it complies with labour standards, and the company’s policies towards human rights and its communities. Governance issues include how effectively the company prevents corruption, the quality of its management and how transparent the company is with its taxes. The FTSE4Good 6 Year Deposit Plan 1, along with the rest of Investec's award winning range, is available at www.investecforadvisers.com.
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WE BI NAR
September 2020
MANAGED
PORTFOLIO SERVICES WEBINAR 07.07.2020
In the latest of a series of webinars, IFA Magazine invited a specialist panel to lift another bonnet and have a good look underneath – this time the topic was “Model portfolios - bringing transparency to the industry”.
Chaired by Jonathan Gamble (Asset Risk Consultants), the panel consisted of • Wayne Bishop (King & Shaxson) • George Cliff (Clever Adviser Technology) • Craig Burgess (EBI Portfolios) • Ash Weston (8AM Global) • Tony Catt (Independent compliance consultant) The session began with a look at Tony Catt’s recent report on the MPS solutions which are out there; to put it into context, Citywide have published analysis of 16 models – Tony's report looks at more than 65.
They then highlighted some of the factors an IFA should consider when choosing an MPS partner, touching on other topics such as the IFA trend to move away from advisory to discretionary management services, how they see the MPS markets evolving and which resources they supply to support IFAs. The discussion expanded to cover the issue of Agent as Client, ratings the panel use, MPS charging structures and transparency. For the last 20 minutes the panel was joined by Louise Jefferies of Gunner & Co, the leading business broker in the IFA, financial planning and wealth management space.
He covers performance and risk comparisons, fee and return analysis and explores the investment process and due diligence.
Louise addressed the issues of MPS as a major driver of M&A activity in the IFA marketplace, and discussed whether MPS is about delivering value to the client or AUM for the adviser.
After this brief introduction, the panel were asked what they think are the advantages of an MPS for both the advisor and the client.
She also shed light on the metrics that make advisers become attractive to a prospective buyer.
In his report, Tony reviewed some of the panellists’ portfolios. The discussion moved to bring that analysis to life, as each described the approach they take in terms of active/passive: value/growth. The panel discussed what makes their organisations different and went on to examine the role of research in the development of MPS models.
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To wrap up, bearing in mind that ‘Brexit’ was the word of 2019, ‘Covid-19’ the word of 2020, the chair asked the panel for their predictions for the word of 2021. It was a lively, entertaining and informative session which is well worth a catch-up here https://register.gotowebinar.com/ recording/7795552142675813388
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TONY CATT
September 2020
CENTRALISED INVESTMENT PROPOSITION (CIP) Another exclusive extract from Tony Catt’s MPS Report 2020
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FA firms tend to use a Managed Portfolio Service as part of their CIP. Firms need to consider what makes the CIP likely to be suitable for its target clients and meets their needs and objectives. This could involve any or all the following issues: • terms and conditions of using the CIP. • CIP’s charges. • CIP provider’s reputation and financial standing. • range of tax wrappers that can invest in the CIP. • type of underlying assets in which the CIP invests. • CIP’s flexibility and whether it can be adapted to meet individual client’s needs and objectives and • CIP provider’s approach to undertaking due diligence on the underlying investments. A firm may also decide to refer investment selection to a third party. Where a firm refers investment selections to
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a discretionary manager, both the introducing firm and the discretionary management firm have obligations to ensure that a personal recommendation or a decision to trade is suitable for the client. The obligations on each party will depend upon the nature and extent of the respective service provided. Both parties should be clear on their respective service, and ensure they meet the corresponding suitability obligations. If either or both parties are not clear, there is a risk that clients may receive unsuitable advice and/or have their portfolios managed inappropriately. There are three broad structures firms use when working with a third-party discretionary investment manager to provide a CIP. The advisory firm: • arranges for the client to have a direct contractual relationship with the discretionary manager. • holds the relevant permissions for managing investments and delegates the investment management to the discretionary manager; or
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TONY CATT
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arranges for the investment management to be carried out by the discretionary manager but on the basis that the client does not have a direct contractual relationship with the discretionary manager. Instead the discretionary manager treats the advisory firm as its client, which is acting as the agent of the end investor. In this case, the FCA expects the advisory firm to explain the position clearly to its clients. In particular, it should emphasise that it is not carrying out the investment management itself and that the discretionary manager in not treating the end investor as its client.
ENSURING A RECOMMENDATION TO SWITCH EXISTING INVESTMENTS INTO THE CIP IS SUITABLE Where a firm offers a CIP, it should not systematically transfer all its clients’ existing investments into the CIP without considering the individual needs and objectives of each client. Firms should consider whether
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a recommendation to a client to sell their existing investments is suitable. A CIP will not be suitable for all clients. Even when a firm conducts adequate due diligence and designs its CIP to meet the needs and objectives of its target clients, a firm must take reasonable steps to ensure a personal recommendation is suitable for each client. A firm must have a reasonable basis for believing that its clients have the necessary knowledge and experience to understand the nature of the risks of the underlying investments held in the CIP. The firm should explain these risks to its clients in a way that they are likely to understand. This is particularly important where the CIP uses non-traditional investments. When the CIP solution is not suitable for an individual client, a firm must either recommend an alternative suitable solution or make no recommendation to the client. It is not acceptable to shoe-horn clients into the CIP solution.
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September 2020
CLEVE R ADVISE R TECH NOLOGY
THE DARK SIDE OF ANALYST ESTIMATES AND FORECASTS
George Cliff, Research Analyst and Pre-Sales Technical Manager at Clever Adviser Technology takes a critical look at the validity of predictions in unprecedented times.
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n Friday 5 June, in the face of growing Coronavirus cases and a worsening domestic (and global) economy, all three major US indexes made record moves to the upside (with the Nasdaq recording an all-time record high) in response to ‘better than expected’ unemployment rates in the US. The percentage of US citizens unemployed in April was 14.7%, this number coming down to 13.3% in the month of May -a welcome reduction, and perhaps a positive sign for the US economy. Although a promising turn for the US economy, it was not such a great time for the many analysts and economists who tried to forecast the number… and got it terribly wrong. The consensus estimate (or ‘expected’) unemployment rate for May, set by the brightest and most ‘in the know’ on Wall Street, predicted an increase on April’s numbers to 19.5% unemployment in May. An increase of over five points on April’s figures but a whopping six percentage point miss on the actual of 13.5% for May. And, in fact, “the greatest miss in forecasting history”. Not only was the consensus estimate several deviations away from the actual, it was also in the completely wrong direction.
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Not one of the 90 economists and analysts surveyed predicted an improvement in the numbers from April to May. It begs the question - how could they have been so wrong? A number of those surveyed have scrambled to defend their position by claiming flaws in the data-gathering processes used at the Bureau of Labor statistics (BLS), who research and report on the actual number and have done for decades. Some others have simply blamed the unprecedented nature of the times we find ourselves in. I can’t comment on the processes of the BLS, but I do agree that these unprecedented times have made it very difficult to make decisions and forecasts on the future. Partly because we have no previous similar experiences from which we can build assumptions, but more importantly because of the mindset and behaviour it encourages. A fearful and gloomy one. COULD THE EMOTIONAL TAIL BE WAGGING THE FORECASTING DOG? Is it possible that these learned and objective beings have allowed their emotional self to steer their predictions on the future? Personal bias and mood can subconsciously frame
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CLEVE R ADVISE R TECH NOLOGY
our thinking in such a way that we ourselves may not even see it. We talk about market momentum, but this is driven by mood momentum and the sentiment of the market, which at present is incredibly bearish. Where these economists have perhaps had to ‘fill in the gaps’ due to missing or inconsistent data, could they be doing so with a bias to the downside? Is this perhaps a major flaw in the validity of forecasts given just how influential on market mood, but susceptible to personal bias (and wrong), they can be? THE EVIDENCE ON FORECASTING Whether it’s the weather or lottery numbers, we (as humans) prove time and time again that we are unable to predict the future with any real consistency over time. This phenomenon boasts a rich body of academic study, some of which I would be remiss not to share. A leading and relevant example of the folly of forecasting can be seen in a study published by Professors John Graham and Campbell Harvey in the Quarterly Journal of Economics. They asked 500 CFOs (Chief Financial Officers) from some of the largest public companies in the US to predict the behaviour of the S&P500 in the following year and how certain they were of their predictions. They did this every quarter for 10 years, generating some 13,000 predictions. Just over 70% of those predictions were wrong by some margin but boasted an 80% confidence rate. So, they were very wrong, but very sure. AND very influential! This was more a test of over-confidence and hubris than predictive ability, demonstrating not just how wrong we
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can be but how certain we are about the unknown. They found those CFOs with a greater confidence in their incorrect forecasts tended to over-lever their businesses and make poor operational judgements and so this behaviour comes with risks. Some other more playful examples are the predictions of Decca records who thought “guitar music is on the way out” in 1965 and turned down the opportunity to sign The Beatles. Variety Magazine went so far as to say rock and roll will be “gone by June” in 1966. The point being, we are not always quite the prophets we like to think we are, and even the brightest in any given industry are prone to making mistakes about the future. This is just as much a debate on the distorting effect of one’s biases and emotional make up as it is their predictive capacity, one heavily influencing the other no matter how Spock-like and rational we try to be. THE DARKER SIDE OF THE ESTIMATES But what if there was another, much darker, force at play when analysts and economists produce estimates and forecasts? Perhaps a conflict of interest. A conflict of interest that sees these individuals, in the employ of big sell-side banks not only set estimates (and the mood of the market), but trade in it also. In other words, they have skin in the game. As noted earlier, the market lives and dies by estimates, be they unemployment or earnings or otherwise, and how well the actual data does versus them. If the actual
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September 2020
CLEVE R ADVISE R TECH NOLOGY
data surprises to the upside of the estimate, then the market rises. If the actual is lower than predicted, then a move down is usually what follows. There appears to be no greater influence on market movement than the phenomenon of ‘estimate surprises’ but they are also one of the easiest mechanisms to manipulate.
This is not to say that recent unemployment estimates, and just how wrong they were and the influence they seemingly have had on market valuations, are suspicious. Although they could be. Market sellers, which these banks are, need buyers and buyers generally buy more freely when feeling positive and optimistic of the future.
This has been a topic of great debate and study for many years amongst academics and practitioners alike. Of all investigations, Professor Andrew Calls proves to be the most extensive and meticulous in its findings. He and his colleagues set out to examine as many earnings estimates as they could find on US listed stocks. They studied 370,000 individual analyst forecasts, spanning 10 years, and found a pattern emerge amongst bearish analysts who wanted the price to fall on a particular company.
My only recommendation would be to take such predictions with a pinch of salt in the knowledge that there are many reasons why they could be wrong and not many examples of where they are right.
They found 30,000 instances (almost 10% of the total data set but 25% of all bearish analyst estimates) where a bearish analyst set astronomically high earnings estimates, thus driving the average estimate, or consensus, higher and making it harder for the business to beat it. When the business didn’t beat the estimate, the stock price fell, and the analyst got what they wanted. This was found to be more prominent when an analyst was under pressure to justify their bearish stance when the rest of the market was bullish. To be bearish on a stock is to expect a price decline as a result of poor financial performance, so to set such high earnings estimates is a contradiction to your own opinion and clearly manipulation in play. Professor Call and his team stressed the risks present in such a conflict as the one we see above, this level of influence on both sides of the trade essentially allowing these individuals to ‘rig the game’.
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About George Cliff MBA George is both a passionate research analyst and Pre-Sales Technical Manager at Clever. An MBA graduate and Investment Management Certificate candidate, George spends much of his time immersed in the industry, in search of new opportunities and practices to better both the business and its offerings. Integral to the continued development of the firm, George is responsible for many of the projects and reports that have shaped the last five years of operations at Clever. He is also very active in the sales function as a key presenter and content writer, providing technical assistance and guidance through the pre-sales process.
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September 2020
96% of IFAs would recommend us* Squawk! Who’s a Clever boy?
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IMPORTANT INFORMATION: This document has been prepared by Clever Adviser Technology Ltd in conjunction with 8AM Global LLP. 8AM Global LLP is authorised and regulated by the Financial Conduct Authority. This document should be considered in conjunction with all supporting documentation available. Professional financial advice should always be sought prior to investment. Clients should be aware that the value of investments and the income from them may fall as well as rise and you may not get back what originally invested. Investments which are likely to yield a high income may do so at the expense of capital, or at a greater risk to the capital, and the income from them may fluctuate up or down. Past performance is no guarantee of future returns. Overseas investments can fluctuate in value according to market and currency conditions. This document does not constitute financial advice and should not be regarded as a solicitation to invest. Access to the 8AM CleverMPS suite is only available through a financial adviser.
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September 2020
RICHARD HARVEY
TO COMMUTE OR NOT TO COMMUTE,
THAT IS THE QUESTION?
Richard Harvey takes us through the positives and negatives of the new normal working practices.
I
f you’re struggling to find an upside to Covid-19, consider this: in future you may get to spend more time with your partner and kids.
Ignoring the wails of “you reckon that’s an upside?” there is no question that working from home in recent months has led us to re-evaluate whether flogging into the office on a daily basis is really a productive use of time. Certainly that’s the view of John Spiers, the boss of wealth management firm EQ Investors, who has earned plaudits from his clients for putting together a series of video emails updating them on the state of the pensions and savings market. Spiers, who has the comforting presence of a kindly grandfather dispensing Werther’s Originals, balances the bad news with a dollop of optimism. During the summer, the former outweighed the latter – but what did you expect when the government issued a three-year gilt with a negative rate of interest?
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However, he has also addressed the social impact of the pandemic, and in a move which will be watched with great interest by other IFAs, he will be offering his staff the ability to continue working from home in future – 50 percent of his people were already doing that during lockdown. He reasons – just like anyone who has ever run a business from home - that the daily commute to the office is wasted time, and traditional office hours are a constraint on those whose minds and productivity are most efficient at, say, six in the morning or eight at night. And he goes further – if his IFAs can achieve in four days working from home what they might otherwise have accomplished in five days at the office, then why not use that saved time to spend with family and friends? The outcome will be a much better work-life balance, while a reduction in the firm’s carbon footprint is a nice bonus. Which, in a much more modest way, we have discovered ourselves.For the past eight months, the Good Lady H and
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I have conducted most of our client business via Zoom. For me, it has meant foreswearing the hippy tie-dye tee shirt for a collar and tie, but that’s a small sacrifice in exchange for being able to read the morning paper in bed. For Lady H, it’s meant no more early morning rattler to London Bridge, or long drives to Milton Keynes and Portsmouth. On the other hand, it has also meant an increase in furtive visits to the fridge and an afternoon reacquaintance with Randolph Scott Westerns on Channel 4. Perhaps the kind of extra-curricular skiving that Shobi Khan, chief executive of Canary Wharf Group, had in mind when he railed against the lack of clear information from the government about workers returning to their offices. In particular, he wanted clear assurances about the safety of public transport, saying it was an “oxymoron” that people could fly off to Spain, Italy or France “but heaven forbid you go to the office.
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“The old guard had to see the whites of your eyes to see you were working. That has gone away, but having people back in the office to be creative and to collaborate – companies need that to thrive”. Which is debatable, particularly for sales-oriented businesses. For example, I know of at least one large recruitment agency which plans to allow a substantial chunk of its salesforce to work from home, on the basis that digital connectivity between office and individuals will clearly show who is performing, and who isn’t. All of which clearly points to a seismic shift in working patterns across many sectors, and a decreasing demand for expensive, high maintenance commercial buildings, and an increase in sales of funky tie-dye teeshirts and tracksuit bottoms.
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September 2020
M&G I NVESTM E NTS
MAKING A
DIFFERENCE (AND A RETURN) M&G Positive Impact fund - embracing the Sustainable Development Goals framework
T
he world is facing a rising tide of societal challenges, from the potential chaos associated with the breakdown of our climate, to unsustainable levels of waste and pollution, to vast and growing social inequality. Governments around the world lack the resources needed to deal with these challenges on their own; for example, to achieve the United Nations Sustainable Development Goals (SDGs), it has been estimated that some US$6 trillion a year will need to be spent, but government alone cannot foot this bill, with an annual funding gap assessed to be in the region of some US$2.5 trillion. Because of this, investment capital is vital, and impact investors are playing an increasingly pivotal role in directing this capital where it is most needed. Impact investment means investing in companies that aim to deliver meaningful societal outcomes by addressing the world’s major social and environmental challenges, while at the same time producing a financial return. These investments target a wide range of impact areas, which can include battling climate change, providing accessible
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healthcare, or delivering quality education, among others. These impact investment areas are increasingly being mapped to the SDGs, which provide a framework against which impact can be assessed and measured. Historically, impact investing consisted primarily of private finance to fund specific, impactful projects. Because of this, it sat chiefly within the sphere of institutional or high net worth investors, with little access for the general public and more limited capital available. However, this is changing with the emergence of listed equity funds with impact remits. These can provide liquid, open-ended investment vehicles, which allow for the ‘democratisation’ of impact, giving a stake in the game to ordinary people who want their investments to make a difference, or who realise the vast opportunities offered by investing for the good of society. The M&G Positive Impact Fund provides such an opportunity for those who want to make a difference with their investments without giving up returns. Through a concentrated portfolio of global stocks, we make long-term
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investments in companies that aim to generate a positive social and/or environmental impact alongside a financial return, using a disciplined, robust stock selection process. The value of the fund's assets will go down as well as up. This will cause the value of your investment to fall as well as rise and you may get back less than you originally invested. We have a rigorous approach to identifying impactful investments, which we call our ‘triple i’ methodology. This analyses the Investment quality, Intentionality (companies in the fund must have a clear intention of delivering impact – it cannot be an accidental outcome) and Impact of a company to assess its suitability for the fund. We embrace the Sustainable Development Goals framework and invest in companies focused on six key areas, mapped against the SDGs, three of which are social and three environmental. By mapping these investment areas to the SDGs, the fund follows a solid framework for determining material impact areas, while also helping to frame the measurement of how those positive impacts are being achieved.
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Given the scale of the challenges the world is facing today, we need to act now to help protect the future of the planet and our place in it. We believe that impact investment should increasingly help drive solutions, and can do so while delivering attractive investment returns to investors. Changes in currency exchange rates will affect the value of your investment. The fund invests mainly in company shares and is therefore likely to experience larger price fluctuations than funds that invest in bonds and/or cash. For more information, please visitwww.mandg.co.uk/ positiveimpact.
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September 2020
OCTOPUS I NVESTM E NTS
HOW ALAN’S ADVISER HELPED HIM KICKSTART HIS
ESTATE PLANNING
Jessica Franks, head of tax at Octopus Investments, takes a look at a valuable relief for clients who sold a business in the last three years
L
et’s consider a client scenario.
John has been Alan’s financial adviser for 27 years. For most of that time, Alan ran his own business. Alan is a widower, so was reluctant to retire, but two years ago, he finally decided to sell the business. In the event, he received £3 million. Alan wanted to invest around half the proceeds to generate a retirement income, which John helped him do soon after the sale of the business went through. Selling the business did create a problem, though. John made Alan aware that now he’d sold his business, he was left with a substantial inheritance tax liability. Without planning, this would reduce the amount his three daughters would receive when he dies. Alan agreed that this is something he wanted to plan for. But at the time, having just retired he was preoccupied with generating an income and using his free time to travel. So, he left the estate planning for another day. One year later, and unfortunately Alan has developed some serious health issues. He decides that it’s now or never to do some estate planning. John cautions him that traditional
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forms of estate planning, such as making lifetime gifts, can take seven years to become fully free from inheritance tax. However, Alan does have another option. JOHN HAS SOME GOOD NEWS FOR ALAN Had Alan passed away when he still owned his company, his shares in the business would have been expected to qualify for Business Property Relief (BPR), a longstanding relief from inheritance tax. This would have meant he could have left those shares to his daughters free from inheritance tax. Ordinarily, a new investment into BPR-qualifying shares must be held for two years before it is free from inheritance tax. However, John has some good news for Alan. John explains to Alan that there’s a three-year window following the sale of a business that qualified for BPR. During that period, if Alan uses some or all of the proceeds from the sale of his business to purchase another BPR-qualifying business, that new investment should immediately qualify for BPR. The same is true if Alan invests the proceeds in the shares of a BPR-
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qualifying business managed by someone else, or in a BPR-qualifying investment portfolio. This comes as a huge relief to Alan, who had been worried that he’d left estate planning too late. Based on Alan’s objectives and attitude to risk, John recommends investing £1 million into a BPR-qualifying portfolio managed by a specialist manager. By making the investment John recommends, Alan would hold shares in a portfolio of unlisted or AIM-listed companies that would be expected to be able to be left free from inheritance tax to his children when he passes away. BPR-qualifying portfolios are higher risk investments than Alan’s portfolio of listed equities, and the tax relief is designed to compensate investors for the risk they take. ALAN’S ADVISER EXPLAINS THE RISKS John makes it clear to Alan that the value of any BPRqualifying investment, and any income from it, can fall or rise. Alan may not get back the full amount he invests. John also explains that BPR is assessed by HMRC on a case-by-case basis, and that this assessment happens when an estate makes a claim. Entitlement to claim the relief will depend on the company or companies Alan invests in qualifying for BPR at the time the claim is made. Tax relief will also depend on personal circumstances, and tax legislation could change in future. While Alan is not expected to need to access this pot of money during his life, the investment will remain in
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his name, and so he will be able to request a withdrawal should he need to. John makes clear that withdrawals cannot be guaranteed, though, as the shares of unlisted companies can be harder to sell than shares listed on the main market of the London Stock Exchange. They may also be more volatile. PEACE OF MIND Alan is comfortable with these risks, and decides to act on John’s recommendation. He invests the £1 million into a BPR-qualifying investment. Should Alan be unfortunate enough to pass away tomorrow, he knows that his daughters should inherit those shares without having to pay inheritance tax. As you can imagine, this is valuable peace of mind for Alan. At Octopus, we work with a lot of advisers like John whose clients have sold a business in the last three years. So we’ve created a dedicated webpage for this client scenario. You’ll find a short video and more detailed information, including how the planning might look in practice, to help you take the next step with your own client. You’ll also be able to contact one of our experts should you have any questions. To find out more, go to octopusinvestments.com/alan. We do not offer investment or tax advice. Issued by Octopus Investments Limited, which is authorised and regulated by the Financial Conduct Authority. Registered office: 33 Holborn, London EC1N 2HT. Registered in England and Wales No.03942880. Issued: June 2020. CAM009829.
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WHY ARE
TAX RELIEFS AVAILABLE ON SOME INVESTMENTS?
Tax reliefs direct long-term capital to businesses and sectors with high potential
Whether it’s income tax relief, inheritance tax relief, deferral of a capital gain or some other tax planning need, clients sometimes like to know why the Government allows them to claim these benefits. At a high level, these reliefs represent an incentive to put capital into an investment that carries an extra element of risk, and keep it there for a number of years. As such, tax reliefs represent a stimulus for economic growth. While this is an accurate explanation for why a client can claim a relief, it’s also rather abstract. One way to bring the concept to life is to give examples of companies that meet the qualifying criteria for the relevant investment.
I
n the middle years of the 1990s, the UK Government kicked off a quiet revolution in the way long-term investment is directed to smaller companies.
In 1994, the Enterprise Investment Scheme was launched. The following year saw the advent of Venture Capital Trusts. June 1995 also saw the launch of the Alternative Investment Market (AIM). A quarter of a century on, these initiatives continue to play an important role in directing patient capital towards early-stage businesses. If you have a client with a tax planning need, you may well decide to recommend a tax-efficient investment that has exposure to unquoted or AIM-listed companies.
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The next Octopus Online Show will feature members of the Octopus Ventures team, one of Europe’s largest venture capital teams. As well as hearing from them, you’ll also hear first-hand from some early-stage company CEOs about how the money injection from tax relief investments has helped their business thrive. Search online for ‘Octopus Online Show’ to learn more and to register for an invitation to watch. Another way to demonstrate the economic benefits of these tax reliefs – and therefore help a client understand why they exist – is to consider the existence of AIM itself. THE ECONOMIC SUCCESS OF AIM On the first day of trading, there were ten companies listed, with a combined value of £82 million. Today, AIM consists of around 850 companies, with a combined market
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capitalisation of over £100 billion. Since 1995, the market has helped over 3,800 companies raise more than £115 billion. Other equity markets, like the Nouveau Marché in France, have attempted to replicate AIM without the same success. Not every company on AIM qualifies to be held as part of a tax efficient investment. But enough of them have down the years to make a strong argument that tax reliefs, and the long-term investments they encourage, have contributed to AIM succeeding where attempts to copy it have failed. The success of AIM has had a positive effect on the UK economy. In 2019 alone, AIM companies contributed £33.5 billion to UK GDP and directly supported more than 430,000 jobs, according to a report published in June by Grant Thornton. AIM also tends to attract companies in progressive, innovative sectors, for example medical research, and robotic process automation software. The reliefs your clients can claim encourage investment in these sectors. Directly, because such companies often meet the relevant qualifying criteria, and indirectly, because the existence of AIM provides a venue for companies to raise capital to scale up their innovations. THERE ARE RELIEFS BECAUSE THERE ARE RISKS So there’s no free lunch here. Rather, there is an acknowledgement that some areas of investment tend to be riskier than others. And it’s important to consider all the risks before recommending a tax-efficient investment.
September 2020
Put in this context, it’s straightforward to see why the Government offers tax reliefs to encourage long-term investment into sectors and companies where the economic rewards can be great, but where there is also a lot of uncertainty. That said, investors need to be aware that tax treatment will depend on their personal circumstances, and tax rules may change in future. Tax reliefs also depend on the companies invested in maintaining their qualifying status for the relevant relief. DON’T MISS THE NEXT OCTOPUS ONLINE SHOW To hear about unquoted early-stage businesses that are supported by tax-efficient investment capital, you should watch episode 3 of the Octopus Online Show. Search online for ‘Octopus Online Show’ to find out more. Go to The Octopus Online Show to find out more. VCTs and BPR-qualifying investments are not suitable for everyone. Any recommendation should be based on a holistic review of your client's financial situation, objectives and needs. We do not offer investment or tax advice. Issued by Octopus Investments Limited, which is authorised and regulated by the Financial Conduct Authority. Registered office: 33 Holborn, London, EC1N 2HT. Registered in England and Wales No. 03942880. Issued: August 2020. CAM010040.
For a start, such investments put capital at risk. The value of these investments, and any income from them, can fall as well as rise. Investors may not get back the full amount invested. In addition, the shares of unquoted and AIM-listed companies can fall or rise in value more than shares listed on the main market of the London Stock Exchange. They may also be harder to sell.
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E IS WE BI NARS
September 2020
ROUNDS 1 & 2 OF
GBI MAGAZINE’S SERIES OF EIS WEBINARS
Round 1 - Where has EIS been and where is it going? Moderated by Mark Brownridge, Director General of EISA, the panel comprised: • Chris Sandfield, CEO, CoInvestor • Brian Moretta, Head of Tax-Enhanced Research, Hardman & Co • Ewoud Karelse, Head of Tax Advantaged Investments, Tilney • Jonathan Prescott, Business Development Director, Praetura Ventures There was of, course, an agenda but like all the best events, the panel was happy to stray off-piste occasionally with interesting results. Topics covered included: • State of the Sector – EIS and the Tax Year End; before the pandemic, prospects were looking pretty rosy •
•
Transparency and communication. Is it time that the sector starts to lift the lid on what makes a sound investment, not just the AUM size? So, transparency of charges, investee companies and failure rates?
The panel unanimously agreed that there’s a lot of vital information that falls down the back of a fund manager’s sofa, so urged transparency and consistency in a) valuation methodology, prices/costs/fees, b) going wrong / gone wrong communications, c) shareholder rights communications • Derisking a portfolio and how managers choose investments • How do we grow this market? Increasing support from both advisors and investors Watch the webinar in its entirety https://register.gotowebinar.com/ recording/5581134624513646086
GBI
The impact of COVID-19 on EIS - what has been the biggest step change needed within the space, and what evidence is there for optimism? The panel noted there were already signs of the green shoots of recovery, and applauded the acceleration in the embracing of technology to deliver a better service than ever
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E IS WE BI NARS
September 2020
Round 2 - Advocate Technical: IHT, BR and Tax Planning Once again moderated by Mark Brownridge, the tonsorially avant-garde Director General of EISA, the panel comprised:
There is also an interesting anecdote about Oxford Capital and anaerobic digestion…
• Brian Moretta, Head of Tax-Enhanced Research, Hardman & Co
Other topics addressed include:
• Ewoud Karelse, Head of Tax Advantaged Investments, Tilney Although the Government earns £5bn in revenue each year from IHT, only 5% of deaths are actually liable to pay it. This webinar focused on the importance of planning ahead; 70 and 80-year olds may feel invincible, but at 90 everybody involved starts to get concerned. The session started with a good, clear overview of BR and IHT and covered reviewing the estate as it is now, and how it might be in the future. Gifting, cash flow planning, care and income needs all need to be taken into account. An overview of BR products revealed that the most popular involve energy assets or lending. For those new to IHT, a return of 3% might indicate low risk; on the contrary, such a return requires a gross return of 10%; BR products are generally relatively expensive compared with conventional investment products.
• An overview of BR, IHT and Tax planning – what does your organization do within the space? • What different investment strategies are there out there? • What risks are there within BR and IHT, and how can these be mitigated? • Is there transparency within the space? Are the charges, fees etc excessive? Is it easy to find out what and how much they are? All too often it isn’t… •
How is the space governed? There has been some evidence of poor corporate governance - how does this affect valuations, independence and conflicts of interest? Shareholders should not be disenfranchised; they need to be able to go to an AGM and hold the board accountable.
The discussion ended with 3 key pieces of advice for IFAs in this sector. It was a lively session, which you can watch here https://register.gotowebinar.com/ recording/5581134624513646086 GBI
The discussion turned to 3 live case histories which emphasise the importance of talking to your clients while they’re fit and healthy.
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June 2020 2020 September
PRAETU RA VE NTU RES
PRAETURA VENTURES Jonathan Prescott, Business Development Director at Praetura Ventures outlines their succesful and distinctive approach to investment.
WHAT HAS BEEN PRAETURA VENTURES APPROACH IN 2020 AND HOW MIGHT IT CHANGE IN 2021? “Our approach in 2020 is consistent with our approach in 2019: invest and support entrepreneurial, ambitious SMEs across the north of England. We always look to back strong management teams in exciting scaleable businesses who’ve shown a proof of concept, and in return, we provide more than money. This means actively supporting the founders of the companies we invest in with our experience, not just our money. For us, this approach is a prerequisite to invest and adds value to businesses. “Looking to 2021, while we won’t change the essence of our approach, clearly Covid-19 has chilled the market. However, we see tech – and particularly health tech – being
For advisers, we have huge desire to create open and honest communications and be 100% transparent. We’re certain this will broaden the appeal of venture capital, especially EIS, as we guide them through their investment journey
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a key driver going forward and helping the economic recovery. Besides that, our plan is to continue working with advisers to build strategic relationships, all via clear and transparent communication.” WHAT’S PRAETURA VENTURES’ USP? “We’re one of few genuine venture capital firms in the north and we have a relatively large team. The team all work together to deliver our more than money approach, which is what we believe sets us apart from the rest, and we’ve found that those we support have found it very valuable in the current climate. “For advisers, we have huge desire to create open and honest communications and be 100% transparent. We’re certain this will broaden the appeal of venture capital, especially EIS, as we guide them through their investment journey.” HAS YOUR FIRM CHANGED IN ANY WAY DURING THE YEAR? “Over the past year, the team has grown to 22 people. The additions over the past 12 months included appointing Andy Sumner as a portfolio MD, a major appointment to our senior team. Like most people, we’ve all been working remotely during lockdown but we’re planning a phased return to our office, which we opened last year in Manchester’s Spinningfields.
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“We’ve also launched a dedicated investor portal for EIS investors, allowing them to easily track and stay connected to their investments.”
The government has seen a need for private investment in Britain’s businesses and has catered for that need – it would be a real step backwards to reduce the relief that EIS offers now
June 2020 September
DO YOU HAVE ANY FEARS THAT FUTURE GOVERNMENT CHANGES COULD UNDERMINE THE SCHEME’S EFFECTIVENESS? “In short, no. Since EIS was formed, the changes made have typically been positive for investors and show that the government sees the benefits of the scheme and why it needs to support it. I can’t foresee any changes to undermine it, if any are made at all. “The government has seen a need for private investment in Britain’s businesses and has catered for that need – it would be a real step backwards to reduce the relief that EIS offers now.” IF YOU COULD INFLUENCE CHANGES TO THE SCHEMES, WHAT WOULD YOU SUGGEST?
WHAT ARE YOUR VIEWS ON THE GOVERNMENT’S RECENT CHANGES TO EIS? “The government’s changes to EIS rules around patient capital are overwhelmingly positive. Investors are being supported via the various tax reliefs for taking true risk to their capital, as the rules had always intended. Historically, conversations between advisers and their clients could be confusing given that many EIS solutions were marketed as ‘capital preservation’-focused, despite the adviser having to label them as ‘high risk’. The changes made have removed a significant amount of this confusion.”
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“Currently, I think the scheme rules are very generous and fair. However, it’s also up to us, as fund managers,
We’re agnostic in the sense that we don’t specialise in a specific sector, but there is a pattern in our portfolio in that they ’re all tech-enabled businesses
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September 2020
PRAETU RA VE NTU RES
to take responsibility and promote positive change. This involves all of us committing to full transparency and disclosure as a minimum. There’s often a fear around investing and greater openness will significantly help mitigate that.” HOW CAN EIS INVESTMENTS CONTINUE TO HELP DIVERSIFY CLIENT PORTFOLIOS? “EIS investments are high risk and aren’t appropriate for everyone, but for those suitable it does provide access to a non-correlated asset class, allows for additional diversification within an individual’s portfolio and offers potential for additional returns. This is alongside being a very effective tax planning vehicle.” WHAT SECTORS DO YOU SPECIALISE IN AND WHY ARE THESE IMPORTANT? “We’re agnostic in the sense that we don’t specialise in a specific sector, but there is a pattern in our portfolio in that they’re all tech-enabled businesses. These could be creative digital media firms, advanced manufacturing companies or life science businesses, but they all have a focus on technology in their process and that means they can scale quicker. “Generally, when we’re building our portfolio, we look to diversify across sector, business growth stage and geography.” ARE ADVISERS MORE RECEPTIVE TO THE SCHEMES? “We’ve definitely noticed a growing interest and receptiveness to EIS from advisers. There had been a shift towards VCT,
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but it isn’t one size fits all and EIS fills some gaps that VCT doesn’t. As with all advice, it’s important to match the solution to the needs and objectives of the investor.” ARE CLIENTS MORE SAVVY ABOUT EIS AND SEIS NOWADAYS? “There’s certainly still more education required for both investors and advisers, but we’ve noticed VCT and EIS being used increasingly as a planning solution by advisers. Advisers are now looking at venture capital as an interesting and attractive asset class particularly when combined with the numerous reliefs EIS offers investors.” ARE THERE MORE CLIENTS BECOMING INTERESTED IN THE SCHEMES? “Absolutely. They’re recognising the opportunity. We also encourage investors with specific skills which are of interest to the businesses we support to get involved. This is why we launched our Venture Partner programme. It allows those who are interested and have the required skill set to get really close to the businesses and provide professional support and fundamentally add real value to these businesses” HOW CAN ADVISERS CONTINUE TO EDUCATE THEIR CLIENTS ABOUT THE INVESTMENT OPPORTUNITIES IN EIS? “It comes down to fund managers and advisers working together to educate each other. Enhanced communication from the fund managers on the underlying businesses can only help advisers when talking to clients. This will help remove much of the mystery around the sector.”
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DOES THE INDUSTRY NEED TO DO MORE TO PROMOTE THE SCHEMES TO A WIDER INVESTOR BASE? “EIS and the tax efficient investing space is a great sector and one which has the opportunity to grow massively over the coming years, but there are areas which can be improved to generate a positive impact on the growth of the sector. A great deal of reticence comes about from poor and ineffective communication across many areas, not least fees and the level of detail of the investments made. Fears often come from the unknown and, as a fund manager, we have to change that.”
September 2020
situation that needs constant monitoring, something all investors are used to.” ARE THERE ANY CLOUDS ON THE HORIZON THAT MIGHT SPOIL THE PARTY? “Covid-19 has been an obvious cloud on the horizon. Although funding is likely to be down for the year as a whole, there are a lot of opportunities in the pipeline that give us plenty of reasons to be positive. There has been a noticeable positive shift in confidence in the last month or so. The whole market is in shock, but confidence is seeping back in.” GBI
Covid-19 has been an obvious cloud on the horizon. Although funding is likely to be down for the year as a whole, there are a lot of opportunities in the pipeline that give us plenty of reasons to be positive. There has been a noticeable positive shift in confidence in the last month or so.
HAS THE CONTINUED CONFUSION OVER BREXIT AFFECTED THE FUTURE OF EIS? “Most of our investments are focused on the UK market, but naturally everyone’s mindful of Brexit. It’s just another
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About Jonathan Prescott, Business Development Director at Praetura Ventures Jonathan has almost 25 years’ experience within the financial services sector. Having spent over 15 years at AJ Bell as Business Development Manager forging links with advisers across the country. Jonathan subsequently spent over 4 years at Octopus Investments, as Area Sales Director for the North, Scotland and Northern Ireland where he was responsible for a team of Business Development Managers and for implementation of the group’s sales strategy across the region. Jonathan has a thorough understanding of VCT, EIS and BR.
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September 2020
FAITH LIVE RSE DGE
TURNING A CLIENT
TESTIMONIAL INTO A CLINCHER
Communications consultant Faith Liversedge focuses on a zero-cost, minimal effort way of improving how your business is perceived.
I
t must have been said a thousand times now the pandemic and subsequent lockdown has inspired advisers and planners to change the way they run their businesses.
Existing plans to move into digital have been accelerated, and now clients and advisers alike are benefitting from these time-saving processes: portals with easy-to-read data, cashflow modelling they can access on their terms, and flexible communication.
measures? Are you communicating this in a clear, approachable, conversational tone? Now that you’ve implemented these changes, you don’t want the rest of your marketing collateral to let the side down: to seem inconsistent or old hat. WHERE TO START?
And while advisers may have been apprehensive at the thought of working remotely with clients, many have found they welcome it. Why interrupt your day when you can have a video call with your adviser at your convenience? No schlepping into town or aggro finding a parking spot.
You have a lot of areas to explore here: from your website to your emails, your stationery and brochures. I’m going to dive into the detail and home in on one area that can be a quick fix, that’s really important to get right. That’s client testimonials.
The only casualty is your carefully selected brand of coffee beans and organic shortbreads. Clients will have to supply their own.
That line from the client with the fake name and the cheesy grin about how you were always on time is not going to cut it anymore.
No drama.
And not getting this right is a missed opportunity.
But have you upped your game in all other areas? Are you telling people about these benefits and time-saving
Authentic testimonials prove what that you’ve said is true and are a powerful tool in your marketing kit. So
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Clients can tell an anodyne testimonial a mile off.
I FAmagazine.com
FAITH LIVE RSE DGE
whether you’re starting them from scratch or editing them from VouchedFor, here are some quick pointers: MAKE SURE THEY TELL A STORY Ideally what we’re looking for is a beginning, middle and end: what was the situation before, what problem was that causing and how did they feel afterwards once it was resolved? Compare a) with b) below and you’ll hopefully see what I mean: a) “The unfailing courtesy, friendliness and expertise we receive from ABC Wealth makes any contact a pleasant and positive experience.” b) “All I wanted was to leave work at 60, but I didn’t know if I could do it or not. I‘d ended up with a huge pile of stuff that frightened the pants off me. Geoff instantly took my anxiety away.” In the second example, we’re getting straight to the meat here, i.e. the transformation that you help clients to achieve. This has much more of an impact than the first, which is still nice, but could be about any service provider. EDIT THEM (BUT NOT TOO MUCH) You don’t want people to get bored reading these, so make sure they’re punchy. But don’t edit them so much that they lose their fizz; you don’t want to cut out the natural turns of phrase that make them so genuine. Also don’t be afraid to use them in the first person, directly as they’re spoken – this makes them much more immediate. VARY THE DETAILS Choose an even spread of testimonials that showcase the range of services you provide, so they’re not all talking
I FAmagazine.com
September 2020
about pension planning. Sprinkle these with aspects of your service such as accessibility, friendliness, efficiency etc. The time-saving aspects of working digitally, how convenient it was, how secure…seeing these themes repeated will make it more believable. DON’T HIDE THEM ALL ON ONE PAGE Spread the love and think about where you place your testimonials. The home page is your first port of call. But there are other key pages too, such as your contact page. Try and match the quote to the theme of the page – for example, if it’s on your “About us” page, make sure it covers you. If it’s on your “Contact us” page, make sure it’s about your speedy response. So there we have it. Using your testimonials strategically can add another layer of messaging that complements the claims you’ve made elsewhere on your website. They say that people need to be told something 7 times before they remember it, but testimonials are a great way to repeat positive themes without sounding boring. Ultimately, they can help prospects see what it’s really like to work with you and move them to take action. www.faithliversedge.com faith@faithliversedge.com About Faith Liversedge Faith Liversedge is an experienced communicator with a wealth of knowledge and understanding of the adviser profession. She was Marketing Manager at Nucleus for 5 years, creating innovative and award-winning campaigns. Before that she worked for Standard Life, Prudential and Royal London. In 2017 she set up her own consultancy to help forwardthinking financial advisers and planners to become more profitable through websites, communications and other laser-focused marketing techniques.
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M AGAZINE
GBI OPEN OFFERS A selection of tax efficient opportunities currently open for investment 36
I FAmagazine.com
Open Offers
SEIS Open
Close
Nov 2017
Evergreen
Target Raise: £3m per annum Minimum investment: £10,000
Deepbridge Innovation SEIS The Deepbridge Innovation SEIS represents an opportunity for private investors to participate in a selected portfolio of innovative seed stage innovation companies, taking advantage of the tax benefits available under the Seed Enterprise Investment Scheme. Providing seed investment to emerging technology-focused companies, the Deepbridge Innovation SEIS seeks to fund selected investee companies that possess an exciting new innovative approach to meet the existing and emerging requirements and demands of both corporate and consumer markets. The Deepbridge Investment Team has a proven track record of working with emerging companies to create value for shareholders through a hands-on investment methodology. The Deepbridge Innovation SEIS is a manager fee-free SEIS opportunity at the point of investment for subscriptions received by a financial adviser. Upfront and ongoing manager fees are paid by the Investee Companies, potentially allowing investors to enjoy up to 100% of SEIS tax benefits. Please see costs and fees section in the Information Memorandum for full details.
T. 01244 746000 E.Enquiries@deepbridgecapital.com www.deepbridgecapital.com
The availability of SEIS tax reliefs depends on individual circumstances, may be subject to change in future and depend on underlying companies invested in maintaining their qualifying status. Investment in unquoted companies carries high risks and investors could lose the total value of their investment. Investments in SEIS can be difficult to realise. Past performance is not a reliable indicator of future performance. This financial promotion, directed at investment professionals, has been approved by Enterprise Investment Partners LLP (“EIP”). Deepbridge Advisers Limited (FRN: 609786) is an Appointed Representative of EIP, which is authorised and regulated by the Financial Conduct Authority (FRN: 604439).
EIS Open
January 2013
Close
Evergreen
Deepbridge - Technology Growth EIS
Amount to be Raised: Uncapped
The Deepbridge Technology Growth EIS represents an opportunity for private investors to participate in a selected portfolio of innovative growth companies, taking advantage of the tax benefits available under the Enterprise Investment
Minimum Investment: £10,000
Scheme. The Deepbridge EIS focusses principally on three sectors: • Energy and resource innovation; • Medical technologies; • Business enterprise and other high growth IT-based technologies.
T. 01244 746000 E. Enquiries@deepbridgecapital.com www.deepbridgecapital.com
The Deepbridge Investment Team has a proven track record of working with emerging companies to create value for shareholders through a hands-on investment methodology. The Deepbridge Technology Growth EIS is a manager fee-free EIS opportunity at the point of investment for subscriptions received by a financial adviser. Upfront and ongoing manager fees are paid by the Investee Companies, potentially allowing investors to enjoy up to 100% of EIS tax benefits. Please see costs and fees section in the Information Memorandum for full details. The availability of EIS tax reliefs depends on individual circumstances, may be subject to change in future and depend on underlying companies invested in maintaining their qualifying status. Investment in unquoted companies carries high risks and investors could lose the total value of their investment. Investments in EIS can be difficult to realise. Past performance is not a reliable indicator of future performance. This financial promotion, directed at investment professionals, has been approved by Enterprise Investment Partners LLP (“EIP”). Deepbridge Advisers Limited (FRN: 609786) is an Appointed Representative of EIP, which is authorised and regulated by the Financial Conduct Authority (FRN: 604439).
SEIS Open
January 2016
Close
Evergreen
Target Raise: £3m per annum Minimum Investment: £10,000
The Deepbridge Life Sciences SEIS The Deepbridge Life Sciences SEIS represents an opportunity for private investors to participate in a selected portfolio of early stage life sciences companies, taking advantage of the tax benefits available under the Seed Enterprise Investment Scheme. Providing seed investment to emerging companies operating in the life sciences sector, the Deepbridge Life Sciences SEIS seeks to fund companies with exciting new technologies that aim to satisfy the needs of large and growing markets. The Deepbridge Investment Team has a proven track record of working with emerging companies to create value for shareholders through a hands-on investment methodology.
T. 01244 746000 E. Enquiries@deepbridgecapital.com www.deepbridgecapital.com
The Deepbridge Life Sciences SEIS is a manager fee-free SEIS opportunity at the point of investment for subscriptions received by a financial adviser. Upfront and ongoing manager fees are paid by the Investee Companies, potentially allowing investors to enjoy up to 100% of SEIS tax benefits. Please see costs and fees section in the Information Memorandum for full details. The availability of SEIS tax reliefs depends on individual circumstances, may be subject to change in future and depend on underlying companies invested in maintaining their qualifying status. Investment in unquoted companies carries high risks and investors could lose the total value of their investment. Investments in SEIS can be difficult to realise. Past performance is not a reliable indicator of future performance. This financial promotion, directed at investment professionals, has been approved by Enterprise Investment Partners LLP (“EIP”). Deepbridge Advisers Limited (FRN: 609786) is an Appointed Representative of EIP, which is authorised and regulated by the Financial Conduct Authority (FRN: 604439).
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EIS
SEIS
Open
Close
Evergreen
Evergreen
Amount to be Raised: £5m Minimum Investment: £15,000
Oxford Technology Combined SEIS and EIS Fund - “The Start-up Fund” Oxford Technology invests in high risk, high reward technology start-ups, in general within an hour’s drive of Oxford, and has been doing this since 1983. The latest fund, OT(S)EIS, made its first investment in 2012. By 5 April 2020, OT(S)EIS had completed 142 investments in 41 companies. In the most recent quarter, the tax free gain on the portfolio increased from £9.5m to £9.85m. On balance Covid created more value in the quarter than was destroyed, which is not to say that none of the investees suffered. The figures for the fund as a whole since its inception are as follows:
T. 01865 784466 E. info@oxfordtechnology.com www.oxfordtechnology.com
Gross amount invested by OT(S)EIS:
£7.16m
Cash back to investors via tax reliefs:
£2.75m
Net cost of these investments after tax reliefs:
£ 4.41m
Cash back from exits:
£ 0.24m
Fair value of remaining portfolio:
£14.25m
Total value: £17.25m Tax free gain (on paper only so far):
£9.85m
After tax losses on the three failures:
£0.0459m
*OT(S)EIS investors who made an SEIS investment in Animal Dynamics, an Oxford University spin-out at 14p per share (7p after SEIS tax relief) in Jun 2015, had the opportunity to exit in March 2019 at 97p per share (so 14x the after tax share price). About 50% of the shareholders opted to sell with 50% opting to remain – the company is doing very well. OT(S)EIS remains open for investment at any time. We average about one or two new investments per quarter, and investors in the fund receive their pro-rata share of these. The latest quarterly report, with a page of information on each investment is downloadable from from www.oxfordtechnology.com.
EIS Open
1st March 2020
Close
Evergreen
Amount to be Raised:
Seeking to raise up to £30m p.a. Minimum Investment: £25k
T. 0161 641 9475 E. ventures@praetura.co.uk www.praeturaventures.com
Praetura EIS Growth Fund The Praetura EIS Growth Fund will provide access to a unique selection of innovative growth companies that have an established proof-of-concept and commercial viability. It is intended for investors who want to achieve capital growth by investing in early-stage, unquoted companies which have the potential to increase in value significantly. Praetura Ventures is an active fund manager and works with driven management teams at the foundational stages of their business. Each of their portfolio businesses provide access to recurring, high margin revenue streams and have the opportunity for operational leverage once scaled. Areas of focus include; Creative, Digital & Tech, Financial, Professional & Business Services, Energy & Environment, Advanced Manufacturing and Health & Life Sciences. As an ‘Evergreen’ fund, the Praetura EIS Growth Fund will have two ‘soft closes’ per annum. The first of these will be on the 30th September. The Fund will invest into c. 8-10 promising young businesses and expect to fully deploy the capital within 6 months of each relevant close date. The fund is targeting a minimum return profile of 2x return on capital. This, combined with the tax reliefs available and Praetura’s track record, offers investors an attractive investment opportunity.
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Open Offers
EIS Open
Close
01.10.2018
Evergreen (quarterly closes in January, April, July, October)
Amount to be Raised: £10m Minimum Investment: £10,000
Great Point Ventures EIS Great Point Ventures EIS (“Fund”) presents UK tax payers with the opportunity to invest in EIS qualifying businesses operating in the booming UK creative industries. The Fund aims to seek out high growth companies and has a broad sub-sector approach designed to offer investors a degree of diversification across content creation, content distribution & marketing, production facilities & services and new media & technology. Investors will have a minimum of four companies in their portfolio and all companies must have received Advance Assurance from HMRC prior to funds being deployed. Why Great Point Ventures EIS?
Unrivalled sector experience - the Great Point team have a unique blend of financial, operational, commercial and investment management expertise specific to the media sector Strong opportunity pipeline - significant proprietary, sector specific deal flow offering genuine portfolio diversification Alignment of interest - the Fund offers a competitive fee structure ensuring Great Point’s interests are aligned with those of the investor T. 0203 873 0028 E. dperkins@greatpointmedia.com www.greatpointmedia.com
Growth focussed - the Fund’s target return is two times gross investment (excluding tax reliefs, inclusive of all costs and fees) Tax efficient - for every £1 subscribed 98p will be invested and therefore attract EIS tax reliefs (subject to personal circumstance)
EIS Open
March 2017
Close
Evergreen
Deepbridge Life Sciences EIS
Maximum Raise: Uncapped
The Deepbridge Life Sciences EIS represents an opportunity for private investors to participate in a selected portfolio of healthcare innovation, whilst taking advantage of the tax benefits available under the Enterprise Investment Scheme.
Minimum investment: £10,000
The Deepbridge Life Sciences EIS focuses principally, but not exclusively, on three sectors: • Biopharmaceuticals • Biotechnology • Medical Technology. The Deepbridge Investment Team has a proven track record of working with emerging companies to create value for shareholders through a hands-on investment methodology.
T. 01244 746000 E. Enquiries@deepbridgecapital.com www.deepbridgecapital.com
The Deepbridge Life Sciences EIS is a manager fee-free EIS opportunity at the point of investment for subscriptions received by a financial adviser. Upfront and ongoing manager fees are paid by the Investee Companies, potentially allowing investors to enjoy up to 100% of EIS tax benefits. Please see costs and fees section in the Information Memorandum for full details. The availability of EIS tax reliefs depends on individual circumstances, may be subject to change in future and depend on underlying companies invested in maintaining their qualifying status. Investment in unquoted companies carries high risks and investors could lose the total value of their investment. Investments in EIS can be difficult to realise. Past performance is not a reliable indicator of future performance. This financial promotion, directed at investment professionals, has been approved by Enterprise Investment Partners LLP (“EIP”). Deepbridge Advisers Limited (FRN: 609786) is an Appointed Representative of EIP, which is authorised and regulated by the Financial Conduct Authority (FRN: 604439).
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EIS
SEIS
Open
Close
Now
Multiple
Amount to be Raised: Evergreen
Minimum Investment: £10,000
T. 07768571271 E. pauls@worthcapital.uk worthcapital.uk
Start-Up Series Fund The Start-Up Series Fund is an evergreen EIS & SEIS service. Managed as an Alternative Investment Fund by Amersham Investment Management Limited, authorised and regulated by the FCA. The service is designed for eligible subscribers to be invested in selected winners of the Start-Up Series, a monthly competition organised by Worth Capital Limited and promoted by startsups.co.uk. The Fund invests in qualifying B2C or B2B companies with innovative products or services that can create new consumer behaviours in growth markets, with teams that demonstrate compelling marketing & communication skills and with a clear credible route to exit. •
EIS & SEIS investments - choose EIS, SEIS or both
•
Businesses selected by real world, commercial entrepreneurs with deep brand, marketing, retail & innovation expertise – worth capital
•
A unique approach to UK EIS & SEIS fund investing – a monthly competition which has attracted over 2,600 applications to date
•
Ongoing oversight from experienced investor directors - skilled in helping accelerate growth & reducing risk
•
Investments in ‘mini-portfolios’ of typically 3 or 4 businesses
•
Investments qualifying for attractive EIS & SEIS tax reliefs
Any investment in the Start-Up Series Fund places your capital at risk of total loss and will not be readily realisable. Tax treatment depends on individual circumstances and is subject to change. We recommend you take professional advice before investing.
EIS Open
Evergreen
Close
Evergreen
Amount to be Raised: Evergreen Minimum Investment: £15,000
Downing Ventures EIS Downing Ventures EIS invests in high risk, high potential return investment opportunities with a principal focus on early-stage UK technology companies, while also providing access to attractive EIS tax reliefs. The teams invests across a variety of sectors, with a focus on enterprise software, health technology and e-commerce. Each of these young, growing businesses will be high risk with a significant chance of failure. However, the following factors should help to manage risk: • Diversification: investments are estimated to be spread across a portfolio of 10 - 15, where possible in a variety of sectors.
T. 07946 117770 E. Bill@Downing.co.uk www.downing.co.uk
IHT Open
Evergreen
BR Close
Evergreen
Amount to be Raised: Evergreen Minimum Investment: £25,000
• Due diligence: a high number of opportunities will be investigated before each investment is made. In 2018, the team reviewed around 100 companies a month. It’s anticipated that investors will be given the opportunity to exit their investments between four and eight years from subscription.
Downing Estate Planning Service Downing Estate Planning Service (DEPS) aims to preserve investors’ capital by focusing on two sectors: businesses trading from freehold premises and/or energy businesses. We believe these are lower risk than other tax-efficient sectors. DEPS is designed to offer full IHT relief on subscriptions after two years, by investing in a portfolio of businesses that qualify for business relief. The service has been designed with the following key features: • Targets capital growth of 4% per annum over the medium term (this is a target and not guaranteed).
T. 07946 117770 E. Bill@Downing.co.uk www.downing.co.uk
• Receive distributions (paid on a quarterly, six-monthly or annual basis). • Access to capital twice a month, with no charges or penalties on exit (subject to liquidity, Downing’s discretion and 10 days’ notice). Additionally, we offer two insurance policies for this service: • Downside protection cover (at no additional cost): covers the first two years (before the investment obtains IHT relief). It covers a loss in value of up to 20% on initial net investment on death. • Life cover (optional – at an additional cost): mitigates the effect of IHT for the first two years before IHT relief begins. It covers 40% of the original gross investment (which would be payable to HMRC) upon death within the first two years.
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Open Offers
BR Open
Close
June 2005
n/a
Amount to be Raised: n/a
Minimum Investment: £25,000
T. 0800 316 2067 E. support@octopusinvestments.com
octopusinvestments.com
Octopus AIM Inheritance Tax Service Octopus AIM Inheritance Tax Service aims to help investors leave more wealth to their loved ones free from inheritance tax. The Octopus AIM Inheritance Tax Service invests in a diversified portfolio of smaller companies listed on the Alternative Investment Market (AIM) and targets growth. As we only select companies which meet the government-approved requirements for Business Property Relief (BPR), the shares should become exempt from inheritance tax after just two years, provided they are still held when the investor passes away. Our highly-experienced Quoted Smaller Companies team have been managing our Octopus AIM Inheritance Tax Service and ISA for the past 14 years. They will create a portfolio of AIM-listed shares for the investor, selecting companies that offer growth potential and that should qualify for BPR. Holdings are monitored on a day-to-day basis, with the team making investment decisions. As it’s an investment, investors can make top-ups to or withdrawals from their portfolio by selling shares whenever they want to. We can usually sell shares within a week; however, in some instances it could take significantly longer. The Octopus AIM Inheritance Tax Service is also available in an ISA wrapper.
BR Open
Close
2007
n/a
Amount to be Raised: n/a
Minimum Investment: £25,000
Octopus Inheritance Tax Service Since 2007, the Octopus Inheritance Tax Service has given investors the opportunity to invest in the shares of companies making a positive contribution to the UK’s economic growth. The companies are unquoted, which means their shares do not trade on any stock exchange. We select companies that we expect to qualify for Business Property Relief (BPR). This is a government approved relief from inheritance tax. Provided the investment has been held for at least two years at the time of death, it can be left to their beneficiaries free of inheritance tax. Octopus Inheritance Tax Service is a Discretionary Fund Management Service. The service aims to deliver steady investment growth of 3% per year on average over the lifetime of an investment. The service is flexible enough to adapt to the investors needs, should their circumstances change in later life, subject to liquidity.
T. 0800 316 2067 E. support@octopusinvestments.com
octopusinvestments.com
VCT Open
20 August 2020 Close
Each VCT independently has the right to close at the Board’s discretion, alternatively when the fundraise is full, or 1 year from fundraise open date. Amount to be Raised: £20 million, with a £10 million overallotment facility
Octopus AIM VCTs Octopus manages two AIM VCTs. Each offers a tax-efficient way to invest in diverse portfolios of emerging and established companies judged to have strong growth potential. Octopus AIM VCT was launched in 1997 and Octopus AIM VCT 2 in 2005. Both VCTs have been making investments alongside each other, in proportion to the size of each VCT, since 2010. Each benefits from holding a broad spectrum of VCT-qualifying UK smaller companies. Although new investments remain small enough to qualify for VCT funding, the established nature of the Octopus AIM VCTs means that they feature a large number of maturing AIM-listed businesses. This means investors can instantly benefit from owning established portfolios of around 80 AIMlisted companies, which we believe will continue to deliver sales growth and generate profits.
Minimum Investment: £5,000
T. 0800 316 2067 E. support@octopusinvestments.com
octopusinvestments.com
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IHT Open
Close
Evergreen
Evergreen
Amount to be Raised: Evergreen Minimum Investment:
£100,000
Downing AIM ISA (DISA) Downing AIM ISA (DISA) gives investors the opportunity to invest in a portfolio of AIMquoted companies, combining IHT relief (after two years) with ISA tax benefits, by investing in companies that qualify for business relief. We aim to manage risk by spreading funds across at least 20 companies from different sectors. Other key features: • Downside protection cover (at no additional cost): insurance policy that covers the first two years (before the investment obtains IHT relief.) The policy covers 20% of any net loss in value of death under the ages of 90 years.
T. 07946 117770 E. Bill@Downing.co.uk www.downing.co.uk
• Ownership and control: allows investors to retain full ownership of the investments. • Capital growth: generate capital growth from the portfolio of investments. Companies are selected based on analysis of their operational business, longevity of earnings and alignment between management and equity shareholders. • Access: to enable investors to withdraw capital from their portfolio at any time, subject to liquidity.
IHT Open
Evergreen
Close
Evergreen
Amount to be Raised: Evergreen Minimum Investment:
£100,000
Downing AIM Estate Planning Service (DAEPS) Downing AIM Estate Planning Service (DAEPS) enables investors to own a portfolio of AIMlisted shares and is designed to offer full IHT relief on subscriptions after two years, by investing in companies that qualify for business relief. We aim to manage risk by spreading funds across at least 20 companies from different sectors on the AIM market. Other key features:
T. 07946 117770 E. Bill@Downing.co.uk www.downing.co.uk
• Downside protection cover (at no additional cost): an insurance policy that covers the first two years (before the investment obtains IHT relief). The policy covers 20% of any net loss in value on death under the ages of 90 years. • Ownership and control: allow investors to retain full ownership of the investments. • Capital growth: companies will be selected based on analysis on operational business, longevity of earning and alignment between management and equity shareholders. • Access: enable investors to withdraw capital from their portfolio at any time, subject to liquidity and 10 days’ notice.
EIS Open
April 2017
SEIS Close
Evergreen
Amount to be Raised:
Up to £25,000,000
Minimum Investment: £10,000
T. 020 7071 3945 E. enquiries@growthinvest.com www.growthinvest.com
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GrowthInvest Portfolio Service The GrowthInvest Portfolio Service is a discretionary managed EIS & SEIS portfolio service that leverages the experience and expertise of the GrowthInvest investment team to select a diversified portfolio of some of the most promising companies that have passed through GrowthInvest platform due diligence process. GrowthInvest is an independent platform, which provides access to tax efficient investments for the clients of UK financial advisers and wealth managers and angel investors. The platform brings the advantages of early stage investing to a wider audience of investors and advisers, who are able to benefit from the potentially higher returns these investments can offer and tax efficiency through reclaimed income tax and reduced capital gains liabilities via government approved schemes, such as EIS and VCTs. Clients can invest in three different strategies in the GrowthInvest Portfolio Service. The first will target investee companies which qualify for SEIS reliefs only; these companies tend to be the highest risk that are often developing their minimum viable product and will be pre-revenue businesses. The second strategy will target investee companies which qualify for EIS reliefs only, i.e. those businesses that are already trading and require equity capital to expand their operations. The third strategy is a mixed investment policy which will target investee companies which qualify for both SEIS and EIS relief and offering a more moderate level of risk. The GrowthInvest Portfolio Service aims to return to clients twice the initial invested amount (not including tax reliefs) and is aiming to exit investments and return capital three to seven years after the initial investment into the Portfolio Service.
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Open Offers
EIS Open
Close
July 2019
June 2020
Amount to be Raised: £20m Minimum Investment: £50,000
Calculus EIS Fund Pioneers of tax efficient investing, Calculus Capital created the UK’s first approved EIS Fund in 1999. Our 20+ year track record of investing in growing UK Companies assures investors of our ability to make sensible investments capable of delivering excellent returns at every stage of the economic cycle. Calculus has won multiple awards, EISA’s ‘Fund manager of the Year’ five times, ‘Best EIS Investment Manager’ at the Growth Investor Awards and most recently EISA’s Outstanding Contribution to EIS Investment Management by Fund Manager’ in 2019. Calculus are recognised as having an incredibly robust investment process and an active portfolio management style – which has led to an impressive track record of successful exits. The Calculus EIS Fund focuses on entrepreneurial companies with growth potential, across a diverse range of sectors. An investor can expect a portfolio of at least 6 companies with the following characteristics: • The ability to achieve our target IRR of 20% • Experienced management teams
T. 020 7493 4940 E. info@calculuscapital.com www.calculuscapital.com
• Successful sales of proven products or services • Profits or a clear path to profitability • Clear route to exit Calculus’ investment policy is exit led, with a key focus on delivering strong returns to investors. The target 18 month deployment commences after the relevant closing date. Calculus value their reputation for client service as much as their investment record, and are focused on building long standing relationships with both clients and advisers. Please get in touch to find out more on 020 7493 4940 or info@calculuscapital.com.
VCT Open
September 2019
Close August 2020
Amount to be Raised: £10m Minimum Investment: £5,000
Calculus VCT Calculus Capital has a strong track record for investing in entrepreneurial, unquoted UK companies. Our experienced investment team and thorough investment process have produced impressive dividend performance and exit returns for investors. By co-investing in selected entrepreneurial companies through both VCT and EIS, Calculus are able to choose larger companies and bigger deals. The Calculus VCT has the following characteristics: • Targets an annual dividend of 4.5% of NAV • Income tax relief of 30%, tax free capitalgains and dividends • Diversified portfolio, targeting 30+ qualifying companies • Monthly standing order and Dividend Reinvestment Scheme options available • Target 5% discount in respect to share buyback The top up offer will be used to invest in new companies with grwoth potential and provide further funding to a number of portfolio companies.
T. 020 7493 4940 E. info@calculuscapital.com www.calculuscapital.com
EIS Open
Evergreen
Close
Evergreen
Amount to be Raised: N/A Minimum Investment: £25,000
Calculus value their reputation for client service as much as their investment record, and are focused on building long standing relationships with both clients and advisers. Please get in touch to find out more on 020 7493 4940 or info@calculuscapital.com.
Vala EIS Portfolio The Vala EIS Portfolio invests in companies selected and mentored by a group of serial entrepreneurs, with a long track record of creating, building and successfully selling companies. We focus our investments on the sectors we know best, where our expertise and networks can make a valuable impact on the progress of our portfolio companies. This includes digital media and entertainment, engineering, fintech, leisure, and food & beverages. Investors will acquire shares in 6-10 companies, with an overall target return of 2x and expected holding period of 3-5+ years. Portfolios usually include both pre-revenue and post-revenue companies, and new and follow-on investments.
T. 0203 951 0590 E. info@valacap.com www.valacap.com
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We charge no initial or annual management fees to investors. Our costs are covered by a 6% fee charged to investee companies, and we earn a performance fee of 20% of profits from successful exits. Investments are completed in tranches, so subscriptions can be quickly deployed and investors can learn about the companies we plan to invest in before subscribing. Our next tranche is scheduled for the 30th June 2020 for immediate deployment, subject to a minimum fundraise of £1m. Corresponding EIS3 certificates for this tranche are expected to be available within 3 months.
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EIS Open
Close
June 2019
June 2020
Amount to be Raised: £20m Minimum Investment: £10,000
UK Creative Content EIS Fund The UK Creative Content EIS Fund, in association with BFI, will invest in a new generation of EIS qualifying UK creative content companies within a diversified growth focused portfolio. Calculus Capital is the fund manager bringing a wealth of experience investing in growing UK companies over the past 20 years. Stargrove Pictures is acting as strategic adviser for the Fund, having overseen £1bn+ of investment in the sector. Together, Calculus and Stargrove create a ‘best in class’ combination which the BFI selected after a rigorous selection process. UK content companies already have an established track record of creating high quality content watched by millions worldwide. Technology is changing the way we consume creative content, evidenced by the significant growth of subscription video-on-demand (SVOD) services such as Amazon and Netflix, who are reported to be spending almost $15bn on content. Together with the more traditional broadcasters and distributors, this has created a highly competitive landscape and an ever-increasing global demand for exciting original content. The Fund is well placed to capitalise on this unprecedented growth in demand.
T. 020 7493 4940 E. info@calculuscapital.com www.creativecontenteis.co.uk
An investor can expect a portfolio of at least 6 companies with the following characteristics: • Proven experience in developing and producing commercially appealing projects • Existing development slate • Excellent talent connections • Commitment to diversified multi-platform strategy • Experienced entrepreneurial management teams The Fund is targeting deployment over 15 months with a target return of 2x on monies invested. Calculus value their reputation for client service as much as their investment record, and are focused on building long standing relationships with both clients and advisers. Please get in touch to find out more on 020 7493 4940 or info@calculuscapital.com.
EIS Open 2012
Close Evergreen
Amount to be Raised: No maximum
Minimum Investment: £20,000
Par Syndicate EIS Fund Par Equity is an award-winning EIS Fund Manager, investing in innovative, high growth potential technology businesses across the UK. We harness the expertise and contacts of our Par Syndicate and wider investor network to create a distinctive, operationally focused investment model that benefits both investors and entrepreneurs. Our investor network provides unrivalled access to the right people at the right time, who enhance our deal flow, improve our due diligence, fine tune business models and guide the entrepreneurs through to exit. Entrepreneurs recognise Par Equity as an added value investor, which is reflected in our strong flow of investment opportunities. Strategy for the Fund: • Focused on early stage technology companies with high quality management teams addressing global markets
T. 0131 523 1057 E. pauline.cassie@parequity.com www.parequity.com
• Co-investing with experienced angel investors who add value to portfolio companies at each stage through to exit • Target portfolio of 7 - 8 investments • Target deployment within 12 months • Expected holding period of 5 - 7 years with a benchmark IRR of 15% Experience and track record of the Fund Manager: • Award-winning investor • 10-year track record • 53 investments made • £128m deployed • 14 realisations achieved: • 3.2x multiple (before tax relief) • 26% blended IRR • 3.6-year average holding period
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Open Offers
EIS Open
Close
15th Dec 2014
Evergreen
Target Raise: Evergreen Minimum investment: £15,000
Committed Capital Growth EIS Fund Committed Capital is an investment management and corporate advisory business founded in 2001. • Investment Methodology - Focus on maximizing growth in companies with the injection of human capital to assist leading entrepreneurs develop their business to its full potential. • Investment Strategy - Post-revenue (£1m+), growth stage UK based technology companies across a number of sectors. Companies must have multiple client contracts in place, solid pipeline of sales, proven management and robust and demonstratable growth strategy. • Diversification - Investors will have between 8-12 companies in their portfolio with HMRC advance assurance in place.
T. 020 7529 1365 E. glen.stewart@committedcapital.co.uk www.committedcapital.co.uk
• Deployment • Target return
- Funds typically deployed within 6 months.
• Minimum investment
- 2-3x ROI*
- £15,000
Track record Since 2001 the team have achieved an average 2.4x ROI* with an average holding period of 4 years. The fund has deployed £54.7m (as at April 2020), had two profitable partial exits and most recently a whole exit that completed on 31 July 2019 with a 2.71xROI*. Outside of the current funds, Committed Capital has deployed £36.8m across 18 other EIS qualifying companies and has exited all of these achieving 17 profitable exits with just 1 partial failure. * - (excluding any tax reliefs)
EIS Open
Close
Now
Evergreen
Amount to be Raised: N/A Minimum Investment: £5,000
Access EIS Access EIS tracks performance data of over 1,000 active startup investors. It then selects and co-invests with some of the best-performing “super angels” with the aim of replicating their collective success. The fund aims to diversify your investment across at least 50 super-angel-backed startups to minimise risk and capture as many potential “blockbusters” as possible. As an EIS fund, eligible investors could benefit from generous tax relief on their investment into Access EIS. SyndicateRoom’s dashboard aims to make light work of EIS paperwork with easily downloadable summaries that can simply be attached to an HMRC self-assessment tax return.
T. 01223 478 558 E. contactus@syndicateroom.com www.syndicateroom.com
EIS Open
Evergreen
Close
Evergreen
Amount to be Raised: Uncapped Minimum Investment: £20,000
With investments, your capital is at risk. SyndicateRoom and Access EIS are targeted exclusively at sophisticated investors who understand these risks. This message has been approved as a financial promotion by Syndicate Room Ltd, which is authorised and regulated by the Financial Conduct Authority (No. 613021). It is not a recommendation to invest and does not constitute advice. Tax relief depends on an individual’s circumstances and may change in the future. If unsure, seek advice. Syndicate Room Ltd is registered in England and Wales. Number 07697935. Registered office: The Pitt Building, Trumpington Street, Cambridge CB2 1RP
Symvan Capital Symvan Capital has an established and award-winning track record of growth-oriented investing. We invest in scalable and disruptive technology businesses – companies that seek to impact and change established business models or industries. We look for businesses with a unique proposition and the potential to deliver ten times our investment. Symvan scours the market to find founders with strong teams who have vision, drive and flexibility to deliver results within reasonable time frames. We fund, mentor and support them through to exit. We provide both management and expert advice from our own team and from our network.
T. 020 3011 5097 E. ml@symvancapital.com www.symvancapital.com
There are zero upfront or ongoing charges to the investor. We charge the investee companies instead. Therefore, investors can claim 100% of the EIS tax reliefs. The only fee Symvan eventually charges investors is a 20% performance fee, which is dependent on a successful exit. Consequently, Symvan is very exit focussed. We typically add no more than five to seven new companies to the portfolio per year, in line with our “deeper not wider” investment philosophy. We have £9.5 million remaining capacity for deployment pre 5th April 2020, targeted across up to 12 companies. Guaranteed carry-back to 18/19 for subscriptions received prior to 5th April 2020.
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EIS Open
Close
Evergreen
Amount to be Raised:
£20 million
Minimum Investment:
£20,000 (£15k if both spouses)
T. 0207 927 7465 E. Enquiries@endven.com www.endven.com
EIS
SEIS
Open
Open
Evergreen
Evergreen
Amount to be Raised:
Open Ended
Minimum Investment: £10,000
Endeavour Ventures Managed Portfolio Service Building on our successful track record in growth EIS investing since 2005, Endeavour’s new Portfolio Service has been designed to provide many of the advantages of a managed EIS fund, but with better flexibility and no initial or annual fees for investors. Total fees are kept low, and clients receive 100% EIS relief on the money we invest. Endeavour builds each client a diversified portfolio of companies across technology sectors that we know and understand. We focus on enterprise software, property and legal technology related platforms, cloud-based software delivery, workforce management and optimisation, data management platforms, and we have developed expertise in payments, FX and in fintech. We also diversify across stages of development, we seek out companies that are showing increasing customer traction, and many of our investments are into maturing businesses wishing to expand. The number of investments held by a client increases over several years tax years to give optimum diversification. The objective is to enable clients to consistently benefit from EIS reliefs against tight deadlines while providing a base case return on capital of 1.6x to 2x over a 5 year period. This is against Endeavour’s 12 year audited cash to cash track record of 6.1x cost. Our investment team understands growth investment complexities and timeframes. We have the right combination of skills for due diligence, investing, assisting and monitoring portfolio companies, and for exiting investments. We know that growth investing requires resilience over a number of years, and therefore forge strong partnerships between management teams and our own team members, that endures throughout the course of the investment cycle and on to exit. The most recent portfolio exit was Blue Prism Group Plc, providing Endeavour’s investors with a return of 150x and securing the EISA’s 2017 Best Exit of the Year.
Nova Growth Capital At Nova, we believe that fund management can be done differently. Our approach to fund management affords the investor access to tech enabled, growth-focused businesses at the earliest stages of a company life cycle, all whilst aiming to reduce the risk associated with investing in startups. We do this by aiming to reduce the 5 most common startup mistakes. Our truly proprietary deal flow is provided by our cofoundry business, helping founders solve real problems felt by sizeable markets. Our cofoundry then employs over 100 people to consult, build and grow our portfolio companies, applying our investors capital into an operating model rather than an investment model. The result; our portfolio value has grown in excess of 80% year on year for 10 years. • Potential returns of £5.70 in the £1 if portfolio growth continues at 83% • Target returns of £2.18 in the £1 based on targeted 20% year on year portfolio growth
T. 0151 318 0761 E. fund@wearenova.co.uk www.wearenova.co.uk
VCT Open
October 2019
Close 30th October 2020
• A minimum return of 58p in the £1 in the unlikely event that every company in the cohort fails • A 0.2% chance of every company in the cohort failing Our senior team are a balanced mix between seasoned investors, start-up practitioners and successful entrepreneurs. The fund aims to deploy quarterly into 10 companies through a mixture of SEIS and follow on EIS investment, further reducing risk by giving a diversified spread of circa 30 high growth, tech enabled companies per year
Blackfinch Spring Venture Capital Trust
Amount to be Raised: £20 million
The Blackfinch Spring VCT brings clients the chance to further diversify their portfolios through exposure to the technology sector. This is alongside access to VCT tax benefits including 30% income tax relief and the prospect of tax-free dividends.
Minimum Investment: £3,000
The VCT plans to invest in a diversified range of early stage technology firms operating across sectors. The focus is on firms at a growth-stage of development, bringing a higher chance of success. Investee firms will be sourced from high-quality new deal flow. The VCT will also make follow-on investments in the highest-performing firms emerging from the Blackfinch Ventures EIS Portfolios. By 2024 we plan to return the profits to investors as tax-free dividends of 5% per annum.
ordinary shares and over-allotment facility for a further £10 million.
T. 01452 717070 E. enquiries@blackfinch.com www.blackfinch.com/ventures/ springvct
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Open Offers
EIS Open
Close
Evergreen
Evergreen
Amount to be Raised:
c. £30m
Minimum Investment:
£25,000
MMC Ventures EIS Fund Invest in the UK’s fastest growing technology companies • Performance: In the last 24 months, MMC has delivered five positive exits returning an average of 2.7x to investors. • Experience: MMC has been backing the UK’s fastest growing tech companies for 19 years, making them one of the most experienced managers in the EIS space. • Commitment: More than £11 million has been invested by the MMC founders and team alongside its investors, on the same terms.
T. 0207 361 0212 E. invest@mmcventures.com www.mmcventures.com
EIS Open
1st November 2019
Close 31st March for investment requiring deployment by the 5th april for carryback; otherwise the fund will remian open with depoloyment on a monthly basis
Amount to be Raised:
£3,500,000
Minimum Investment:
£10,000
Investors in MMC’s EIS Fund can expect deployment over a 12-18 month period in a diversified portfolio of c. 10 companies. The Fund targets a 2-3x return over a 4-8 year holding period.
ARIE Capital Technology EIS Fund ARIE Capital began investing in technology companies in 2016, following on from two early technology investments that its parent company, Taurus Asset Finance, made in 2013. Since then, our company has made fifteen technology-based investments. We are proud of our vibrant and diverse portfolio that continues to increase exponentially in valuation, with two exits already made. Following these principles, we have now assembled a dedicated team to focus on the development of EIS opportunities and to cultivate exciting new technologies. We are partnering with companies and founders that are well known to ARIE Capital and have already shown considerable growth and development. We look to nurture these companies so that they will be ready for further funding in the future (from ourselves or other investors), which will be to the benefit of all concerned. With our globally-minded structure and experienced team, ARIE Capital offers you the opportunity to invest in companies that might not come your way via the traditional routes. In this way, we present to you a fund that is full of unique investment opportunities that are both exciting and with significant upside potential.
T. 020 7087 3570 E. martin@arietech.co.uk www.ariecapitaleis.com
EIS/SEIS Open January 2019
Close Quarterly Closings
Amount to be Raised: £10m
Minimum Investment: £25,000
E. invest@o2h.com www.o2hventures.com
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The o2h therapeutics and AI fund The Britain’s first S/EIS investment fund backing biotech therapeutic and related AI opportunities has made 10 Investments into biotech therapeutics and AI companies since its launch at the beginning of 2019. o2h ventures look for companies with great science that have potential to be developed towards a collaboration or exit. It is fund manager’s belief that what happened in Tech over the last 10 years is being replicated in Biotech with large pharma seeking to collaborate and acquire innovative small biotech companies. o2h ventures are also privileged to invest into a sector in which they can not just make a commercial return but also work on projects that benefit society. The team at o2h group have access to some of the most exciting ideas through its live grass roots working relationships fostered with entrepreneurs and scientists over many years giving it far earlier access than competitors to the most promising companies. In 2019, the o2h therapeutics and AI fund was nominated as the Best New Entrant in the Tax Efficiency Award by Investment Week and was the finalist for Impact Awards in the 25th Year EISA Awards. Sunil Shah, the fund manager, is on the Board of the Biotech Industry Association, Cambridge Angels and received the 2019 UKBAA Angel of the Year award.
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CAREER OPPORTUNITIES Position: Financial Advisor Job Ref: 59742 Location: SOUTH WALES
Salary: £35,000 - £50,000
The Opportunity The opportunity here is for a Financial Advisor, with a professional and level-headed approach to come in and help take on a number of the company’s client's moving forward, alongside building and growing this bank further. This opportunity would be suitable for any Level 4 Diploma qualified professionals, whether you be an existing IFA with a strong book of business, or a newly qualified Adviser looking to work in a highly professional environment. In this role, as mentioned, you will have the chance to work with a number of the firms existing connections, with the potential for leads to be provided via referrals and professional introducers, with a highly rewarding Salary and Benefits package.
What’s needed for me to be considered? •
Hold previous experience within an IFA / Financial Planning Practice
•
Must be qualified to a minimum industry standard of Level 4 Diploma Qualified
•
Previous experience dealing with High Net Worth Clients desirable but not essential
•
A strong understanding of Pensions and Investment products advantageous
Position: Experienced Paraplanner Job Ref: 59524 Location: MANCHESTER
Salary: £30,000 - £40,000
The opportunity for an experienced Paraplanner to join a fantastic Financial Services firm who focus on providing a high quality financial planning and investment management service.
The Opportunity During a period of key expansion, our client is looking for an experienced Paraplanner to support the successful Financial Planners of the business. The firm has the flexibility to mould the perfect opportunity around each person’s specific skillset, so the role can be tailored to exactly what you want. You will have the opportunity to prepare suitability letters, reports and recommendations and provide technical support to complex client queries. You will be working in a strong team-focused environment where you can develop your career within a prestigious firm.
What’s needed to be considered? In order to be considered for this unique opportunity, candidates need to have – •
Level 4 Diploma qualified or working towards this
•
Previous experience within a fast-paced IFA Practice
•
High level of analytical capability and good communication skills
Position: Financial Planning Administrator Job Ref: 59571 Location: SALE
Salary: £18,000 - £25,000
The opportunity for a financial planning administrator to join a well-established financial services practice which provides a highly personalised financial planning and investment management service.
The Opportunity During a period of growth, our client is looking for someone to provide high quality technical administration and analytical support to the successful financial planners of the business. The firm has the flexibility to mould the perfect opportunity around each person’s specific skillset, so the role can be tailored to exactly what you want. You will have the opportunity to work in a supportive team environment where progression is strongly supported.
What’s needed to be considered? In order to be considered for this unique opportunity, candidates need to have – •
Previous experience within a financial planning or insurance roles
•
Any financial services qualifications are desired
•
Professional communication manner, both written and verbally
Position: Practice Manager Job Ref: 59487 Location: CARLISLE
Salary: £25,000 - £35,000
The opportunity for a Practice Manager to join a well-established Financial Services Practice which provides a highly personalised financial planning and investment management service.
The Opportunity Ensuring that practical and operation aspects of the business are properly attended to in a timely and pragmatic manner. Providing an efficient and timely HR service to the management in order to ensure staffing is aligned with the key aims of the organisation. Maintaining office services by organising office operations and procedures, to include the Mortgage Administration, IT, Health and Safety and Telephones. Handling general day to day queries to ensure they are dealt with efficiently and in a timely manner. Managing and develop the website, social media, marketing and branding in line with the company’s objectives. Establishing and maintain robust procedures for the retention, protection, retrieval, transfer and disposal of in line with legislative requirements.
What’s needed to be considered? In order to be considered for this unique opportunity, candidates need to have – •
Previous experience within a Financial Planning role
• Knowledge and experience of regulatory frameworks • Delegation skills
Position: Experienced Paraplanner Job Ref: 59515 Location: CHESTER
Salary: £30,000 - £40,000
We are currently recruiting for an experienced Paraplanner on behalf of a firm of Independent Financial Advisors based in Chester. Ideally you will be Diploma qualified or close to it, and will be responsible for assisting the IFAs within the business. You will be given the opportunity to implement your own ideas and grow your own team.
Duties and Responsibilities: •
Ascertain that procedures followed by the company are Compliant and follow the guidelines set out by the FCA
•
Process and deliver Suitability reports for 2 IFAs
•
Provide recommendations to clients on Investments, Pensions and Mortgages based on your own research and to be able to support these recommendations with a coherent explanation
•
Work effectively autonomously or as part of a team
•
Respond efficiently and effectively to requests from Company advisers and Management
•
Assist in analytic work, including cash flow forecasting and investment analysis
•
Use of financial planning software tools
•
Develop productive working relationships with colleagues and clients
Skills •
Previous experience within an IFA practice environment
•
Ideally you will be Diploma Qualified in Financial Planning or will have made significant progress towards this qualification
•
Good technical knowledge of Pensions, Investments and Mortgages
•
Knowledge and practical experience in the application of the rules of the FSA/FCA
Position: Financial Planning Administrator Job Ref: 59486 Location: LEEDS
Salary: £20,000 - £30,000
The opportunity for a Financial Planning Administrator to join a well-established Financial Services Practice which provides a highly personalised financial planning and investment management service.
The Opportunity During a period of growth, our client is looking for someone to provide high quality technical administration and analytical support to the successful Financial Planners of the business. The firm has the flexibility to mould the perfect opportunity around each person’s specific skillset, so the role can be tailored to exactly what you want. You will have the opportunity to work in a supportive team environment where progression is strongly supported.
What’s needed to be considered In order to be considered for this unique opportunity, candidates need to have – •
Previous experience within a Financial Planning or Insurance role
•
Any Financial Services qualifications are desired
•
Professional communication manner, both written and verbally
Position: Technical Paraplanner Job Ref: 59600 Location: PONTYPRIDD
Salary: £30,000 - £45,000
There is a fantastic opportunity here to for a successful Technical Paraplanner to join an award winning practice, in the beautiful area of Pontypridd. Our Client is a growing practice with a fantastic industry name, who focus on providing a highly personalised financial planning service, ensuring the Client is at the heart of everything they do.
The Opportunity During a period of key expansion, our client is looking for a technical Paraplanner to support the successful Financial Planners of the business. The firm has the flexibility to mould the perfect opportunity around each person’s specific skill set, so the role can be tailored to exactly what you want. You will have the opportunity to work in a supportive team environment with a great office atmosphere, where progression is strongly supported. For the right candidate, there is the chance here to gain CF30 sign off, and attend a number of Client Meetings, with the exciting opportunity of transitioning in to Financial Advice yourself one day…
What’s needed to be considered? In order to be considered for this unique opportunity, candidates need to have – •
Minimum Level 4 Diploma qualified and working towards Chartered status
•
High level of analytical capability and good communication skills
•
•
Previous experience within a fast-paced IFA Practice
Good Pensions & Invetsments product knowledge
Position: Financial Advisor Job Ref: 59569 Location: MANCHESTER
Salary: £35,000 - £50,000
Our Client is a bespoke, Chartered independent Financial Planners, who is looking to bring in new talent,. Our client is now looking to expand by adding a new member to the Financial Planning team. Our client's main focus is on providing bespoke advice to High Net Worth clients, ensuring all clients receive an exceptional level of service.
The Opportunity The opportunity here is for a Financial Advisor, with a professional and level-headed approach to come in and help provide advice to the clients generated through the firms lead source. This opportunity would be suitable for any Level 4 Diploma qualified professionals, whether you be an existing IFA with a strong book of business, or a newly qualified Adviser looking to work in a highly professional environment.
What’s needed for me to be considered? •
Hold previous experience within an IFA / Financial Planning Practice
•
Must be qualified to a minimum industry standard of Level 4 Diploma Qualified
•
Previous experience dealing with High Net Worth Clients desirable but not essential
•
A strong understanding of Pensions and Investment products advantageous
Dan Gratton - Specialist Financial Planning Recruiter I have been recruiting within the financial planning field for just over 2 years now, largely specialising within the placement and recruitment of financial planners and senior back office roles. Prior to this, I was working in the industry for 5 years, as an Associate Financial Planner, so like to think I am somewhat knowledgeable on both the industry and those in it! A lot of people believe that the job hunt on the build up to Christmas can be quite slow, however we have found quite the opposite, with last December being our busiest month to date. It seems companies are very keen to get their recruitment needs in order, prior to the new year, so there may never be a better time for you to start your search. You will have seen above that we have a number of opportunities that we are working on at present and many more on our website should you be open to new opportunities. Furthermore, should you just wish for further information on the IFA job market at present, opportunities locally or industry information on qualifications etc, please do not hesitate to be in contact. You can reach me on 0117 922 1771 or feel free to email me at dan.gratton@heatrecruitment.co.uk.
What’s next? If you are interested in any of the above opportunities, please contact us directly. If suitable, one of our specialist consultants will be in contact with you to discuss the opportunity in detail prior to submitting your Curriculum Vitae to the client. During this discussion, we will aim to identify your specific skills and motivations and, where appropriate, can also recommend other relevant opportunities to you that match your requirements.
And finally… If these specific vacancies are not exactly what you are looking for, please contact us to discuss other opportunities we may be recruiting for that aren’t necessarily advertised.
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Visit the Heat Recruitment website for more details of these and hundreds of other jobs too www.heatrecruitment.co.uk
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