The show must go on | IFAM97/GBI26 | April 2021

For today’s discerning financial and investment professional

A special combined issue with MAGAZINE

The show must go on Intergenerational planning.

We talk to Prudential's head of technical services

Supporting clients in vulnerable circumstances

by Edward Grant

April 2021

ANALYSIS

REVIEWS

Special feature on ESG and impact investing with M&G Investments

IFAM97/GBI26

COMMENT

INSIGHT

CONTE NTS

CONTRIBUTORS

April 2021

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Welcome

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Supporting clients in vulnerable circumstances

Faith Liversedge

Edward Grant examines steps advisers can take to support clients’ needs

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How to get the most out of your introducers, today Practical tips from Faith Liversedge on boosting success with introducer relationships in these days of remote working

Paul Wilson Chairman, Clifton Media Lab paul.wilson@cliftonmedialab.com

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Family Wealth Unlocked IFA Magazine talks to Les Cameron about Prudential’s intergenerational planning report

14 Peter Wilson Online Writer, IFA Magazine peter.wilson@ifamagazine.com

The 4Es of Excellence™ Michelle Hoskin highlights why excellence is the only standard to strive for and gives practical tips on how you can achieve it

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Why financial advice is personal The Openwork Partnership’s Claire Oldstein shares her experience of going through a major rebrand during the Covid pandemic

18 Sue Whitbread Editor sue.whitbread@ ifamagazine.com

The coming decade for climate solutions Randeep Somel, Fund Manager, M&G Climate Solutions Fund highlights powerful drivers of change in the climate crisis battle

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A positive charge

Alex Sullivan Publishing Director alex.sullivan @ ifamagazine.com

Kim Wonnacott Head of Technical Sales and Marketing kim.wonnacott@ifamagazine.com

M&G’s Ben Constable-Maxwell talks to IFA Magazine about how and why ESG integration and impact investing are underpinning investment strategies

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GBI Magazine Issue 26 Tomorrow is now

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Better Together GBI Magazine talks to Georgia Wheadon, Founder of Umii, about how support from Nova has transformed the development of her business

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Tax year-end considerations

Peter Carey Technical Sales and Marketing Peter.carey@ifamagazine.com

Blackfinch reminds advisers of key considerations when discussing EIS and VCTs with clients and providers

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Three reasons why Newable's scale-up fund should be part of your client's EIS portfolio GBI's Alex Sullivan talks to Newable's Sanjeev Gordhan and Avantika Gupta

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Clients looking for high growth investment opportunities This planning scenario highlights how Octopus Ventures EIS SErvice could help clients diversify their investment portfolio whilst benefitting from valuable tax reliefs

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Demystifying the costs of EIS GBI Magazine talks to The SidebySide Partnership’s James D’Mello, to explore aspects about EIS fees and charges that managers might not tell you

Designed by: Becky Oliver

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IFA Magazine is published by IFA Magazine Publications Ltd, Tel: +44 (0) 1173 258328 3 Worcester Terrace, Clifton, Bristol BS8 3JW © 2021. 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

EISA’s Mark Brownridge gets his telescope out and looks at what might lie ahead for EIS and SEIS

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Capitalising on calmer waters

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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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WE LCOM E

April 2021

THE SHOW MUST GO ON

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‘

mpty spaces, what are we living for?

Abandoned places, I guess we know the score’

There can be fewer more poignant songs than this, the final track on Queen’s album “Innuendo” released back in 1991, shortly before the tragic early death of their irreplaceable, flamboyant and hugely talented singer, Freddie Mercury.

The song’s lyrics particularly resonate at the moment, as people across England prepare to follow Boris Johnson’s roadmap out of lockdown and the other home nations follow similar paths too.

The scene is set for the various Covid restrictions, which have impacted our lives and livelihoods for so long, to start to ease. With the one year anniversary of the UK’s first lockdown just past, it reminds us of the terrible sadness which so many have endured through loss of loved ones or having faced mammoth personal survival battles after the dreaded virus struck.

However, our thoughts and plans must inevitably turn to the future and how the world of business may change as a result of everything we’ve been through this past year.

PLANNING AHEAD Nationwide Building Society is the latest to reveal its new ‘work anywhere’ plan allowing its 13,000 employees the flexibility to work from home, office or a mix between the two. Their CEO Joe Garner, told the BBC "The last year has taught many of us that 'how' we do our jobs is much more important than 'where' we do them from”. Interesting!

So, how will the financial planning profession emerge from this year of lock-down? Will we all go rushing back to office life? Will home working and virtual meetings become the new ‘norm’? Or will it be a hybrid of the two?

One thing is for sure, financial planners have transformed the way that they do business over this past year. Many of

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the lessons learned, such as the greater use of technology, will be incorporated into general business practice for years to come regardless of whether workers are based at home or the office.

ON WITH THE SHOW In this combined edition, Michelle Hoskin takes a deep dive into the subject of excellence in IFA Magazine, with practical tips to give your business proposition a proper spring clean.

Faith Liversedge shares her insight into smarter working with introducers and Edward Grant delivers a sound evaluation of how you can support clients in vulnerable circumstances.

There’s also a special section from M&G Investments on sustainable and impact investing We also talk ‘intergenerational planning’ with Prudential’s Head of Technical, Les Cameron, following their influential ‘Family Wealth Unlocked’ research report.

TAX YEAR-END PLANNING With the end of tax year coinciding with the Easter weekend, it’ll be a busy time for planners – especially with regard to use of EIS, SEIS and VCT investments. GBI Magazine has plenty of pointers including questions to ask providers and some of the important things to look out for in different propositions which are available across the market.

As always, our thanks go to all our contributors for sharing their views with us this month. We hope you find it to be an interesting read. On behalf of the IFA Magazine and GBI Magazine teams, it remains for us to wish you and yours a happy Easter. Let’s hope the sun shines!

Sue Whitbread Editor IFA Magazine

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INVESTING IN EIS DOESN’T ALWAYS MEAN HAVING TO INVEST IN THE ALL OR NOTHING, “BOOM OR BUST” TYPE START-UPS.

The SidebySide EIS fund targets growth companies that are already through the “start-up” phase and are now producing in excess of £1m of annual revenue. These companies are then mentored and supported by a management team responsible for over $1.5bn of exits, to date.

No initial or annual fees are charged to investors – Allowing for EIS relief on 100% of the clients investment.

Targeting a return of £3 per £1 invested, Net of all fees.

CONTACT Please contact James D’mello with any questions you may have: Mobile – 07957 712 407 Office – 0207 993 8686 Email – James@thesidebysidepartnership.com

April 2021

VU LN E RABLE CLI E NTS

SUPPORTING CLIENTS IN

VULNERABLE CIRCUMSTANCES

Edward Grant, Director, Technical Connection division at St. James’s Place responsible for professional development, takes a practical look at what steps financial planners can take to ensure that clients in vulnerable circumstances are supported

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ere’s the dilemma, clients generally do not identify as vulnerable, although the FCA, in its recent Financial Lives survey, identified 53% of UK adults (27.7 million) with characteristics of vulnerability. Why the difference? Is it relevant? And most importantly what should financial planners do to ensure clients in vulnerable circumstances are supported?

industries focused their initial attentions at older clients as age is easy to identify. The reality is that vulnerability is multi-dimensional and impacts all ages and all backgrounds; wealth is not a barrier to vulnerability either.

Perhaps the best place to start is to challenge the term vulnerable clients. It conjures up negative images and could be holding the profession back in offering relevant, timely and appropriate support. Many organisations across all

As a regulator, the Financial Conduct Authority (FCA) has worked hard to give clarity and in its recent finalised guidance (FG21/1) it reiterated the four key vulnerability drivers of:

THE REGULATORY STANCE

• Life events - such as bereavement, job loss and relationship breakdown

The reality is that vulnerability is multi-dimensional and impacts all ages and all backgrounds; wealth is not a barrier to vulnerability either

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• Health – conditions or illnesses that impact upon daily life • Resilience – low ability to withstand financial or emotional shocks • Capability – which is best described as low confidence or knowledge in managing finances, literacy, or digital skills.

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April 2021

THE IMPACT OF COVID

BECOME A VULNERABILITY CHAMPION

During the period between March 2020 and October 2020 there was a 15% increase in vulnerability characteristics, mainly in financial resilience as a result of the pandemic, as employers or owner managed businesses were impacted by lockdown. If we consider vulnerability as a spectrum, it is the accumulation of circumstances that is likely to increase client risk. It is the role of everyone in the profession to look out for the signs and help raise awareness of the support available.

One way of encouraging clients to utilise the assistance available, either from third parties or advisory firms, is to become a vulnerability champion so that you and your firm are recognised as a safe and trusted pair of hands. Making it easy to access support by clearly signposting additional resources via your website, or including it in your literature, helps raise awareness and may even mitigate the need for clients to seek additional support in the long-term. There is excellent expertise available from the charity sector which you and your firm could signpost, for example, MacMillan Cancer Support, for their online financial guidance and support to individuals and families impacted by Cancer.

Earlier this year, the Personal Finance Society launched the Financial Vulnerability Taskforce which is a great initiative to raise awareness. It includes a nine-statement charter that UK personal finance professionals can sign committing to a set of minimum standards and includes a charter logo that can be added to website and literature. Many professionals have already signed up and have promoted the initiative to their clients and professional connections through their social media posts and newsletters.

Planners should consider how they can adapt their processes to ensure that they are confident the client is not disadvantaged because of their vulnerability

Clients in vulnerable circumstances are likely to have increased stress levels, perhaps distracted by the emotion of the situation, or because of additional responsibilities.

It is not uncommon for them to lack perspective or make reckless decisions. Planners should consider how they can adapt their processes to ensure that they are confident the client is not disadvantaged because of their vulnerability. Being knowledgeable about the spectrum of vulnerability and being empathetic are important skills to embrace.

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During the pandemic I heard of many financial planners who have innovated their approaches and spent a significant amount of time ensuring that their clients have been able to use video conferencing or online secure messaging tools. There has been an increase in client contact with shorter video meetings including facilitating family wealth meetings bringing the wider family into the discussion. Where there has been low digital capability, planners have adapted their processes to ensure clients are

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April 2021

VU LN E RABLE CLI E NTS

not excluded. They have also discussed the risks of online scams and how clients can take effective precautions. Some advisers as part of their onboarding process obtain written consent from their clients detailing who they should contact, if they believe their client is at risk of scammers.

Whilst the GDPR rules have flexibility where client harm is concerned this approach removes any doubt.

Earlier this year, the Personal Finance Society launched the Financial Vulnerability Taskforce which is a great initiative to raise awareness

mean that family members or executors will not know about the accounts and how to access them.

Encouraging clients to talk about what they have and how their family or executors gain access is now core planning. I recall advisers talking about clients bringing shoe boxes of documents to collate and organise, in a paperless world the virtual shoe box has gone but it remains critical that our digital shoe box is still accessible. Some planners now utilise online client areas where this information can be stored securely.

Recognising clients in vulnerable circumstances and ensuring they can access relevant, timely and suitable support is now a core service and planning to avoid vulnerability should now be interwoven into all financial plans.

About Edward Grant

Traditionally financial planners encourage clients to consider putting in place Wills and Powers of Attorney.

This is an important foundation of sound planning and whilst it does not lessen the emotional impact of the life event, it helps bring greater clarity in respect to financial affairs during bereavement.

Edward Grant is Director in the Technical Connection Division of St. James’s Place, leading the accreditation and technical services teams supporting the St. James's Place partnership delivering client focused outcomes. Within his role as Director, Edward is also responsible for professional development at St. James’s Place including over 950 Chartered Advisers.

DIGITAL PASSWORDS

Past President of the Personal Finance Society, Chartered Financial Planner, Fellow of the Personal Finance Society and current Chair of the TISA Tax Committee, Edward is a passionate advocate of the financial planning profession and during his extensive career spanning over 30 years he has sought to support, mentor and lead the development of initiatives to build consumer confidence and trust in financial advice.

Another area that perhaps needs to be considered is digital passwords. We all have today an array of online accounts including savings, banking and utilities that can become inaccessible on death. We have been encouraged to turn off paper statements which will

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UK Employers

The way you hire from the EU has changed

You need to be a licensed sponsor to hire eligible employees from outside the UK. Becoming a sponsor normally takes 8 weeks and fees apply.

The new points-based immigration system has also introduced new job, salary and language requirements that apply when hiring from the EU. This does not apply when hiring Irish citizens or those eligible for status under the EU settlement scheme.

Find out more at GOV.UK/HiringFromTheEU

BETTE R BUSI N ESS

April 2021

HOW TO GET

THE MOST OUT OF YOUR INTRODUCERS, TODAY

As financial advice and planning businesses adapt to the demands of remote working, are there some golden nuggets which can be applied to working with introducers? Faith Liversedge has some clever ideas which you can use and which will also help you to build greater client rapport into the bargain

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hile it’s great to see many financial planning and advisory firms thriving during the pandemic, it’s no secret that many have found the traditional channels for lead generation much less effective than normal.

Today, I want to focus on introducers. How can you make the most out of these relationships right now?

I’m going to start by letting you into a secret… While the formula I’m going to outline here is what I recommend for the majority of my financial planning and adviser clients, it’s also to a large extent how I’ve built up and scaled my agency.

And it can all be done remotely, which is great news for the future. Especially since the vast majority of advisers agree that this way of working is here to stay.

Let me explain.

Holding virtual events, like live webinars, for your clients and introducer connections, gives you a fantastic platform to present yourself and your firm, and capture potential prospects’ information.

Let’s give an example. Perhaps there’s a local accountancy firm you have a connection with. You have a list of clients and they also have a list of clients. Bingo, we have an audience - proceed to step two.

Next, create a co-branded, educational webinar both for their clients and yours.

This could be something topical like: ESG investing, the impact of IR35 rules or just a general topic of interest to both you and your introducer’s clients.

THE MAGIC INTRODUCER FORMULA

Creating a co-branded webinar allows both you and your introducer to provide your unique perspectives and value to the audience. Crucially, however, it puts you in front of their clients, and them yours, it’s completely mutually beneficial.

The method I’m going to propose to get the most out of your introducer relationships is simple: hold virtual events and follow up properly.

Now this sort of webinar shouldn’t be a sales pitch. Think of it as an opportunity to provide genuine value to your introducer’s clients and - of course - to your own existing clients. Your existing clients will no doubt appreciate the

So, let’s get to the good stuff.

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time and effort you’ve given to providing them with this information. It’s also an excellent demonstration that you’re providing consistent value to your clients, but that’s by-the-by.

THE CALL TO ACTION Towards the end of the webinar, having a clear and concise call to action is key.

Something like a ‘free financial health check’ or 30-minute complimentary consultation via video call is a great place to start, but whatever fits the topic and is personal will work well.

Think of it as an opportunity to provide genuine value to your introducer ’s clients and - of course - to your own existing clients THE ALL-IMPORTANT FOLLOW UP If you’ve played your cards right, expect a handful of webinar attendees to take you up on your call to action at the end, and perhaps even a few of your existing clients to contact you about further advice and planning.

However, where you’re really going to catch the marlin is in the follow up.

You see, after the event is over, it’s entirely legitimate to retain the email addresses of those who registered for your webinar, so, why not go along and add them to your email list?

Make sure you send regular emails to webinar registrants as you would, (or definitely should be doing if you’re not) to your clients.

This way you’re keeping these prospects from the webinar on a slow burn and keeping your firm top of mind. Over time, you’ll be surprised how many past webinar registrants will reach out to you for advice or a consultation, especially if you regularly send them valuable and engaging content.

Effectively, you’ve hoovered up a substantial position of your introducer’s clients' email addresses, all by having them register for your webinar.

From then on, you just need to schedule out those emails, pour yourself a caipirinha and wait for the leads to roll in.

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In fact, you’ve probably experienced something much like this from the other side. You may well have fallen into a webinar ‘funnel’ (this is just a fancy word for a marketing system) just like this, but held by a product provider.

Now’s your chance to apply these methods to your firm.

BUT DOESN’T THIS REQUIRE ALL MANNER OF WHIZZ KID TECHNICAL KNOW-HOW? Not really.

Really and truly, there are lots of ways to hold and advertise a successful webinar and there’s too much detail to cover everything for the purpose of this article.

You’ll need a live webinar tool to host and manage it for you, Zoom’s webinar add-on works just fine.

I like to use BigMarker for a more professional and customisable experience.

You’ll need to create a registration page where prospects can register for the webinar and make sure you send this to your email list, and to your introducer’s list too.

Creating some simple banners for social media that link to the registration page is also a good idea if you or your introducer have an audience there.

However, the most important thing is to make sure you retain the email addresses of those who register so you can carry out that all important follow-up.

Really the trick is just to do it. By the third time it will become totally routine and you may find it to be one of the most valuable and sustainable sources of new business.

If you have any questions, please feel free to email me. I will also shortly be producing a guide on introducer marketing for Adviser Home, so stay tuned for that.

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 forward-thinking financial advisers and planners to become more profitable through websites, communications and other laser-focused marketing techniques.

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April 2021

PRU DE NTIAL

FAMILY WEALTH

UNLOCKED Talking to IFA Magazine, Les Cameron, Head of Technical Services at Prudential, identifies some of the highlights from Prudential’s new Family Wealth Unlocked report which he believes will help advisers to overcome some of the hurdles involved in effective intergenerational planning

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rudential’s Intergenerational Planning “Wealth Unlocked” report was released in March. It uncovers multigenerational family views on financial planning and how advisers can best respond to this challenge, to help future proof your business.

you're dealing with trustees, ask if it’s OK to speak to the beneficiaries as well. Asking permission to go and speak to a wider range of the family makes good sense.”

THE TIME IS NOW

It identifies specific areas of concern which Cameron highlighted, such as advice being too expensive, too complicated or that an adviser is not trustworthy.

He comments “Maybe 40 years ago you might have thought that this was the case, but we have a highly regulated industry now. It's trying to get beyond those perceptions, but you can only do that by your professional demeanor.

According to research from Kings Court Trust, assets to the value of £5.5trn are expected to be passed to the next generation in the UK between the years 2020-2047. This includes much of your clients’ wealth.

As Prudential’s report highlights, taking action now will mean that the more your clients’ offspring are engaged in the planning process, the more likely it is that your business will retain the account for the longer term.

But where do you start? What are the issues and barriers involved? How can you overcome them? Prudential’s Les Cameron has some practical ideas on the subject.

The report also looks into some of the myths and perceptions which surround the use of financial advisers.

These are useful elements for advisers to consider when building their business strategy.

“Then it's tackling myths. Do clients understand where their money would go after they die? Many might think it’ll just go to their spouse automatically. Maybe it will but are they thinking about their pension? Commonly, people think their family can inherit their pension. The law allows that but the schemes do what the schemes want to do within the law. It’s good to try and draw those things out.”

THE ADVICE GAP As Cameron explains “when we looked at the research its clear there is still an advice gap. So, if you’re dealing with granddad for example, ask if it’s OK if you speak to dad. If

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FAMILY MATTERS The report also looks in some detail at whether different generations of a family might have concerns about

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sharing the same adviser. As Cameron explains, “It’s important to get on top of this and dispel any doubts.

Whether you're dealing with the same family or not, you still have data protection rules and client confidentiality requirements to consider. You can't be sharing the whole family's information with the whole family unless you've got the whole family's permission, to do so.

Thinking about clients’ situations and highlighting planning ideas or areas that might need work should also be on the radar. Cameron cites an example of clients who may have a grandchild and explains “their children might have a protection need now because they’ve got a child depending on them. They may have given birth to a child benefit tax charge.

“Identifying the different life stages that apply to your different clients is an opportunity to highlight such things as being a significant change for them. You can then ask questions such as “Have they been getting any financial advice?” It’s about generating new leads by reacting to family circumstances.”

THE COVID EFFECT Cameron sees a strong opportunity for advice here as indicated by the survey findings. He comments: “Over half of our survey respondents said they’d already sought advice or were likely to seek advice because of the COVID pandemic. Encouragingly, it showed that when younger generations do seek advice, if their parent uses an adviser, more often than not, the child will look to use that same adviser.”

Cameron highlights two angles in the research about why people might delay decisions on intergenerational planning. Firstly, are general perceptions about advice such as cost, complications or lack of trust in advisers.

The other relates to worries about giving money away too early because of particular concerns such as the risk of money being squandered or loss of control.

“An adviser can deal with these concerns” he comments.

“For example, by explaining about how the use of trusts can mean giving money away now, but still retaining control over the money.”

Then there’s tax. Counter to what some clients might think, advisers can highlight ways which won’t give their beneficiaries a tax problem. As Cameron points out, “you can actually be giving someone tax relief by giving them

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April 2021

money. If clients put money in their child or grandchild's pension, they get tax relief.

A key impediment to planning is the need for access to funds. Clients may worry that they’re going to need the money themselves, that they’re not giving away in case.”

The effective use of trusts can help here as Cameron explains. “There are always competing outcomes. There’s the client’s need for the money for themselves, the need to pass on the money and the desire to pass on the money as IHT efficiently as possible. Somebody has to sit down and help them see these are your needs, these are your priorities.

But that's what getting financial advice is all about.”

STRATEGIC PLANNING So, what are Cameron’s tips for advisers in connection with intergenerational planning?

“Think about your current proposition but also your future proposition. How do you start seeing future generations coming into your advice firm? If they inherit the assets, you want them to be your clients. By thinking of how you can future proof your proposition, means making sure that different generations of clients’ family come to you and not another adviser.

“Secondly, IHT is a fairly complicated area. It’s an emotive area. People don't like paying it. People will want to move their money on to the right people at the right time with the right amount of tax. And almost all of them will need a financial adviser to do that efficiently. Promote your services to help people understand how that wealth transfer can go the best way for them and their families.” Reading the full report is clearly a good place to start.

FOR MORE INFORMATION View the full interview with Les Cameron on www.IFAMagazine.com Or Visit www.pruadviser.co.uk/wealthunlocked to download a copy of the Family Wealth Unlocked report and for more details on IHT planning, tools and tips via the PruAdviser Hub.

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M ICH E LLE HOSKI N

April 2021

THE 4ES OF

EXCELLENCE™ Michelle Hoskin, Standards International, highlights why she believes that excellence – not just professionalism - is the only standard to strive for and achieve, as well as outlining useful yet practical steps that you can take to achieve it

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xcellence. We all know we want it both in our personal lives and for our business but, sadly, in a profession that puts way too much focus on academic professionalism, excellence in the broader context is often missed by a mile.

For me though, I believe that excellence (not just professionalism) is the only standard to strive for and to achieve. Why? Well for me it’s just such an amazing benchmark: regardless of the role that you are in or the shape of your financial planning or advisory practice, everyone just seems to ‘get it’ and – with buy-in being a number one priority in today’s world of work – excellence seems to provide such a wonderful springboard.

BUT WHAT IS STOPPING US? How many of you have ever found yourself or your business in a position of over-committing and under-delivering?

Whether it is to clients, your team members, other key stakeholders or, worse still, yourselves? I know it’s easily done.

But – before you beat yourself over the head with a big stick – I’d like to reassure you that you are not alone.

When we care, as much as I think we all do, we become masters at believing we can get more done than is humanly possible. As a driven, high achiever, I suffer from this often – and so do many people I know. Does it make us bad

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people? Of course, not – we are just super keen and eager and we believe that we have the necessary superpowers on hand to get us through. But it does however mean that the service and operational standards that we have set for our businesses are sadly often falling well short of our potential and our promises.

After 20 years of working within this magical profession, I continue to talk about and promote excellence; however, I am very aware that – while many people have a desire to achieve excellence in everything that they do – a large proportion have little idea of how to actually achieve it, never mind knowing where to start.

So, to give you my usual starter for 10, I knew I needed to create a mechanism, a method, a process for achieving the ultimate pot at the end of the rainbow. Plus, I knew if I really did this right, achieving excellence would be more accessible and therefore transferable across the profession. A win for one means a win for many.

Just to put my marker in the sand here and so that you are super clear: I am not talking about technical excellence which does continue to take up airtime in many conversations… I am talking about excellence in the general sense which can be applied to any area, including but not limited to: • the basis by which a business sets its internal and external standards and working practices • a structure for the successful completion of any project

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• the process to move from creation to implementation of a new process or workflow • the selection and integration of a new back-office system • the key stages for launching a new client proposition or journey • the launch of business improvement projects.

April 2021

four stages means that you don’t try to do too much too soon or bite off more than you can chew, which of course leads to the dreaded ‘over commit and under deliver’. Nobody really wins when you feel like you’ve let the side down.

Please trust me and trust the process.

ESTABLISH

And last but not least: • the basis by which your team can be trained and developed.

It can be used for literally anything. Excellence in means excellence out.

WHAT’S THE PROCESS? As I was the creator of The 4Es of Excellence™, it was only right that we tested the concept first within the walls of Standards International HQ. We use this cycle at many levels of our internal business and external client offering, and have done so religiously for the past two years. It sits specifically as the basis of our initial and ongoing standards assessments. * https:// standardsinternational.co.uk/certification/ Here is the lowdown:

Far too often, we can become victims of the ‘quick win’ culture and we instantly come unstuck. The Establish stage gives you plenty of time to really try to get a feel for what it is you are trying to do, the stages involved, who you may need to involve in the process of implementation and, most importantly, defining what success looks like.

Everything you are trying to achieve should be seen as a marathon and not a sprint – and in fact working through each stage of The 4Es of Excellence™ could take anything from one day to four years. It all depends on what you are doing.

Those who dive in too quickly at this stage will have missed the opportunity to think things through properly, as they won’t have given themselves everything they need to get this step right.

1. The tool is available for universal use, so there is no reason that it can’t be adopted by you too.

Consider the Establish stage like cementing the foundations for a house into the ground. Rush it and your house will collapse as your planning simply won’t be up to scratch.

2. The cycle should be consistently referred to and reviewed and should live firmly at the centre of all initiatives, projects and deliverables.

Once you have established your new way of working, stage one of your project or learning and development, you can then move onto the Embed stage.

3. It has no strict timeframes – the duration of the cycle can be tailored to suit you and what you are doing.

EMBED

4. You must embrace it and appreciate its effectiveness and – most of all – use it as a tool to unite your whole team.

AND NOW FOR THE FUN BIT So, grab some paper and a pen, take a moment and write down everything that you are working on right now that is NOT directly client related.

These could be projects you are handling for the business, or a new idea you are trying to get off the ground. As I’ve said, it doesn’t matter – the cycle works for anything.

The 4Es of Excellence™ is a cycle covering four key stages of a thinking and doing process. Breaking your ‘thing’ down into

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Embedding your new practice at a deeper level will give you the opportunity to test, amend, adjust and improve. Again, don’t rush, give yourself plenty of time in order to see what is working and what is not. It may feel a bit frustrating but it will mean that you are focusing on doing it right initially and not wrong once, twice or many times later on. Less haste will pay dividends at this stage – and is a must to achieve results faster and more effectively further down the line.

Don’t rush – people who put unnecessary pressure on the process at this stage may not understand the methodology and are therefore projecting their own deadlines and timescales on you. If done correctly, this shouldn’t even be an issue here, as you should have communicated the ideal timescales from the outset at the Establish stage.

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April 2021

M ICH E LLE HOSKI N

This stage takes the longest… it’s the slow cooking of the culinary world… the slower, the better.

ELEVATE Once you have firmly embedded what you are doing now comes the fun part.

This is the stage in the cycle is where you really start to see the benefits, the return on your investment (ROI) and the returns on effort made (REM).

Elevate is the stage to leverage everything you have done so far, so that the maximum impact and results can be achieved! Boom! All of the planning, the tweaking and the improving is about to pay off big time.

It’s like killing two birds with one stone. Ask, how can you take what you have done and apply it in a way that multiplies your return? A few examples could be: • elevating the learning of a new team member to take on more valuable responsibilities in the team • taking the functionality of your now embedded back office system so that you can do more with it but for the same fee you are already paying • making more and different use of your office space or working set-up • revisit that process, procedure or client journey and identifying the improvements needed • applying the learning and development you have undertaken to business improvement The list could go on and on.

ENDLESS Throughout my whole professional life, I have been marginally obsessed with the importance of constant and never-ending improvement. Somehow I am hard-wired to believe that there is always a ‘better’ way of working – which means my job has always been to try to find it!

So, this stage of the cycle for me is my favourite. I continue to feel a sinking in the pit of my stomach when I see individuals and firms settling for what they have or just being happy with the way things are done because ‘it works’. Just because ‘it works’ doesn’t mean that it shouldn’t be changed.

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There is so much to say about this stage but let’s keep it simple: The next time you go to say or even hear someone say, ‘we just do it like this’, or ‘it works so there is no need to change it’, or ‘we’ve tried that before and it didn’t work’, etc., etc., etc., – then it’s absolutely time for a review of how things are done.

Somehow I am hard-wired to believe that there is always a ‘better ’ way of working – which means my job has always been to try to find it!

So, if you have completed a training programme, implemented a new product or service, created and launched a new process, or had a move around in your office, then ask: how can we make this better? How can we improve this to achieve continual and endless effectiveness? The magic comes from the momentum of change. Embrace it!

About Michelle Hoskin Michelle Hoskin (aka Little Miss WOWW!TM) is well known for her endless enthusiasm and energy, infectious personality and unique outlook on what she describes as a “magical profession”.

With over 20 years’ experience working alongside some of the world’s most successful financial services organisations, Michelle is an internationally recognised author, speaker, coach and leading expert in the design and implementation of international framework-based best practice standards.

Michelle is pioneering a drive towards increased professionalism and operational excellence through her continued work at Standards International – the UK’s premier certification body for British and international financial services standards – of which she is the founder.

She also most recently led a sector committee whose objective was to develop and launch an exciting new international standard for professional paraplanners.

Relentless in her pursuit of a global movement of change within financial services, Michelle is fully committed to supporting financial professionals worldwide to achieve things they only dreamed were possible, and to working with them so that they become the best possible version of themselves.

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TH E OPE NWORK PARTN E RSH I P

April 2021

WHY FINANCIAL ADVICE IS

PERSONAL IFA Magazine talks to Claire Oldstein, Chief Marketing Officer, The Openwork Partnership, about her experiences in going through a major corporate rebrand during the Covid pandemic

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he Openwork Partnership was already one of the UK’s largest and longest established financial advice and investment networks with a proud history and a strategy focused on further expansion as an independent adviser-owned business. With 680 network firms and 4,200 advisers looking after more than £20 billion of clients’ money, everything was going well.

So why, a year ago, despite the Covid pandemic, did the business undertake a rebrand from Openwork to The Openwork Partnership?

According to Claire Oldstein “To deliver on our ambition of becoming the leading network ranked on better outcomes for more clients, by reputation and by growth across the business we had to change. Expanding our distribution and range of propositions needed a rebrand.

alongside updated values and behaviours is central to a wider more confident and inclusive positioning.

She comments “The Openwork Partnership name captures the essence of the organisation, which is that by working together to build trust and deliver peace of mind, everyone can make a difference.

Our strength has always been diversity with all our firms having their own branding. Unifying the brand under one heading, without losing the individual firm identities was essential.

“The rebrand achieves this with an upgrade to our unique Smart Hub system enabling firms to dual brand, which is mandatory for essential client documentation. They can dial up or dial down The Openwork Partnership brand as they choose.”

“The essence of the new brand is to put the client firmly at the heart of everything that we do. Our ambition is to make it easier for advisers and their clients to face the future with confidence and optimism. If we wanted more people to know about us and be advocates of the power of personal advice, we needed a new brand positioning and we decided on “For us financial advice is personal.”

AND THERE WAS A PANDEMIC

“We conducted extensive research involving more than 180 advisers, clients and staff. They came back with a clear message on the importance of personal stories, shared values and commitments and making a difference to clients’ lives.”

“It all culminated with a presentation of the new brand vision to thousands of advisers and staff at a virtual conference.” she adds.

EVOLVING TO GROW Oldstein explains that building the new brand with a new visual identity, website, strapline and adviser materials

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“Lockdown and the pandemic meant that it all had to be delivered virtually which was challenging but our team adapted. We’ve had tremendous support from staff and agencies and across the business.” says Oldstein.

“The reaction so far has been very encouraging. Our big plans include a wider brand awareness campaign and we’re in the ideal position to deliver future success.”

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M&G I NVESTM E NTS

April 2021

THE COMING DECADE FOR

CLIMATE SOLUTIONS

Randeep Somel, Fund Manager, M&G Climate Solutions Fund, is finding reasons to be cheerful as he uncovers some of the powerful drivers of change which are set to influence climate solutions in the months and years ahead

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n what has been a very volatile start to the decade in humanitarian, economic and political terms, let’s take a look at the long-term challenge of climate change to understand how it is progressing and how it may have been impacted by recent events.

of solar is a tenth of what it was a decade ago, both solar and onshore wind are now cheaper alternatives to natural gas, despite commodity price falls.

WILL THE COLLAPSE IN FOSSIL FUEL PRICES DESTROY THE ECONOMIC CASE FOR RENEWABLE ENERGY?

Over 50% of global CO2 emissions are caused by power generation, therefore it remains a critical part of reducing CO2 emissions. Yet, renewable energy alone will not be able to solve this issue, other areas of emissions will need to be scrutinised and solutions found.

Subsidies for renewable power have been in the process of being phased out for some time. This is a positive step not a negative one. As scale has increased and the industry’s journey along the learning curve has continued, solar and wind are able to compete without external support. The cost

Source: Lazard Levelized Cost of Energy Analysis, Version 13.0.

OurWorldinData.Org, December 2020.

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CLIMATE SOLUTIONS…MORE THAN JUST RENEWABLES?

Promoting the use of sustainable timber will also encourage the wider adoption of sustainable forestry, which addresses the release of CO2 in the industry. Companies such as US listed Weyerhaeuser, which operate over 25m acres of sustainable forests in North America will play a vital part.

Buildings are one of the biggest consumers of energy, improved technology enables them to be more efficient today. For example, a company such as Danish-listed ROCKWOOL International provides stone wool insulation for new builds and for retrofit. It enables a vast reduction in energy consumption of a building and helps reduce the amount of power generation needed. It will play a crucial part in addressing the climate challenge.

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The circular economy will have a significant role to play in reducing emissions. We need to increase ‘re-use, reduce and recycling’ in order to stop products going to landfill at the end of their usefulness and reduce the level of pure product required for new products. This will have a major impact as up to 45% of non-energy greenhouse gases could be addressed by these measures according to some estimates¹.

An example is US-listed decking producer Trex, which makes outdoor decking from recycled plastic. It has shown itself to be a higher-quality, more durable and loweremission alternative to traditional timber decking.

April 2021

THE US AND CHINA: ENTER THE EAGLE AND THE DRAGON In the space of six short weeks in 2020, the future of the Paris Climate Deal was transformed by two significant events.

On 22 September 2020, shortly after US President Donald Trump called the Paris Agreement “a one-sided deal” and criticised China for being “the world’s largest source of carbon emissions”, President Xi Jinping of China announced that China would scale up its intended nationally-determined contributions (under the Paris climate agreement) by adopting more vigorous policies and measures. In practice, this would see China achieving a peak in carbon dioxide emissions before 2030 and carbon neutrality before 2060. Xi added that “the human race cannot ignore the warnings of nature over and over again”. He also urged other countries to pursue a “green recovery of the world economy in the post-COVID era”.

Then on 3 November 2020, the US elected a new President, and one that has a very different approach to the challenges of climate change. Joe Biden made climate change one of the key pillars of his campaign and has re-joined the Paris Climate Deal in one of his first acts as the 46th President.

Biden’s team have already started planning to restrict oil and gas drilling on public lands and waters, increase

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mileage standards for cars, block new pipeline projects that transport fossil fuels, provide federal incentives to deploy renewable power, and mobilise other nations to make deeper cuts in their own carbon emissions.

The new treasury secretary, Janet Yellen has also publicly discussed a carbon tax. As governments across the world look for new methods to pay for the huge deficits run up due to the COVID-19 pandemic, a carbon tax may be a politically palatable option.

Market mechanisms have begun rewarding environmentally-friendly companies with higher valuations. This is due to them being recognised as less exposed to regulation and less likely to become redundant over the longer term. The more this continues, the more we will notice management teams incorporating climate solutions into their operations, products and services.

Climate challenge can be thought of as a three-legged stool for the stakeholders that need to participate: Consumers, Industry and Government. Studies from across the world

As governments across the world look for new methods to pay for the huge deficits run up due to the COVID-19 pandemic, a carbon tax may be a politically palatable option

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now show populations are concerned about climate change and are willing to change their own behaviour.

Industry can now see the economics working in favour of sustainability and are willing to commit capital to the effort and starve funding for ‘de-merit’ activities. That then leaves Government – while European governments have taken a lead, the final awakening of both the Chinese and US governments will provide the much-needed impetus to reach our carbon targets over the coming decades.

In the M&G Climate Solutions Fund we have a focus on clean energy, green technology and the circular economy.

All key areas for investment and growth as we transition to a carbon neutral world over the coming decades.

Source: Ellen MacArthur Foundation, Completing the Picture, Adapted from Material Economics Analysis for the Energy Transition Commission, Mission Possible, Reaching Net Zero Carbon emissions from harder to abate sectors by mid-century, (2018).

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About Randeep Somel Randeep joined M&G in 2005 as a fund managers’ assistant on the Equities team. At different stages between 2013 and 2019 he was fund manager or deputy manager of the Global Themes, Managed Growth, Global Recovery, Global Select, Pan European Select and Positive Impact strategies. In November 2020, he became manager of M&G’s newly-launched Climate Solution strategy. Prior to joining M&G, Randeep worked for State Street in a fund accounting role. He graduated from Birmingham University with a degree in economics in 2003. Randeep has the IMC and is a CFA charterholder.

I FAmagazine.com

M&G I NVESTM E NTS

April 2021

A POSITIVE

CHARGE Ben Constable-Maxwell, Head of Impact Investing at M&G Investments, is one of the driving forces behind the move to integrate ESG, sustainability and impact investing into fund and portfolio management decisions. In this Q&A, he talks to Sue Whitbread, Editor at IFA Magazine, about how and why ESG integration and impact investing are underpinning successful investment strategies for the future

IFAM: WHY SHOULD ADVISERS BE INTERESTED IN ESG? BCM: There are a number of compelling reasons! It is widely accepted that environmental, social and governance factors (ESG) can have a material impact on long-term investment outcomes. Understanding ESG issues – both risks and opportunities – is therefore fundamental to accurately interpreting long-term risk and return.

Advisers also have a responsibility to understand how their clients’ investments are being managed in ESG terms and to use that to hold fund managers to account. For example, there is an important distinction to be made between ESG integration – the explicit and systematic inclusion of ESG factors in investment analysis and investment decisions, where these are meaningful to risk and potential return – and investment products that have an explicit sustainability or impact-related goal. Advisors can play a hugely important role in helping their clients to build this understanding.

There is then investment performance to consider. We believe incorporating ESG factors improves the investment decision-making process and can lead to better risk-adjusted financial outcomes for investors.

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Finally, there is client interest. A growing number of investors are focused on social and environmental issues and are interested in how their investments relate to them.

It is important today that advisers are prepared to discuss this with their clients, and can introduce them to suitable products, whether the desired focus is on ESG primarily for risk management purposes or whether they want to put their investments to work in a sustainable or impactful way.

We think this dialogue can further build the relationship between advisors and their clients.

IFAM: WHAT DO YOU SEE AS THE DRIVING FACTORS BEHIND THE SHAPE OF THE ESG LANDSCAPE THIS YEAR? BCM: New regulations will continue to push companies and asset managers to disclose more information. In Europe, Sustainable Finance Disclosure Regulation (SFDR) came into effect in March 2021 and will lead to enhanced disclosure by asset managers that promote sustainable investment funds. The aim is to increase transparency and comparability for investors, which can only be a good thing.

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There is also the UN Climate Change Conference (COP26) coming up in November 2021. I expect this event, which is being hosted in Glasgow, to intensify the focus on climate change as an urgent risk and on how investors and companies are managing their exposure to – and addressing – that risk.

Alongside the focus on climate change, rising awareness of the other systemic environmental challenge, biodiversity loss, will inevitably accelerate in 2021. As yet this has not received the attention that Climate has but that is changing.

Then there is the ongoing pandemic, of course. In 2020, COVID-19 increased awareness of wide-ranging societal risks in investors’ minds, from public health to social inclusion, and this will continue this year.

And the issue of diversity will continue to shape the ESG landscape as we go through this year. Importantly, I think investors’ focus will expand beyond gender to other aspects of diversity.

IFAM: M&G HAS BEEN A LONG-STANDING EXPONENT OF ESG AND IMPACT INVESTING. YOU HAVE THE SPECIFIC FOCUS FUNDS BUT HOW DOES THIS APPROACH PERMEATE MORE BROADLY THROUGH M&G’S FUND RANGE AND DIFFERENT ASSET CLASSES IN WHICH YOU INVEST? BCM: We should start by trying to distinguish between these terms – of ESG and Impact Investing. They are linked but distinct. All our investment strategies are committed to integrating ESG with the aim to deliver improved long term outcomes for our funds and our clients. This process has been ongoing for some time, certainly accelerating in recent years. Sustainability and Impact investing are further up the curve, recognising not just the effect of ESG/sustainability issues on our investments but also that our investments have an impact on real-world social and environmental challenges and outcomes.

Some think of ESG as being an ‘outwards-in’ approach, that it’s about how external ESG factors affect our investments, very much linked to our fiduciary duties. Impact investing is the other way round almost - more of an inwards-out effect. It’s about focusing on how our investments affect the outcome of major societal challenges, as well as aiming to deliver an investment return.

More and more of this latter perspective is influencing mainstream investing. Investors are thinking about the

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broader impact of their investments as well as developing dedicated impact investing strategies. This is the direction of travel for M&G and hopefully for our industry too.

As these developments accelerate, we need to be clear about definitions and distinctions. Our impact funds have an explicit and dual objective to deliver investment returns but also to generate social and environmental impacts. The big background risk is that investors greenwash or impact wash or overclaim about what they do. So whilst we are mindful about the value of moving towards a greater focus on impact across all our investments, we need to be clear to our clients about each fund’s mandate and objective and what outcomes they are designed to achieve, thereby minimising this risk of overpromising or overclaiming.

IFAM: WITH INCREASING EMPHASIS ON DISCLOSURE AND TRANSPARENCY, ARE THERE PARTICULAR TOOLS YOU FIND USEFUL FOR ASSESSING IMPACT/SUSTAINABILITY OF INDIVIDUAL BUSINESSES? BCM: Starting at the foundations, at M&G we have a well-established ESG integration programme which employs a broad range of tools and data to inform and enhance our investment thinking. This is supported by our sustainability and stewardship team but is really put into practice by the analysts and fund managers.

We use a range of information and data sources. For us information from investee companies is the primary source of our ESG analysis and a crucial part of our stewardship role. As part of our integration approach we aggregate selected data from external providers into an internal scorecard and toolkit. This can sit on fund managers’ desks and while it incorporates information and data from companies and third parties, it also includes the M&G analysts’ informed view on the issues at hand. So it’s not just the work of the Sustainability & Stewardship team, it’s the sector analyst giving their specialist view too. It’s a collaborative effort.

On alternative data sources, we’re using them more and more. We have developed tools to understand the risks and opportunities arising from various climate change scenarios, giving us a richer, more forward-looking perspective on this crucial issue. On challenges like health, supply chains, biodiversity and others, there are varied data sources that can support our analysis. On biodiversity for example, investors need to consider how our investments

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are reliant on the natural world and can either support it or damage it. Useful tools here include using geo-spacial mapping data to help us understand the ecological footprint of an investment, highlighting where a company might be contributing to deforestation through its business activities. Impact investors can invest in companies providing solutions to address this huge challenge, for example by rebuilding natural eco-systems.

We think in a listed-equity strategy it makes sense to have a focus on those earlier-stage pioneering businesses, but in the interests of overall portfolio liquidity you need a decent balance between smaller, medium and large-sized businesses. So, in listed-equity, liquidity helps you define the type of investment and provides context to the type of impact you can have, but it’s not a massive challenge.

Which brings us to our impact investing approach, where we use all these approaches and more. When a fund has an objective to contribute to the Sustainable Development Goals (SDGs), we need to assess that contribution and measure the impacts as effectively as possible. We conduct our own analysis which incorporates company-reported information and independent data sets, but where there are gaps in the data we can also look, for example, at academic reports into how social inclusion can be boosted by access to finance, or scientific studies on improved health outcomes from a particular treatment.

We are exploring tools which allow us to conduct an independent ‘net impact’ assessment of a portfolio, supporting our analysis to ensure that our investments, while contributing to one goal, are not negatively affecting another goal.

In the traditional home of impact investing – private market or Venture Capital investing – liquidity is clearly more of an issue. Such strategies represent the origins of impact investing but are not necessarily available to the public through investment funds. We have impact-focused strategies in private & illiquid debt and private equity, and in development in Alternatives, which invest for impact where liquidity is more of a constraint. However, investment opportunities are growing fast in these areas as the world recognises the need to scale up the capital needed to solve the most urgent societal challenges.

IFAM: HAVING IDENTIFIED TARGET INVESTEE COMPANIES, DOES LIQUIDITY CAUSE MANY PROBLEMS FOR YOU? BCM: This will vary for different asset classes. For impact investors in public markets, investing in listed equities for example obviously makes liquidity easier. Part of our aim in setting up a positive impact investment approach was to help democratise impact investing – to be able to make these investments available to the general investing public.

The higher liquidity in public markets is important in enabling us to deliver on that goal.

But within listed markets there are still ranges of liquidity. In our Positive Impact strategies in Equities we focus on three types of investment. It starts with ‘Pioneers’ or early-stage – sometimes less liquid businesses which are using innovation to deliver positive long-term impacts on social, environmental and economic challenges. Then we go up the scale towards ‘Leaders’ , the more mature, established business models that tend to be more liquid. In the middle are ‘Enablers’ which are using technology or other skills to help others generate a positive impact.

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IFAM: IS THE POPULARITY OF RESPONSIBLE INVESTING LEADING TO MARKET ANOMALIES? BCM: In public markets, the shift towards sustainable investing - and an increasingly supportive regulatory backdrop - has been leading investors towards a focus on certain types of company, most obviously in areas such as clean tech or renewable energy.

As a valuation-focused investor we’ve got to be mindful of that. Long term fundamentals in this area are compelling but we avoid over-heated areas where momentum has extended beyond those fundamentals. We need to be able to see a return on our investment over the long term.

For our listed equity impact approach, our rigorous “triple i” impact investment approach means that we are strict about the types of investment we make. We are looking for companies not only with high quality business models but with a clear societal purpose and measurable, positive impacts, where we want to understand the proportion of the revenues which contributes to the positive impact. Our stringent approach here naturally steers us away from some of the hotter areas that don’t live up to our scrutiny.

However, we should add that the more sustainability is incentivised by technology, societal preferences and regulators, the more the investible market grows, and more and more companies enter our universe as potential ‘positive impact’ candidates.

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IFAM: HOW POWERFUL IS THE GROWING FORCE OF INVESTOR INTEREST AND CONSUMER DEMAND BEING FELT BY THE BUSINESSES THEMSELVES AND, IF SO, IS IT DRIVING ANY DIFFERENT HABITS AMONGST THOSE BUSINESSES? BCM: We’ve seen transformational change here in recent years. Investors are piling pressure on companies to articulate their sustainability strategy, to disclose better ESG data and increasingly to articulate their purpose and how it will enable them to deliver on their societal responsibilities. This has led to a sea–change in corporate disclosure and strategy around sustainability. It is now top of the agenda at board meetings and is increasingly being put directly into incentives for management such as executive remuneration targets. This pressure has moved beyond the need for policies towards a focus on actual performance and evidence.

Beyond investors, huge pressure is now being exerted by consumers, regulators and civil society. Is this pressure being felt by businesses? Yes, it absolutely is. Companies are having to face the fact that if their business model is unsustainable they are going to have to change or become defunct. Not all businesses are embracing this change, but more and more are, which is a much-needed development. One of our roles as investors is to check whether companies are ‘walking the talk’ with regards to their sustainability agenda. As well as setting out a polished, high-level strategy or signalling a change in objective, what are they actually doing on the ground to demonstrate the genuineness in their purpose, via tangible actions, performance and capital allocation?

The best examples have their purpose flowing clearly right throughout the organisation and its culture.

IFAM: WHAT DO YOU BELIEVE WILL BE THE KEY FACTORS AND DRIVERS OF GROWTH FOR ESG IN THE YEARS AHEAD? BCM: I think a continuation of these broad drivers, including regulation and societal preferences, will drive the long-term growth of ESG investing - and increasingly impact investing too.

ESG integration is now (rightly) expected as standard for all investments. Investors are no longer just seeing ESG as a risk that needs managing, but as a positive opportunity too.

There is growing recognition that we can invest for positive impact – to address the challenges facing the planet and its people, while patiently pursuing financial returns.

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There is also mounting recognition amid the accelerating climate and other crises that we need to rethink how the economy is set up. To address climate change and environmental degradation, we need to move towards a more circular economy, where inefficient production and consumption models give way to those where materials are reused, repurposed or recycled and where waste is can be used as a valuable resource in a closed loop system.

Businesses and industries that embrace this will be well positioned. I expect this to align with a need for solutions to address the growing focus on nature and biodiversity, on which the global economy is fundamentally dependent.

As we are now in the Decade of Action to achieve the UN’s Sustainable Development Goals (SDGs) by 2030, there is an urgent imperative to address society’s greatest challenges, with sustainable and impact investors having a crucial role to play. Guided by the SDGs, these investors can help galvanise efforts to raise impact capital and to mobilise it in a targeted, measurable way towards these solutions.

For financial advisers only. Not for onward distribution. No other persons should rely on any information contained within.

This financial promotion is issued by M&G Securities Limited which is authorised and regulated by the Financial Conduct Authority in the UK and provides ISAs and other investment products. The company’s registered office is 10 Fenchurch Avenue, London EC3M 5AG. Registered in England and Wales. Registered Number 90776.

The value and income from 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. There is no guarantee that the fund will achieve its objective and you may get back less than you originally invested.

While we support the UN SDGs, we are not associated with the UN and our funds are not endorsed by them.

About Ben Constable-Maxwell Ben Constable-Maxwell is Head of Sustainable and Impact Investing, leading M&G’s strategy on impact investing as well as covering sustainability issues such as climate change and the circular economy. He has been central to the development of ESG integration within M&G’s investment processes and has supported the development of ESG solutions for clients across asset classes. Ben plays an active industry role as a member of various sustainable and impact investment initiatives, interacting with companies, policymakers, NGOs and other investors.

He is a Trustee at Firefly International youth organisation, which provides educational and mental health support for young people in conflict-affected areas in the Balkans and Middle East. Previous to joining M&G in 2003, Ben spent four years with the Equities team at Invesco Perpetual. Ben has an honours degree in Classics from the University of Newcastle-upon-Tyne.

I FAmagazine.com

FOR PROFESSIONAL INVESTMENT SPECIALISTS

MAGAZINE

TOMORROW IS NOW A P R I L 2 0 21

GOVERNMENT BACKED - GREAT BRITISH INVESTMENTS - EIS - SEIS - BR - SITR - VCT

M AGAZINE

April 2021

NOVA

BETTER TOGETHER Introducing Georgia Wheadon, Founder of Umii

Nova is an EIS and SEIS fund provider with a difference.

Its pioneering Nova Cofoundery was started in 2008 to build successful startups with ambitious tech founders - such as Georgia Wheadon, Founder of UMII. Here we talk to Georgia about her business and its development and find out how the support of Nova has made such a difference to its overall success

GBI: COULD YOU START BY EXPLAINING TO US EXACTLY WHAT DOES UMII OFFER?

GBI: SO WHAT WAS LIFE LIKE FOR YOU BEFORE UMII?

GW: Very simply it is a well-being app. It’s designed to prevent social isolation and to help students at college or university to build friendships.

GW: Back in 2018 I was studying Human Geography and Sociology at Leeds University, and secured a placement at Nova (Nova Cofoundery Ltd). It was the first time that I got involved with start-up businesses, and I absolutely caught the bug. I then left university the following year and Nova was good enough to offer me a full-time role as a product manager.

Somehow, people seemed increasingly reluctant to introduce themselves to others face to face, whether in coffee shops, the union, or the library. There is a lack of social confidence. The app provides a safe digital environment for students to connect.

The Umii app is built on shared interests and personality traits, so that there is every chance that a friendship can be formed.

We see it as a way to reduce the number of drop-outs from university, with all the heartache and waste of resources that this entails.

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GBI: WHAT GAVE YOU THE IDEA FOR THE BUSINESS? GW: The original idea of the Umii app wasn’t mine but it was a concept that I completely empathised with. In my first year at university, I had a real issue with loneliness

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April 2021

NOVA

and isolation. I didn’t click with my flat-mates, and found it hard to build friendships. It was so bad that I nearly dropped out. So when the original founder of Umii resigned and I was offered the opportunity to become a shareholder and director and to take the company forward, I jumped at it. I was really encouraged by Nova to ‘go for it’ and it has turned out to be the best time of my life!

The original idea of the Umii app wasn’t mine but it was a concept that I completely empathised with

pandemic. It has also made universities much more aware of the issue and that has made them more interested in talking to us.

GBI: WHAT DIFFERENCE HAS NOVA MADE TO YOUR BUSINESS AND ITS DEVELOPMENT? GW: We would be nowhere without the support that Nova has given. It has encompassed a whole range of aspects including the creation of a board of Nova colleagues with different skill sets that include creating a business model, tech developments, marketing to students, planning for future funding, and wisdom in some of the key decisions we have had to make.

GBI: WHAT PROBLEMS AND CHALLENGES DID YOU FACE IN SETTING UP THE BUSINESS?

GBI: AND WHAT DOES THE FUTURE LOOK LIKE FOR UMII?

GW: The biggest challenge was the concerns that universities have for student safety. The last thing that they want is to have an app that opens students up to scammers, or others that are trying to take advantage of the students. It has meant that the quality of our verification process has been absolutely critical. The other recent challenge we’ve had is that prospective students with conditional offers want to start engaging with like-minded people before they actually start at university. This opens up further security issues. Both of these challenges are being worked on.

GW: We are very excited about our future prospects. Our partnered universities can’t believe the impact that Umii has had! One university saw nearly 1400 users in the first 4 months and over 17,500 messages sent between their students. 52% of survey respondents at another university said Umii made them feel less isolated and lonely. There have now been over 12,500 individual connections made on the app…and these are growing fast.

We would be nowhere without the support that Nova has given

GBI: WHAT ABOUT THE COVID-19 PANDEMIC? HAS IT HAD ANY SIGNIFICANT IMPACT ON THE DEVELOPMENT OF YOUR BUSINESS? GW: Yes indeed it has. The pandemic has had a significant impact in 2 important ways. Before Covid-19 arrived, around 50% of students admitted to loneliness, and this has only got worse under the restrictions resulting from the

GB Investment Magazine

We have had our first US university wanting to talk to us later this year and we are also interested in taking this concept to Australia.

Here in the UK we are also planning to target colleges and some new product developments. This includes the ability to signpost events, and also for the selective promotion of branded products.

GBI

The Nova view ‘Georgia has taken to her leadership role like a duck to water. With her own experiences of what students need, she has identified very strongly with the needs of both the students and the universities. It is a need that is self-evident and it is exciting to be part of the solution.’

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April 2021

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TAX YEAR-END P L A N N I N G C O N S I D E R AT I O N S

With the end of the tax year in sight, Blackfinch’s Sarah Hendy reminds advisers of some of the key considerations to be aware of when discussing Venture Capital Trusts (VCTs) and the Enterprise Investment Scheme (EIS) with clients and product providers

ASK WHEN INVESTMENT FUNDS WILL BE DEPLOYED While both the EIS and VCTs allow investors to claim up to 30% of income tax relief, only an EIS lets investors ‘carry back’ relief and reclaim income tax paid in the previous tax year. If your client intends to make use of ‘carry back’, it’s important to determine not just when your client plans to make their investment, but also when the product provider will deploy those funds. Carry back can only be applied to tax paid in the previous tax year, so the EIS manager needs to deploy funds in the current tax year in order for income tax relief to be allocated to the current and/or the previous (2019/20) tax year.

If your client intends to make use of ‘carry back’, it’s important to determine not just when your client plans to make their investment, but also when the product provider will deploy those funds

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Next, it is also well worth asking the EIS manager whether they are capable of making investments in the current tax year or whether the clients’ money will be invested across different tax years, which could impact any tax planning considerations you have discussed with your client. In addition, when it comes to EIS and tax year-end, discussing diversification with EIS providers is crucial. Many providers will practice diversification by targeting at least eight companies for your client’s investment to be spread over – so that exposure to any one investment is limited. But when you ask providers how many of these companies will be invested ahead of the tax year-end, this can often be as low as just four.

OFFSETTING INCOME TAX FROM OTHER ASSETS For clients considering either a VCT or EIS investment to offset income tax paid when converting another asset into cash (such as encashment of an offshore or onshore bond) it is important to understand whether the encashment could potentially see their taxable estate exceed the combined nil-rate band/residence nil-rate band – triggering a potential 40% inheritance tax (IHT) liability.

If this is a factor, and the client is suitable, then EIS might be the better option. Not only could an EIS investment help offset the income tax due but, after the investment has been

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held for two years, it could also have the added benefit of IHT relief via qualification for Business Relief.

DEFERRING A CGT LIABILITY While an EIS is able to offer capital gains deferral, and therefore capital gains tax (CGT) deferral, the gain cannot be deferred until the client receives their EIS3 certificates.

Investors must complete the claim form attached to the EIS3 certificate received from the company they have invested in, and attach the form to the CGT summary pages of their self assessment tax return.

Also, an EIS3 certificate will be issued for each underlying trading company within the EIS, not just one certificate to cover the entire amount invested. Therefore, certificates may all be issued at different times. In all cases, a client should expect to pay their CGT and then submit their EIS3 certificates once they have received them if this is after the corresponding tax return has been submitted.

Your clients may be looking to defer a capital gain, but given they have up to three calendar years to invest in EIS from the date they make that gain, they may be able to take advantage of combining CGT deferral with income tax relief. In cases where the client does not have a sufficiently large income tax liability in one particular tax year to benefit from this relief fully, a strategy of investing in EIS across different tax years, although still within the threeyear period, may prove beneficial.

NEW VCT OR OLD VCT? As a reminder, VCTs were created to encourange greater investment flow into smaller UK companies – to support the growth of the UK economy and to incentivise investors to place money into companies with the potential for high returns. Within the market, there is a significant number of VCTs currently available, most of which have a unique investment strategy, different diversifications (and dilutions) as well as different fund sizes.

Established VCTs have the benefit of past performance (some better than others) and the potential for regular dividend payments. For those established VCTs that have had favourable returns, the implication arises that this will continue, and they often raise further funds on the back of this assumption. However, could one argue that as a VCT

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Although investing in newer VCTs may not result in regular dividend payments for several years, many will look to target special dividends through earlier exits grows, and its shares become more diluted, is the potential for high returns at risk of being diluted away? It may not be that simple, but perhaps older VCTs would be more suitable for those clients looking to supplement their regular income, while younger VCTs may be more appropriate for those seeking that higher risk/higher return investment profile.

Although investing in newer VCTs may not result in regular dividend payments for several years, many will look to target special dividends through earlier exits. A blend of different types of VCT would help diversify portfolio risk, while also offering the potential to deliver high returns to those investors interested in putting risk capital to work over several years.

Ahead of tax year-end, having a good awareness of the subtle, yet important, tax planning differences between VCTs and the EIS will certainly help ensure clients take full advantage of the available tax reliefs.

GBI

Capital at risk Sarah Hendy is Strategic Partnerships Manager at Blackfinch Group.

With over 30 years’ experience in the commercial and financial services sector, Sarah joined Blackfinch in 2014. She started her career in banking before joining the public relations department at the UKs leading flight simulator company. After a period overseas, Sarah then spent 12 years working in London in property & media before focusing her career on business & relationship development. Sarah has completed the PRI Academy ‘Foundations in Responsible Investment’ course and holds a Tax & Estate Planning Accreditation which includes a Certificate of Knowledge & Understanding in BR, EIS & VCTs. To find out more about the Blackfinch Spring VCT or EIS Portfolios, see: blackfinch.ventures Or get in touch to discuss further: Call - 01452 717070 Email - enquiries@blackfinch.com

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April 2021

N EWABLE

THREE REASONS WHY NEWABLE'S

SCALE-UP FUND SHOULD BE PART OF YOUR CLIENT’S EIS PORTFOLIO Alex Sullivan, managing director of GBI Magazine, sat down with Sanjeev Gordhan and Avantika Gupta from Newable Ventures to discuss what makes the business unique

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efore joining Newable in 2018, Sanjeev had his own client bank at a national wealth management firm and sat on an investment committee's EIS panel. Avantika joined the Newable Ventures team in 2019 with a background in life science commercialisation and investing.

Together Sanjeev and Avantika helped share how they bring their perspectives to the table at Newable Ventures.

Sanjeev approaches his role as Ventures director with financial advisers in mind. He acknowledges it can be difficult for advisers looking at EIS, especially when researching the underlying investments in a given fund. EIS helps unlisted companies, so it’s essential that advisers understand the investment decisions made by a fund manager.

That's why Sanjeev thinks EIS fund managers have to make an extra effort to enhance transparency.

Sanjeev shared an example of the kind of transparency Newable has. Whenever Newable places an investment and it’s gone past the investment committee for approval, Newable sends out a vote call to all of their investors.

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Every £5,000 gets an investor a vote, and though it's not binding, it serves as a communication tool and a temperature gauger.

In the vote call, Newable's investment directors and analysts will write to investors, let them know the underlying investment, why they think it is a good idea, and the problem this product is trying to solve.

To date, Newable hasn't had a single majority no, and the process allows investors and advisers to engage with the funding journey.

Sanjeev said on this "These types of steps help Newable increase transparency in the market and make sure investors are on the journey with us."

Avantika is a highly experienced project manager with a background in the commercialisation of life sciences, which makes her well fitted for the Associate Investment Director role.

Newable's Scale-Up Fund follows a strategy in line with the expectations of the fourth industrial revolution.

The term was popularised at the World Economic Forum and stipulates that soon there will be a blurring of the lines between the biological, physical, and digital worlds.

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Avantika mentioned that, over the last year, so much interaction has been happening online, with lots of data generated not from just human to human interaction but from machine to human and machine to machine interaction.

Avantika gave the example of the Internet of Things (IoT) technology, saying, "IoT has been in the media for the best part of ten years, but it’s now starting to materialise."

of investment houses, and they are active during the due diligence assessment process.

Depending on the type of investment, Newable will match the experience of an individual committee member with the investment director to help on that project.

DIVERSIFICATION

IoT utilises data gained through objects to optimise physical environments, creating 'smart' spaces that can respond to, or even predict, human action.

Clearly, the most integral pull to any fund is the fund itself.

The Newable Scale-Up Fund provides focused exposure to tech but across multiple sectors.

During the conversation, Alex asked Sanjeev for three reasons why Newble's scale-up fund should be part of an advisers EIS portfolio. His response is detailed below:

Avantika explained the fund as having a broad remit, but at the same time having a narrow focus on the aims and strategy.

THE WIDER NEWABLE GROUP

The fund strictly supports pre-series-A businesses, usually post-seed, with a deep tech focus. Newable's aim is always to get companies to a series A readiness.

Newable is not simply an EIS fund; it also provides professional support, advice and workspaces to pre-series A start-ups. Sanjeev commented, "at this end of the market, it’s crucial we can support the start-ups by providing a whole raft of services."

Newable has 60 flexible workspaces across the UK, from Southampton to Aberdeen. This alone has left Newable uniquely placed to adapt to post-pandemic working habits.

The support Newable provides goes full circle to the investor; the better they can support their businesses, the more successful the investee companies are which leads to higher valuations and returns for investors.

Newable’s advice team can help a business expand into different territories or extend research and development.

INDEPENDENT INVESTMENT COMMITTEE With a combined experience of over 120 years, Newable’s 6 member independent investment committee is one of the key elements that makes the firm unique.

The committee is made up of investment professionals who represent multiple later-stage funds or other types

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Avantika explained the fund's approach is sector agnostic; they tend to look at investments from the viewpoint of converging technologies.

That could be a biology and data meeting, or manufacturing and life sciences or life sciences and materials.

Avantika and Newable look for companies that are disruptive on those borders, and able to demonstrate some customer interest, and have demonstrated market pull for that technology.

To watch the full interview please click here https:// ifamagazine.com/article/newable-helps-to-demystifyeis-for-advisers/ GBI

About Sanjeev Gordhan Sanjeev became Director of the Newable Ventures arm in May 2020.

He is responsible for the strategic focus of the fund and angel network as well as its day to day management. Sanjeev started as an entrepreneur before going onto selling his own business, and spent five years as a Wealth Manager specialising in venture capital. He holds a diploma in Regulated Financial Planning and an MBA from CASS Business School.

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April 2021

ADVE RTORIAL

CLIENTS LOOKING FOR

HIGH GROWTH INVESTMENT OPPORTUNITIES

This planning scenario explains how the Octopus Ventures EIS Service could help clients diversify their investment portfolio, whilst benefitting from a range of valuable tax reliefs

ABOUT THIS SCENARIO This tax-planning scenario is designed to help advisers develop appropriate planning strategies for their clients. Advisers should consider, among other things, the value of tax reliefs for their client. You will also need to consider the impact of charges (including initial fee and ongoing fees, such as annual management charges) relevant to the products represented and/or any specific product you have chosen. Nothing here should be viewed as advice.

Any suitability decisions should be based on a comprehensive review of your client’s objectives, needs and attitude towards risk. For more details and information about the associated risks, please see the relevant product literature available at octopusinvestments.com.

MEET DAVID, WHO WISHES TO DIVERSIFY HIS INVESTMENT PORTFOLIO INTO HIGH GROWTH OPPORTUNITIES David, 50, is a director in his firm, and a high earner with a salary of £170,000 a year – on top of which he receives a bonus. This year, the bonus is £120,000. Normally, he invests part of his bonus in long-term investments.

Every year he utilises his annual pension allowance, and has previously invested twice in Octopus Titan VCT – the largest venture capital trust in the UK1.

This year he would like to use part of his bonus to diversify his long-term investments, and is looking for something that feels more exciting with the potential for high growth. He understands that investments with significant growth potential are typically high-risk.

In addition to targeting significant returns, David is also passionate about helping small businesses succeed. So, he is keen to use this money to help fund some innovative companies, whilst being part of their growth story.

Association of Investment Companies,30 September 2020.

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AN EIS SOLUTION FROM OCTOPUS David talks to his financial adviser, who makes an assessment based on David’s objectives, risk appetite and attitude towards small company investing, and recommends the Octopus Ventures EIS Service.

The adviser explains that this investment will provide David with shares in 10-15 exciting, early-stage businesses, each selected for their potential to grow by ten times over the next five to ten years.

David knows Octopus from his previous investments in Titan VCT, and that Octopus has backed, supported and exited some extraordinary rising stars which are now household names (including Zoopla, Graze, Secret Escapes and Tails.com).

His adviser explains that investing in companies aiming for such high-growth is high-risk, and not all early-stage companies succeed. However, to provide an incentive for the risk involved, there are valuable tax reliefs that David could receive.

David is able to claim 30% tax relief on his investment, which is available to offset against his income tax, such as the tax on his bonus. Where a company in David’s portfolio achieves the high growth targeted, it will be free from capital gains tax. His adviser explains that where a company fails, David would be able to claim loss relief against income tax or capital gains – even if his portfolio has increased in value overall. As David is an additional rate taxpayer, he could claim loss relief at his marginal rate of tax of 45%.

His adviser explains that this can mean that an EIS portfolio is a very attractive way to make high-risk investments in smaller companies in the pursuit of growth.

David chooses to invest £100,000.

AN IMPORTANT REMINDER ABOUT KEY RISKS

• Tax treatment depends on individual circumstances and may change in the future. Tax reliefs depend on the portfolio companies maintaining their qualifying status.

• The shares of smaller companies could 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.

HOW DAVID’S INVESTMENT IN OCTOPUS VENTURES EIS SERVICE WORKS Income tax relief on investment • After Octopus’ initial fee and an initial dealing fee have been paid, David will invest £97,030.

• For simplicity, we have assumed David’s money is invested into five EIS-qualifying companies, each of equal weighting in his portfolio. In reality Octopus Ventures EIS Service portfolios are expected to contain 10-15 companies and the amount invested into each company may vary.

His adviser ensures David is full aware of the risks of making EIS investments

• He claims 30% income tax relief totalling £29,110 (£5,822 per company).

• The service is high-risk and should be considered as a long term investment. The value of an investment can fall or rise.

Investors may not get back the full amount they invest.

• David is entitled to claim this relief in the year the investment is made into each EIS company, or could choose to carry it back to the previous tax year.

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• As Octopus will invest into early-stage opportunities as they arise, all of David’s investments may not be made in the tax year in which he subscribes to the portfolio.

• He chooses to set this against his income tax bill for the current year. This reduces the £54,000 tax bill on David’s £120,000 bonus to £24,890.

David’s investment journey • Some of the companies in David’s portfolio benefit from strong performance over the next eight years, with two delivering very attractive growth when they are sold.

One company never achieves success and simply returns the amount David invested when it is sold, and two fail completely, losing all of David’s capital. Overall, David’s £100,000 investment in the service returns £271,684 of proceeds when each company is sold.

• David chooses to offset the effective losses of £27,556 against his income in the tax year each loss occurred.

As an additional rate tax-payer, he obtains relief at 45% totalling £12,400.

• Importantly David is entitled to claim this relief despite his overall portfolio generating positive returns.

• Also, because Octopus’ AMC and performance fees are only paid where a company is sold for more than the amount invested, David does not pay a performance fee or any of the AMC that has accrued on these companies.

GBI

Capital gains tax-free growth on the “winners” • Of the two companies in David’s portfolio that perform very well, one grew by three times the amount David invested and one grew by ten times. This means that of £38,812 invested in these companies, David receives £137,762 after paying Octopus fees.

• The gains made on the sale of these shares are tax-free. Had the shares not been EIS-qualifying he would have owed a total of £42,111 in capital gains tax at his marginal rate of 20%.

Loss relief against income compensates for the “losers” • Over the years, two of the companies in David’s portfolio fail to prosper, and all of the capital that David invested into them is lost.

• David is entitled to claim loss relief in respect of his effective loss, which is the dealing fee plus the amount he invested into each company (£19,600) less the income tax relief claimed (£5,822). This amounts to £13,778 on each failed company.

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April 2021

SI DE BYSI DE

DEMYSTIFYING THE

COSTS OF EIS Ever wonder what some EIS fund Managers aren’t telling you?

GBI Magazine’s Alex Sullivan spoke to James D’Mello, The SidebySide Partnership, to dig down into the nitty gritty of the Enterprise Investment Scheme and give you and your clients the inside edge on fees and charges PERFORMANCE FEES Performance fees are simply fees on performance, but managers charge them in different ways. Performance fees can be charged against the overall portfolio or against individual investee companies.

The first structure means a fund manager will charge a fee on your client’s investment, while the latter means a fee will be charged on the profits from each company as they exit.

These structures means a client can have two very different investment outcomes from the same investment journey.

Theoretically, when performance fees are charged against individual companies in an EIS portfolio of ten companies, where nine failed and one made a five times return, your client would be charged on that one exit, despite making an overall loss.

PERFORMANCE HURDLES A performance hurdle is a hurdle over which performance fees are charged. This means that if a fund manager returns over a set percentage through an exit, they will charge your client performance fees for it.

Performance hurdles are crucial for advisers and investors to understand because charges can apply on modest returns, after inflation and other fees, leaving the client with overall negative returns on a long term investment.

It’s also important for advisers to know two things about performance hurdles. Firstly, if a fund’s performance hurdle is a net profitable return, make sure that's on 100% of the investment not 70%. The 30% tax relief on investment usually isn’t factored into performances fees, but can be and can make a big difference to your client.

Secondly, there are a lot of funds that have performance hurdles and there are some that don’t. It is worth factoring that into your due diligence. Performance fees will have an effect on your client’s returns.

The 30% tax relief on investment usually isn’t factored into performances fees, but can be and can make a big difference to your client

These fees can range from 20-35% and they can serve to align a fund manager’s interest with your client’s.

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HIDDEN FEES Fees will always be presented in different ways, but if you convert them into a percentage they can add up quickly.

Most fund managers will say they won’t charge your client fees directly and a lot funds can charge fees to their investee companies. This means that whatever a client invests into the fund, 100% will be available for tax relief purposes, but if the company comes to sell it will still come off the client’s returns.

CoInvestor, along with the EIS Association has published a report revealing thirty six different words managers used for fees and charges. No wonder there is confusion!

Fees can also be absent from a fund manager’s investment memorandum.

Another important question for an adviser to ask is if the fund manager has an uncapped structure.

With all of these potential fees its important you ask the fund manager and do your due diligence to ensure that you have a full picture of the costs that are likely to impact on your client’s overall investment return.

There is a big difference between an internally given valuation of a business and an externally given valuation

INTERNAL VS EXTERNAL VALUATIONS Business valuations are a key part of the EIS industry.

There is a big difference between an internally given valuation of a business and an externally given valuation.

Managers can work company valuations two ways.

Some will only change a company’s valuation at the point of an external investment coming in or a third party revaluing the company through a typical audit process.

The other way is for fund managers to internally value the companies themselves. Funds that don’t have highly qualified members in their team to do valuations, and still

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do them, can lead to difficulties for an adviser who has to manage their client's expectations.

IS TAX RELIEF INCLUDED IN MY CLIENT’S RETURN? Tax relief is a by-product of EIS and VCTs. If a manager deploys funds into a company under EIS then they qualify for tax relief.

Some managers include that tax relief in their returns forecast which can mean that for example, a target return of 3x is actually only a target return of 2.1x when you take out tax relief. This could affect an advisers recommendation and should be included in the suitability report.

As with all the issues raised, the best way to find the answers is to ask your fund manager, or, of course, you can always ask James D’Mello himself.

WHO ARE THE SIDEBYSIDE PARTNERSHIP? SidebySide specialises in investments into later-stage EIS businesses already producing over £1m of revenue, helping to mitigate the start-up risk prevalent in a lot of EIS investments.

During the conversation with GBI Magazine, James was eager to highlight that SidebySide is on the right side of all the topics covered above and that he is happy to talk to advisers about them.

Watch the interview on https://ifamagazine.com/article/ what-are-the-hidden-fees-in-tax-efficient-investments/

GBI

About James D’Mello James has over a decade’s financial services experience from a range of specialisms including banking, pensions & investments.

During his time working at one of the major platforms, James oversaw around 5000 EIS transactions, giving him a very unique, behind-thescenes insight into the EIS industry.

Today, James is Head of Business Development at SidebySide, where he joins a management team responsible for over £1.1bn in exits to date.

Email James at; james@thesidebysidepartnership.com

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April 2021

E ISA

CAPITALISING ON

CALMER WATERS EISA’s Mark Brownridge gets his telescope out and looks at what might lie ahead for EIS and SEIS

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hilst the Budget passed without a single mention of EIS or SEIS, there was however some insight into how the Government may transition from fostering recovery to fostering growth within the “Build, Back, Better” document that accompanied it. This document did mention EIS and SEIS, albeit in passing, but this was certainly an acknowledgement that the schemes have an important part to play in future plans and are not being ignored.

rebuild and strengthen their ships, get back out on the waves and capitalise on calmer waters?

But let’s not worry. Firstly, as has been abundantly apparent for some time now, EIS and SEIS are fully focused on growing and developing businesses. Whilst the Government is more concerned with saving and propping them up, it’s easy to understand why the schemes aren’t being talked about. For now, at least.

More recently the Chancellor pronounced in the House of Commons as recently as December 2020 that the “world beating EIS and SEIS programmes provide significant support for private investors to help fund new businesses and we look forward to hearing thoughts on how to expand those schemes”.

As we slowly move out of the pandemic (fingers crossed), economically attention moves away from recovery mode i.e. simply keeping companies from going out of business by making access to loans and grants much easier, to growth mode i.e. now these companies have survived, how do we get them back on that growth path that they were following preCovid so they can expand, develop and increase revenue staff and the other usual key business growth metrics.

What could some of those expansions look like? Well, EISA have lobbied for a raise in the SEIS limit from £150,000 to £250,000, an abolition of the rule that restricts companies more than 7 years being eligible for the relief and an increase to the limits on how much a company can raise both annually and over their lifetime.

To use a simple Jonathan Van Tam style analogy, the pandemic has been a perfect storm for many businesses (particularly hospitality and retail) who have been rocked by strong waves and appalling weather, some sunk but others with the help of Government funding and loans have made it to shore, battered but intact. Now these businesses have reached a safe harbour, how do they

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REBUILD AND STRENGTHEN And it’s rebuilding and strengthening where we believe EIS and SEIS can play a significant part. The Government has already signalled its intentions towards the schemes as announced in the Tory manifesto.

From the Government’s Building Back Better document, it’s clear it particularly wants to focus attention and funding on certain sectors. The majority of those sectors are smack bang in the sweet spot of where EIS and SEIS is already focused, specifically, Net Zero, Impact Tech, Artificial Intelligence, Fintech and Deep Tech.

The recent Tech Nation report identified that the UK’s tech sector is growing 6 times faster than the rest of the UK economy combined; is valued at almost $600bn (double

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that of our nearest competitor, Germany). The UK also has more than 80 unicorns headquartered around the country.

the EIS and SEIS schemes aren’t classified as subsidies so aren’t part of TCA.

These companies are already driving our economic recovery (5 unicorns in the tech sector have already been created in 2021) and will continue to shape the society of the future. The tech sector already employs almost 3 million people and creates both high value tech and non-tech jobs.

The UK has announced it will introduce its own subsidy regime and are currently consulting as to the best way of doing this. Add to all this that whilst the UK has repealed all EU State aid regulations from the UK domestic law from 1 January 2021, it is necessary to retain them for the purposes of the Protocol on Ireland/Northern Ireland. This keeps Northern Ireland under most EU State Aid restrictions and means any relaxations to EIS and SEIS are unlikely, at least in the short term.

Funding this sector has to be a priority. Speak to any tech entrepreneur and they will quickly and vocally tell you how important EIS and SEIS was and will continue to be for their business as only equity funding supports fast and effective growth. Debt funding keeps the engine ticking, equity funding supercharges the engine! So keep an eye out on fiscal announcements and budgets later this year.

TALKING TAX Lately, we have seen rumours swirl around a number of tax options. A Wealth Tax had backers for a while but seems to have lost support. The Independent Wealth Tax Commission (doesn’t sound very independent!) suggested a wealth tax on all individual wealth above £500,000 and charged at 1% a year for five years would raise money from those least affected by the pandemic.

Traditionally, Tory Governments have veered away from these types of tax rises but they are popular abroad. CGT rises have also been mooted, in particular aligning CGT rates with income tax rates. This is a double-edged sword as it would most certainly affect founders and entrepreneurs when they come to exit their business and penalise a group who already get little in the way of reliefs either at the inception of the business or at the end.

However, it probably makes EIS a more attractive investment as investors seek to utilise CGT deferral to invest gains made from other investments. There is also a suggestion that IHT could be in the crosshairs. Again, given EIS has IHT reliefs, this may have an effect on the schemes and given the nature of the recommendations on IHT already made, any changes are likely to beneficial.

EU STATE AID Thirdly, although EIS and SEIS no longer come under auspices of EU State Aid, the schemes are in somewhat of a no man’s land. Whilst the Trade and Cooperation Agreement (TCA) agreed with the EU has a subsidy regime,

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Why is this third point important? The EIS and SEIS legislation comes (or came) under EU State Aid legislation which means whilst we were part of the EU, the UK had to abide by EU legislation relating to the scheme and had no independent mechanism for making any changes we would like to make. Remove the EU from the situation and all of a sudden we become masters of our destiny again and potentially have the ability to make as many changes as we like to the schemes, including increasing tax reliefs and limits or removing unhelpful conditions. So whilst it might take a while to work through what changes would be most beneficial to the UK, we do at least now have the power to do so.

So, the omens are good. The UK has the power to make substantive changes to the scheme now we have left the EU. It has the incentive to make substantive changes in terms of fostering and nurturing a tech start and scale up economy and we also have the technical ability to make substantive changes with proposals to radically alter the tax environment. The question now is whether it is prepared to rise to the challenge and embrace such changes.

GBI

About Mark Brownridge Mark has over twenty years’ experience in financial services and prior to becoming Director General of the EIS Association, he was Head of Research and Development at Mazars, a leading UK financial planning firm. Mark is highly qualified being a Certified Financial Planner, Chartered Financial Planner, Chartered Wealth Manager and Fellow of the PFS and also sits on the CISI’s Accredited firms committee and TISA’s Distribution Policy Council. Mark’s involvement with EIS began 8 years ago and he has since championed EIS investing within a financial planning context and is extremely passionate about promoting the industry, increasing its effectiveness and ensuring the private sector continues to drive much needed funding to small companies.

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GBI OPEN OFFERS A selection of tax efficient opportunities currently open for investment 40

GB Investment Magazine

Open Offers

EIS

SEIS

Open

Open

Evergreen

Evergreen

Amount to be Raised:

Uncapped

Nova Cofoundery SEIS & EIS Fund Members of the Nova team have spent the last 10 years developing their cofoundery model which we believe addresses 5 of the most common mistakes made by startups.

The Fund is intended for those UK tax paying individuals:

Minimum Investment:

£10,000

• Seeking a diversified exposure in a highly concentrated asset class to knowledge intensive companies in the UK • With income tax liability in the preceding or current tax years • With large capital gains to defer or mitigate • Who look to benefit from IHT relief

T. 0151 318 0761 E. alistair@novagrowthcapital.co.uk www.novagrowthcapital.co.uk

The minimum individual investment in The Fund is £10,000. At the Investment Manager's discretion, smaller individual investments may be accepted, however, this is not guaranteed.

The selection of investee companies and the subsequent allocation of investor’s subscriptions to the investee companies are made at the discretion of the Investment Manager with guidance from the Investment Advisor.

Highlights An engaged hands-on approach from an experienced startup team • Free of manager fees to the investor for subscriptions received via a financial adviser, facilitating 100% deployment of investor funds and aiming to ensure maximum tax efficiency for the investor • All SEIS and EIS tax advantages applicable, depending on personal circumstances and subject to HMRC approval • Target return of 172p for every 100p invested (Not including EIS or SEIS reliefs) • Performance fee aligns our interests with the investors

EIS

SEIS

Open

Close

Now

Multiple

Amount to be Raised: Evergreen

Minimum Investment: £10,000

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 smallbusiness.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 almost 3,000 applications to date

T. 07768571271 E. pauls@worthcapital.uk worthcapital.uk

• 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 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 retail investors take professional advice before investing.

EIS Open

1st March 2020

Close

Evergreen

Amount to be Raised:

Seeking to raise up to £30 million per annum

Minimum Investment: £25k

T. 0161 641 9475 E. ventures@praetura.co.uk www.praeturaventures.com

GB Investment Magazine

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 are an active fund manager and work 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, and the next soft close is 31st March 2021. 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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EIS Open

Close Evergreen

Amount to be Raised:

£10m+ this year

Minimum Investment: £10,000

Haatch Ventures EIS Fund Haatch Ventures is an award-winning EIS Fund offering full deployment into 4-6 new investee companies per tranche.

The Haatch Ventures EIS Fund is managed by four successful entrepreneurs who have between them founded, grown and sold businesses worth over $150 million.

The fund aims to back four to six early-stage digital transformation businesses in sectors the team knows well, such as software-as-a-service, on-demand, gig-economy and digital consumer.

The team invest where they believe they can use their considerable experience to add value. Haatch refers to this as its ‘Smart Money’ approach.

T. 01780 408487 E. fred@haatch.com www.haatch.com

EIS Open

Close

March 2012

Evergreen

Amount to be Raised: £10m - £25m per annum

Minimum Investment: £20,000

T. 0131 556 0044 E. pauline.cassie@parequity.com www.parequity.com

“The Fund has a target return of 10x which is significantly higher than any other SEIS or EIS fund currently fundraising and listed on MICAP, and the track record of Haatch Angel somewhat supports the ambition of this target.” – MICAP.

Par EIS Fund Recognised as "highly commended" in the 2020 EIS Association Awards for Best EIS Fund Manager.

Across 22 realisations made to date, Par is demonstrating strong and consistent returns to investors.

Par Equity is a leading EIS fund manager, investing in innovative, high growth technology businesses across the north of the UK. We harness the expertise and contacts of our Par Investor Network and wider contacts to create a distinctive, operationally focused investment model that benefits both investors and entrepreneurs.

The Fund is focused on innovative companies. These are companies which are developing new technologies for sale or using advances in technology to disrupt existing markets. Par Equity has invested in companies operating in areas such as software, public health, e-commerce, social media, consumer electronics, photonics, technical textiles and medical devices. The unifying characteristic of Par Equity’s portfolio is therefore the importance of innovative technologies to the investment case underpinning each commitment of capital. In building the investment case, Par Equity draws on the experience, expertise and contacts of the Investment Team, but also the resources of individuals within the Par Investor Network. In this way, Par Equity can make informed decisions across a range of sectors, providing the potential for Investors, over a series of Subscriptions, to gain exposure to a diverse range of growth-oriented investments.

Strategy for the Fund: • Focused on early stage technology companies with high quality management teams addressing global markets • 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: as at 31st December 2020 • 85+ years experience in EIS. • 247 EIS qualifying investments • 61 companies backed • £84m invested by Par leveraging a further £135m • 9.8 months average time taken to full deployment into 8 companies • 96 days EIS3 • 22 realisations

EIS Open

1st February 2020

Close

Evergreen

Amount to be Raised:

£20m raised, uncapped Minimum Investment: £25k

• 3.8x money multiple (before tax relief)

• 27% IRR

• 4.5 years average holding period.

Scale Up EIS Fund This is Fuel Ventures flagship EIS fund that we have been investing from for 5 years. We invest into 10-15 technology companies each year, with a focus on businesses that are marketplaces, platform or software. We now have 40+ portfolio companies and after 5 years our first fund has an average multiple uplift of 5.6X, validated by external fundraising rounds.

We have an advisory committee with over 50+ year’s experience and exits totalling £3bn+. We put a Director on the Board of every company we invest in and take an active and hands on role in the management and development of each company, plus bring added extra value through our network of sector experts. As a team, we invest 5-10% in total in every fund alongside our investors, which is £2m - £3m into the current fund.

T. +44 2038689723 E. investors@fuel.ventures https://fuel.ventures/

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GB Investment Magazine

Open Offers

EIS Open

Evergreen

Close

Evergreen

Amount to be Raised: N/A Minimum Investment: £25,000

Oxford Capital Growth EIS Established in 1999, Oxford Capital is an alternative investment manager passionate about investing in early stage technology companies. For over 20 years, we have offered private investors access to many high-impact technology companies in sectors which the UK is considered a world leader. We partner with portfolio companies and founders to help grow their businesses and deliver meaningful impact in their fields.

The Oxford Capital Growth EIS is an evergreen fund that offers investors the opportunity to invest in a portfolio of shares in early stage technology companies that have the potential to grow rapidly.

The portfolio of 8-12 companies provides exposure to sectors such as artificial intelligence and machine learning, financial technologies and future of retail.

We aim to invest in companies that are:

T. 01865 860760 E. investors@oxcp.com www.oxcp.com

• Run by credible, talented and highly driven entrepreneurs, founders and management teams • Solving commercial, technological and scientific problems in innovative ways • Businesses that have the potential to have a positive impact to the environment and on society We aim to fully invest each initial subscription within 12-18 months and exit most investments within 5-7 years. Capital at risk, unquoted companies are a high risk investment.

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

EIS Open

Evergreen

SEIS Close

Evergreen

Amount to be Raised: N/A Minimum Investment: £5,000

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 are brought to the platform, and the Investment Committee.

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 ixdes whole-of-market access to alternative and tax efficient investments for the clients of financial advisers, wealth managers and investors.

GrowthInvest - The Tax Efficient Platform for Advisers GrowthInvest simplifies research, investment and reporting on alternative and tax-efficient assets. Through our smart technology platform, we serve wealth managers, financial advisers, and their clients. Our core service offers: • A market-leading range of investment offers including EIS, SEIS, VCT, IHT and other alternative investments.

• Reporting on all alternative assets in one online secure portal (including the onboarding of historical assets) • An extensive library of educational materials alongside research from independent partners,

T. 020 7071 3945 E. enquiries@growthinvest.com www.growthinvest.com

• Digital administration solutions and innovative products, driven by client demand, such as our diversified VCT service.

• Personalised client service with an experienced team from institutional backgrounds: because technology is not always enough We have placed the adviser and their clients at the heart of everything we do. Contact us to discuss your specific requirements and for a demonstration of the future of alternative and tax efficient investing.

GB Investment Magazine

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EIS Open

Close

17 November 2020

n/a

Amount to be Raised:

n/a

Minimum Investment:

£50,000

Octopus Ventures EIS Service A new service from Octopus supported by Europe’s largest venture capital firm.

We created the Octopus Ventures EIS Service to give investors the opportunity to invest in 10-15 earlystage businesses with high growth potential (each targeting 10x growth), handpicked and managed by our expert investment teams.

The Octopus Ventures EIS Service could be suitable for those who want to target high growth from a long term investment, want to diversify their portfolio and those who want to directly own shares in exciting earlystage companies, providing they are comfortable with the risks of early stage investing.

We believe that there are three stages to achieving capital growth from investments in early-stage businesses, which our specialist in house investment teams are experienced at delivering: 1. Access to investment opportunities that have the potential to achieve high growth.

2. Effective nurturing and support of a business as it matures.

T. 0800 316 2067 E. support@octopusinvestments.com

octopusinvestments.com

3. The ability to manage a successful exit.

For someone investing on their own, each of these stages would pose a challenge.

We are fortunate that through 20 years of investing in smaller companies, we have established a reputation that means many talented entrepreneurs approach us with their ideas when they are looking for a first investment into their business. We also have access to an exciting range of follow-on investment opportunities in smaller companies seeking additional funding for further expansion.

Key risks to keep in mind • The value of an EIS investment, and any income from it, can fall as well as rise. Investors may not get back the full amount they invest.

• Tax treatment depends on individual circumstances and may change in the future.

• Tax reliefs depend on the portfolio companies maintaining their EIS-qualifying status.

• The share price of EIS companies may be volatile and they may be hard to sell.

EIS investments are not suitable for everyone. 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. We record telephone calls.

Issued: November 2020. CAM010471.

VCT Open

21 October 2020

Close

20 October 2021

Amount to be Raised: £120 million

Minimum Investment: £3,000

Octopus Titan VCT Since 2007, Octopus Titan VCT has earned a reputation for backing pioneering entrepreneurs.

Octopus Titan VCT is the largest VCT in the market, with over £900 million of funds under management1 and a diverse portfolio of around 80 companies.

Titan has a proud history of backing some of the UK’s most successful entrepreneurs, having made early investments in Zoopla Property Group, Secret Escapes and graze.com, among many others, and continues to provide backing to promising companies with the potential to become household names.

Octopus Ventures is the team that manages the investments in Titan, investing mainly in UK-based techenabled companies with global ambitions and the potential to grow quickly.

The team is one of the largest in Europe, and our network reaches from China to Silicon Valley from our base in London and office in New York.

Octopus Ventures backs pioneering entrepreneurs who are changing the world, focusing predominantly on four key areas: Future of Health, Future of Money, Deep Tech and Consumer.

T. 0800 316 2067 E. support@octopusinvestments.com

octopusinvestments.com

Having deep expertise in these key areas helps attract the best entrepreneurs, who tend to have a preference for investors who specialise in their sector. It also allows us to find the best opportunities in each area more efficiently while continuing to build specialist skills and expertise.

Key risks to keep in mind • The value of a VCT investment, and any income from it, can fall as well as rise. Investors may not get back the full amount they invest.

• Tax treatment depends on individual circumstances and may change in the future.

• Tax reliefs depend on the VCT maintaining its VCT-qualifying status.

• VCT shares are by their nature high risk, their share price may be volatile and they may be hard to sell.

Octopus Investments, 30 June 2020

1

VCT investments are not suitable for everyone. We do not offer investment or tax advice. This advertisement is not a prospectus. Investors should only subscribe for shares based on information in the prospectus and Key Information Document (KID), which can be obtained from octopusinvestments.com. 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. We record telephone calls.

Issued: November 2020. CAM010472.

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GB Investment Magazine

Open Offers

BPR 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.

Key risks to keep in mind

T. 0800 316 2067 E. support@octopusinvestments.com

octopusinvestments.com

• The value of an investment, and any income from it, can fall as well as rise. Investors may not get back the full amount they invest.

• Tax treatment depends on individual circumstances and could change in the future.

• Tax relief depends on portfolio companies maintaining their qualifying status.

• The shares of unquoted companies could 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.

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. We record telephone calls. Issued: July 2020. CAM010110.

EIS Open

Close

Evergreen

Amount to be Raised:

Mercia EIS Funds The Mercia’s EIS funds have been independently reviewed multiple times and are recognized to be amongst the top four EIS fund managers – please request reviews from enquiries@mercia.co.uk.

N/A

Mercia EIS fund creates diverse, early-stage portfolios of technology companies, investing nationally with a focus on the underserved regions of the UK, where the investment entry prices are substantially improved, which enables superior returns to EIS investors.

Minimum Investment:

Mercia has a large team of investment professionals, who are supported by in-house entrepreneurs.

Due to the scale of Mercia, it can provide value add services to portfolio companies, such executive search, access to our 750-strong network of NEDs, Chairman and FDs, legal and marketing support and discounts on software packages.

£25,000

Via the Complete Connected Capital strategy, the Mercia group can invest anywhere from £50,000 to £10m or more, enabling Mercia to be a very patient and supportive investor of high growth companies.

Highlights A portfolio of 10-15 companies, across industry sectors and stages from seed to series A.

T. 0330 223 1430 E. enquiries@mercia.co.uk www.mercia.co.uk

In the last 8 months, Mercia EIS fund has exited 4 companies very well, including Refract (1.8x), Clear Review (8.0x), Native Antigen Company (8.7x) and OxGene (16.3x). In 2020 Mercia won both of the Exit of the Year awards, and they have stated that this will be their primary target for the coming years, as Mercia states that “exits define the success of an EIS”.

Mercia EIS is part of the Mercia group of companies, including the Northern VCT, which has c£900m AuM, over 400 portfolio companies, 19 university partnerships, 8 offices and 110 staff.

The Mercia group sees about 3500 deals a year, deploys about £100m a year into regional business, and the EIS fund is less than 25% of that total. There is scope to deploy £250m per year into regional businesses, and there is no limitation on the size of the EIS fund.

Due to the number of companies that Mercia invests in per year, the EIS fund deployment averages under 8-months at the time of writing, although Covid-19 has slowed deployment down, Mercia fully expect to capital within a year.

GB Investment Magazine

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EIS Open

Close

30 November 2018

Evergreen

(monthly closes), next closes

26th March 2021 30th April 2021 Amount to be Raised:

£10,000,000 (£4,400,000 raised to date) Minimum Investment: £25,000

Nexus Investments’ EIS Scale-Up Fund A leading FCA Authorised sector-specialist EIS Scale-Up Fund For 2020/21 that helps advisors & investors deploy targeted, specialist risk capital, empowering growth and productivity at this important time.

We build each subscriber a curated portfolio of 8-10+ exciting, early-stage, EIS qualifying, businesses scaling up in the Data, Digital, Educational and Health sectors.

Nexus is owned by entrepreneur and financier, Harry Hyman, who in 1996 founded, and is still managing director of Primary Health Properties Plc, a FTSE-250 listed Healthcare Real Estate Investment Trust with over £2.5bn AUM itself.

Nexus also founded and runs HealthInvestor magazine, Education Investor and now Nutrition Investor, which are specialist B2B information, news and events titles for each respective sector.

The only UK EIS specialist: – part of a wider corporate group historically managing >£2.5bn AUM – with 27 years group history (including a FTSE-250 Healthcare REIT) – solely Scale-Up, and since inception, solely Data, Digital, EdTech & Health

T. 0207 104 2059 E. nexusinvestments@nexusgroup.co.uk www.scaleupfund.co.uk www.nivl.co.uk

SEIS Open

Close

June 2019

Evergreen

Amount to be Raised: £3m Minimum Investment: £10,000

– with exciting track record of Venture Investments since 2014 – with meaningful partial exits (+84% first-time score by MJ Hudson Allenbridge)

Jenson SEIS Fund Jenson are one of the longest running SEIS Fund Managers and have been investing in early stage growth companies since 2012 with over 110 investments to date. The Jenson SEIS Fund aims to target new innovative companies which are developing disruptive technologies with established plans and management teams, demonstrated growth potential with strong commercial opportunities with a planned exit strategy. The Fund is a generalist fund, thereby the sector focus is agnostic and the type of businesses and opportunities can be anything that is SEIS compliant (typically small early stage companies in non-capital intensive sectors).

Highlights

T. 020 7788 7539 E. invest@jensonfunding.com www.jensonfundingpartners.com

• Two tranches closed and deployed this year.

• Target Size – £3 million in respect of the 2021/22 tranche.

• Diversified Portfolio of 8 to 12 investments per tranche.

• Nine exits to date with a range of multiple returns from x.5 to potential of x12.

EIS Open

July 2019

Close

Evergreen

Amount to be Raised: £5m Minimum Investment: £10,000

T. 020 7788 7539 E. invest@jensonfunding.com www.jensonfundingpartners.com

Jenson EIS Fund The Jenson EIS Fund has a mandate to focus on long-term capital growth and enables private investors to invest in a range of committed and ambitious entrepreneurs and their early stage growing companies. The Jenson EIS Fund predominantly facilitates syndicated follow-on funding to its existing portfolio, external opportunities are also considered allowing us to benchmark against our existing opportunities. Investing in our portfolio allows us to support management teams that we have already worked along side. All companies will be small unquoted UK companies that qualify under the EIS tax rules. The Fund is a generalist fund, thereby the sector focus is agnostic, and the type of businesses and opportunities can be anything that is EIS compliant (typically small early stage companies in non-capital intensive sectors).

Highlights • Follow-on funding for 19 of our existing portfolio companies.

• Syndicated investment strategy releasing £3 for every £1 of Jenson Investment.

• Solid pipeline of investment opportunities with capacity to deploy, targeting £6m for deployment into 10-15 portfolio companies.

• First EIS Exit in February 2021 providing a return to on two Funds from 1.4x to 2.2x which should increase with companies that still remain in the fund.

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GB Investment Magazine

Open Offers

VCT Open

02/10/2020

Close

30/09/2021

Amount to be Raised:

£20m Ordinary shares + £10m over- allotment facility Minimum Investment: £3,000

Blackfinch Spring VCT Growth-Stage Investing The Blackfinch Spring VCT invests in technology-enabled firms at growth stage, bringing a higher chance of success. We invest in firms that have already raised funding, gained traction and aim to accelerate the scale-up process.

Tech-Enabled Firms We’re focused on companies using the Internet, mobile devices and social media to offer better products and services. Exposure to different firms and sectors helps create portfolio diversification.

Return Targets We target firms offering the potential for higher returns at exit. They need to show they have revenue and customers, and are capable of disrupting large, growing markets.

Tax Benefits • Up to 30% Income Tax relief (minimum holding period five years) • Gains exempt from Capital Gains Tax (CGT) when investors sell shares T. 01452 717070 E. enquiries@blackfinch.com www.blackfinch.com

• No Income Tax on dividends

Discounts • 1% per share for new applications received before 3pm, 5 April 2021 • 1% per share for existing investors (additional to the above discount) up until 3pm, 5 April 2021 Capital at risk.

IHT Open

Close

Evergreen

N/A

Amount to be Raised:

N/A

Minimum Investment:

£25,000

Adapt IHT Portfolios Meeting the Inheritance Tax Challenge Inheritance Tax (IHT) legislation, set against property values, means this tax remains a challenge for many. Our IHT solution uses Business Relief for a swifter route to IHT exemption after just two years (and if held at death).

Diverse Opportunities Three investee firms provide access to a wide range of opportunities: • Lyell Trading: property development finance • Sedgwick Trading: renewables investment • Henslow Trading: asset-backed finance

Choice Each client can choose from four model portfolios. This means each can find what’s right for them in terms of sustainable investing, their objectives and risk profile.

T. 01452 717070 E. enquiries@blackfinch.com www.blackfinch.com

• Ethical: focus mainly on renewables and low carbon projects, target return of 3%* p.a.

• Balanced: focus on capital preservation, target return of 4%* p.a.

• Balanced Growth: focus on capital preservation with growth, target return 4.5%* p.a.

• Growth: focus on growth, target return of 5%+* p.a. *All target returns net of costs and charges

Value We only take an annual management fee of 0.5% +VAT after we have achieved the minimum target return on the model portfolio a client selects.

Control Clients retain access to and control of capital, enabling withdrawals if their situation changes.

They can also take regular payments or leave capital invested.

Capital at risk.

GB Investment Magazine

47

EIS Open

Close

Evergreen

N/A

Amount to be Raised:

N/A

Minimum Investment:

£10,000 advised £50,000 non-advised

Blackfinch Ventures EIS Portfolios EIS Provider The Blackfinch Ventures EIS Portfolios are our open offering as a provider of Enterprise Investment Scheme (EIS) services. We have a strong track record in EIS, having previously raised funding across sectors. We’re passionate about supporting new firms as they grow.

Tech Focus We invest in forward-thinking new technology companies. Firms operate across sectors, with offerings based on ground-breaking new concepts, using highly specialised technology. With the potential to change the way we live and work, they’re set to make an impact in global markets.

Return Targets We target higher returns of 3-5x on investment, focused on successful outcomes for clients and companies. We identify firms early in their life and invest before they take off. Risk management is key to our strategy.

Tax Benefits • Up to 30% Income Tax relief T. 01452 717070 E. enquiries@blackfinch.com www.blackfinch.com

• 100% Inheritance Tax (IHT) exemption on qualifying investments after two years (and if held at death) • Capital Gains Tax (CGT) deferral relief (up to three years prior to investment and up to one year in advance) • Growth free of CGT (if Income Tax Relief has been claimed) • Offsetting of capital losses up to 45% • Carry back to previous tax year (for Income Tax relief) Capital at risk.

EIS Open

Evergreen

Close

Evergreen

Amount to be Raised: £10m Minimum Investment: £25,000

E. invest@o2h.com www.o2hventures.com

The o2h human health EIS knowledge intensive fund o2h ventures launched the o2h human health EIS knowledge intensive fund as the first HMRC approved knowledge intensive fund.

The investment focus of the HMRC approved knowledge intensive fund will be therapeutic drug opportunities or technologies that enable drug discovery with an emphasis on Artificial Intelligence (AI). The geographic scope shall be UK wide, following on from the success of the ‘o2h human health EIS Fund.

Knowledge intensive investing offers investors an opportunity to take advantage of the predictability of the tax year, from which they are able to claim relief. To date, investors in EIS funds claim relief when the funds are deployed into a business. However, in the new HMRC approved knowledge intensive funds, relief is dated when the investment into the fund is made (with carry back options depending on individual circumstances).

The biotech sector is one of the leading sectors in the UK economy. The large pharma companies now rely on the small innovative biotechs for new ideas in disease areas such as cancer, genomics, anti-ageing and neurosciences amongst others which has led to higher potential exit valuations.

The fund will widen the community of investors that will help expand early stage research in the UK. The o2h team are leaders in the biotech community and have been actively involved as investors, holding various board/industry positions as well as being engaged in grassroots scientific activity for over 20 years. o2h operate from their proprietary 2.7 acre o2h SciTech Park where they are developing a unique model for incubating small life science companies.

Key Highlights The first HMRC approved Knowledge intensive fund • Portfolio Diversification - Investment in 5-7 portfolio companies • o2h Ventures, CEO & Fund Manager - Sunil Shah has been awarded UKBAA Angel of the year 2019 award as well as the OBN Special Recognition Award for his exemplary contribution in lifesciences industry • Closing Date – Bi annually (April and September)

48

GB Investment Magazine

Open Offers

EIS Open

Close

Evergreen

Evergreen

Amount to be Raised:

N/A

Minimum Investment:

£20,000.00

Newable EIS Scale Up Fund 3 The Fund seeks to leverage Newable’s unique corporate infrastructure to invest in knowledge intensive companies at the point of commerialisation and once a company has proven the concept through early-stage revenues. The investments are supported by Newable's wider platform, providing serviced offices, advisory services, and lending solutions.

Newable also benefits from the expertise of circa 300 professionals, the Newable EIS Scale-Up Fund 3 has a unique eco-system from which to originate, undertake due diligence, execute, support, monitor and ultimately exit investments. The Fund aims to provide investors with a diversified portfolio of 7-10 knowledge intensive companies, offering investors exposure to an exciting asset class without the need to stock pick and commit management time.

Newable is independently recognised as one of the UK’s leading investment networks and draws on a 36 year track record as well as long term partnerships with the U.K. government and business community.

T. 0785 091 5378 E. sanjeev.gordhan@newable.co.uk www.newable.co.uk

Risk is mitigated through a selection methodology and due diligence built around Newable’s +300 strong investor group as well as by leveraging the Enterprise Investment Scheme for early stage investments.

Highlights • Newable can provide strong support at the scale-up growth stage, drawing on broader group resources across a range of disciplines including grant writing services, export services and innovation advice.

• Newable curates one of the most comprehensive and sophisticated deal flow eco-systems in earlystage investing. This eco-system yields around 1,500 investment opportunities every year.

• The Newable Ventures Investment Advisory committee has over 110 years of combined investment experience with a track record of making successful investments across the Innovation and Technology space. Recent examples include:

EIS Open

Evergreen

SEIS Close

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 31st December 2020, OT(S)EIS had completed 149 investments in 42 companies.

Things continue to go well and in the most recent quarter, the tax free gain on the portfolio increased from £10.59m at the end of Q3 to £11.80m at the end of Q4.

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:

£ 7.91m

Cash back to investors via tax reliefs (1):

£ 2.98m

Net cost of these investments after tax reliefs (2):

£ 4.93m

Cash back from exits (3):

£ 0.24m

Fair value of remaining portfolio (4):

£ 16.73m

Total value: £ 19.95m Tax free gain (on paper only so far):

£ 11.80m

After tax losses on the three failures:

£ 0.14m

*OT(S)EIS investors who made an SEIS investment in Animal Dynamics, an Oxford University spinout 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 www.oxfordtechnology.com.

At 10am on the first Thursday of every month, Oxford Technology holds a Zoom meeting at which 3-4 of its existing investee companies which are seeking expansion capital present, enabling investors to make direct EIS investments; sign up to attend via the website.

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I FAmagazine.com

March 2021 With Spring now upon us and a glimmer of hope that the country will start to return to a new normal, recruitment has been busier than ever before. Companies continue to offer flexible working and more and more are looking at completely remote working.

The last 12 months have taught businesses that life, and more importantly, work, must go on. The world keeps spinning and, in many cases, IFA businesses are flourishing.

The end of the tax year usually means a surge in work for wealth planning and 2021 is no exception. We have seen a big rise in need for additional paraplanning and administration support and a common theme of Director’s looking to retire and so seek that perfect exit strategy.

If you are Financial Services person looking for change, there has never been a better time to explore what is out there. Interviews continue to be held over phone calls, Zoom meetings, Skype and Teams calls. Companies seem to have settled into the new ‘normal’ and continue to hit the growth plans they originally set out.

We are still looking forward to the end of year and plan help as many individuals and businesses as we can.

If you are looking to hire or are considering a change yourself then please get in touch.

Alex Russon Associate Director – Financial Planning Division, Heat Recruitment Alex.russon@heatrecruitment.co.uk 0117 284 1248 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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0330 335 8347 Visit the Heat Recruitment website for more details of these and hundreds of other jobs too www.heatrecruitment.co.uk

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Handpicking the UK’s most promising tech firms Only applying our performance fee on gains above a high hurdle of £1.30 for every £1 invested.

Only taking our annual management charge for the first four years.

Investing with ESG (Environmental, Social and Governance) in mind, searching for companies making a positive impact.

Targeting 3-5x return across a wide-ranging portfolio of companies in different sectors.

Leading with a team highly experienced in start-ups including award-winning tech founders and technology specialists.

Blackfinch Ventures EIS Portfolios Find out more at www.blackfinch.ventures Capital at risk.

Blackfinch Investments Limited is authorised and regulated by the Financial Conduct Authority Registered address: 1350-1360 Montpellier Court, Gloucester Business Park, Gloucester, GL3 4AH. Registered in England and Wales Company Number 02705948.