A shot in the arm | IFAM95/GBI24 | February 2021 by Clifton Media Lab

For todayâ&#x20AC;&#x2122;s discerning financial and investment professional

A special combined issue with M AGAZINE

A shot in the arm Markets look forward optimistically to a post-Covid world Financial Services in a post Brexit transition world Februar y 2021

ANALYSIS

REVIEWS

Trading apps: friend or foe?

M&G's commitment to a 'net zero' future

IFAM95/GBI24

COMMENT

INSIGHT

E v e rg r e en Fun d Open

Praetura EIS Growth Fund

Next soft close 31st March 2021, with anticipated full deployment by 30th September 2021. Capital at risk.

c o ntact sales@praetura.co.uk praeturaventures.com

Praetura Inheritance Tax Planning Service The Praetura Inheritance Tax Planning Service (â&#x20AC;&#x153;PITPSâ&#x20AC;?) is an asset backed investment solution that aims to provide individual investors with 100% relief from inheritance tax after two years whilst also generating a targeted return of 4.5% net of fees per annum.

Highly experienced management teams combining significant lending experience and proprietary asset management analytics Access to a diversified portfolio of asset backed secured loans

Investment in a Business Relief qualifying company

Targeting an annual return of 4.5%

For more information please contact sales@praetura.co.uk or visit praeturaventures.com

Capital at risk. Financial Conduct Authority 317845.

WE LCOM E

Februar y 2021

A SHOT IN THE ARM

elcome to this first 2021 edition of IFA and GBI Magazine.

Since we last went to press in December, so much has changed in the world around us. Let’s start with the best news of all. The roll out of Covid-19 vaccinations has begun following regulatory approval in many countries around the world. Given the emergence of new ‘variants of concern’, it could not have been more timely that millions of people around the world are now gratefully receiving this precious gift of a shot in the arm. But there is very a long way to go. Concerns about the impact of mutations, let alone how we vaccinate the global population, impose clear restraints on any premature feelings of euphoria. It looks like we will be living with Covid-19 for some time to come, with all that means for the way we live and work. Not that you’d have guessed that by looking at world stockmarkets of course. They continue to look past the huge global cost of the pandemic, past the massive economic and financial impacts and look forward to a more optimistic, post-Covid world. At least your clients will be happy they took your advice to remain invested last March when fear dominated and stocks plunged! THE STAR SPANGLED BANNER As I write this, the free world has just welcomed a new leader. President Biden’s inauguration was eagerly anticipated by so many people. I must confess to feeling strangely emotional watching the inauguration ceremony – and no it wasn’t caused by Lady Gaga’s outfit (it was quite restrained - for her) - but the feeling that at last there was a sense of reason and reality making a much welcome

return to the US corridors of power. The appointment of the first ever female, first ever Asian American, first ever black Vice President in Kamala Harris was another significant moment in the history of the USA. As was the news that Donald Trump will be the first US President to be impeached twice. Ouch! But what will have hurt him most will be suspension of his social media accounts – most notably Twitter. Double ouch! This action brings another debate all by itself, but that one’s for another day. DEAL OR NO DEAL? A deal it was! The UK and EU finally managed to reach a compromise and the Trade and Co-operation Agreement was signed on Christmas Eve allaying many fears about what a ‘no deal’ outcome might really mean. Whilst the TCA was welcomed in many ways, its repercussions will, no doubt, be felt and discussed for years to come. A NEW NORMAL Thankfully, the financial planning and advice profession continues to get on with the business of advising clients, despite all the restrictions of working from home. As we wonder what Mr. Sunak might have up his sleeve by way of Budget changes on 3rd March, it looks like being a very busy run up to the tax year-end. We hope that, amongst the pages of this magazine, you will discover some interesting ideas that will help shape your thinking whether it’s on technical matters or around business process. Sue Whitbread Editor IFA Magazine

I FAmagazine.com

CONTE NTS

CONTRIBUTORS

Februar y 2021

Welcome

PIMFA priorities

Faith Liversedge

looking ahead to 2021. Liz Field, CEO of PIMFA highlights its three key priorities in support of the profession in 2021

Financial Services in a post-Brexit transition world Paul Wilson takes a look at what the implications of the Trade and Co-operation Agreement might mean for the future of UK financial services

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

Better business Sound, practical tips from Faith Liversedge on the dos and don’ts of using stock photography when it comes to your advice firm’s website

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

Advice and research – time is money Compliance consultant, Tony Catt, offers practical suggestions on how to improve the efficiency of your due diligence and research processes

M&G’s commitment to a ‘net zero’ future How M&G is leading by example in helping deliver on the Paris goals

18 Sue Whitbread Editor sue.whitbread@ ifamagazine.com

Exit planning Giles Dunning of Stephens Scown details why 2021 may see an increase in asset sales by IFA businesses

Trading apps: friend or foe? IFA Magazine’s Pete Wilson asks what advisers can learn from the popularity of online trading apps

Alex Sullivan Publishing Director alex.sullivan @ ifamagazine.com

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

ESG in real time Alberton Lopez Valenzuela, Founder and CEO at alva, highlights how Covid-19 has generated business dynamism towards ESG

Automation, the next step for financial advisers Joe Norburn, CEO of Recordsure, argues that now is the time for planning firms to integrate innovative solutions for future success

Do it with passion or not at all As 2021 gets underway, Michelle Hoskin of Standards International has sound practical tips on how you can kick start your life and your business

GBI Magazine Issue 24 Looking Forward

EIS – the drive to thrive We talk to Sanjeev Gordhan of Newable Ventures, about why and how the group’s sound business strategy can help deliver positive returns for EIS investors

Newer VCTs: A stronger option for clients Vince Keen, Blackfinch, on why advisers should consider newer VCTs as the tax year-end approaches

Designed by: Becky Oliver IFA Magazine is published by IFA Magazine Publications Ltd, Tel: +44 (0) 1173 258328 3 Worcester Terrace, Clifton, Bristol BS8 3JW © 2020. All rights reserved ‘IFA Magazine’ is a trademark of IFA Magazine Publications Limited. No part of this publication may be reproduced or stored in any printed or electronic retrieval system without prior permission. All material has been carefully checked for accuracy, but no responsibility can be accepted for inaccuracies. Wherever appropriate, independent research and where necessary legal advice should be sought before acting on any information contained in this publication. The value of investments and the income from them can go down as well as up and you may not get back the amount originally invested. IFA Magazine is for professional advisers only. Full details and eligibility at: www.ifamagazine.com

Is a change gonna come for EIS and SEIS? EISA’s Mark Brownridge explains why he is optimistic about the tax landscape for the sector

EIS - looking to the future Par Equity highlights why maturation of the EIS market offers increasingly attractive opportunities for clients

Capitalising on the growth in early stage companies As the tax year-end approaches, Richard Roberts, Oxford Capital, reminds advisers why EIS investments offers such a strong proposition

Open Offers Our listing of what’s currently available for subscription

Career Opportunities From Heat Recruitment

I FAmagazine.com

PI M FA

Februar y 2021

PIMFA PRIORITIES -

LOOKING AHEAD TO 2021 By Liz Field, Chief Executive, PIMFA In line with the outlook that Covid vaccination breakthroughs allow, PIMFA has reviewed our priorities for this year and the following are the top three. FSCS REFORM After major disappointment at yet another year of increased FSCS levies, there is a recognition that this cannot continue and we are working closely with Government & the regulator to find an effective way forward. Indeed, Tim Fassam, our Director of Government Relations and Policy, gave evidence to the House of Commons’ Work and Pension Select Committee inquiry in September highlighting our concerns about consumer detriment, our belief that the ‘polluter should pay’ & that this is ultimately an issue that can only be solved with holistic change. Individual firm failures erode trust in all regulated firms and undermine consumer confidence. Equally, the costs associated with these supervisory failures – e.g. FSCS and PII premiums – materially impact on cost structures, damaging competitiveness and innovation. These increased costs also negatively impact consumers by widening the advice gap. Today, fewer than 10% of UK consumers access financial advice, with many who don’t pointing to the cost of advice as a reason why they do not. In our latest policy paper, A rising tide lifts all boats?: A roadmap towards better consumer outcomes and lower levies, we argue that, without a wholesale review of the fundamental drivers of calls on the FSCS, the total compensation bill will continue to rise for all advisers and wealth managers regardless of any review of the levy’s construction. As a first step, we propose that the FCA fines imposed on firms for regulatory failures contribute to funding the FSCS rather than being paid to the Exchequer, limiting levy increases to a more manageable level or, potentially, reversing FSCS levy increases altogether. We are also calling for the FCA and FSCS to increase efforts to recover funds from firms or schemes that have failed

and ensure they take action in all cases that could reduce a potential levy payment for firms in the same class. AFFORDABLE PI INSURANCE Equally high on our list of priorities is the ongoing dysfunction which is present in the PII market. Our recent research suggests that only 17% of PIMFA members feel confident in their ability to secure affordable PII cover in future. Of even greater concern is the fact that over half reported that their current PII cover contained certain restrictions or was not universal in coverage of their back book. This is extremely concerning to us. The lack of affordable PII cover will ultimately see firms withdraw from the market and may in some cases mean that many default back onto the FSCS. PIMFA will be working directly with the Regulator and insurance sector towards a better solution which encourages a buoyant PII market. THE FUTURE OF REGULATORY SUPERVISION And finally, Brexit itself. 2021 began with the end of the transition period, creating the environment in which to reconsider the practical application of regulation, review the architecture of the Handbook and change the rules to reflect the specifics of the UK market. We therefore have an opportunity to ask for the review of MiFID II rules that have caused detrimental and unintended consequences and aim to achieve a future regulatory rulebook that is cost-effective, does not impose disproportionate cost burdens on industry and consumers and, above all, works for UK customers.

I FAmagazine.com

THE NATURAL CHOICE FOR SEED EIS

FROM THE GOVERNMENT YOU GET

THINK YL T N E R E F F I D ABOUT SEED EIS FROM THE NOVA GROUP YOU GET Experience: backing start-up companies since 2008. Proven performance: 36.5% year on year growth since 2008. Call Alistair Marsden on 07776 796 166

Unique depth of expert support for our portfolio companies. Reassuring diversif ication: aiming to invest in at least 20 companies each year.

WWW.NOVAGROWTHCAPITAL .CO.U K

WWW.NOVAGROWTHCAPITAL .CO.UK

The most generous tax reliefs of all: 50% Income Tax Relief + Capital Gains Tax benef its + Loss Relief.

Februar y 2021

PAU L WI LSON

FINANCIAL SERVICES IN A

POST-BREXIT TRANSITION WORLD

What does the signing of the Trade and Co-operation Agreement deal (TCA) mean for UK Financial Services? Paul Wilson takes a look under the bonnet of the 1,246 page document and tries to work out exactly what it might mean for those of us still scratching our heads as to what the future for Financial Services in the UK might look like

n the run up to Christmas 2020, undoubtedly you will remember all that ‘will they or won’t they?’ speculation about whether the UK would arrive at New Year’s Day with no trade agreement at all. There were also significant doubts about what the final shape of an agreeable deal might look like, should HM Government manage to get one over the line. Most would agree that 1.44pm on Christmas Eve was cutting it a little fine, but the deal got done. At present, for the average IFA, there is little change. The Covid-19 crisis continues to take prominence in the news, on the markets and economy. The general public were not particularly aware that that the trade deal doesn’t cover financial services. In normal times, the potential consequences of this would have been debated around the clock on the news channels, but 2020 was not a normal year.

So what does “No (financial services) Deal” actually mean for UK Financial Services? EU REGULATIONS AND ‘EQUIVALENCE’ The reason for Financial Services being excluded from the trade deal is in part complexity, but principally down to regulations. The EU insists that any third country trading in EU Financial Services follows equivalent rules to the EU. There is some ambiguity about what ‘equivalency’ might mean. At the centre of the storm that has been gathering is the EU’s refusal to recognise the UK’s regulatory systems are ‘equivalent’ to its systems. This may seem surprising given that we had been fully compliant with the EU’s regulatory systems as a member, or at least as a transitioning one.

I FAmagazine.com

PAU L WI LSON

However, it is not the past or even current compliance that is at issue, but the UK’s ability to diverge from the EU regulatory path going forward that is problematic for Brussels. Is that stance likely to change? ‘Unlikely’ thinks Andrew Bailey, Governor of the Bank of England. Although both sides have agreed to continue discussions to find a suitable compromise to work with on UK access to EU financial markets, the hard fact is that since 11pm on the 31st of December 2020, the UK is an external country and no longer has the same access to EU markets which it enjoyed as an EU member. When the markets opened in this new world in January, trading in EU shares amounting to EUR6.5 bn a day departed London permanently, to the immediate benefit of the Exchanges in the EU. This was an immediate and visible short term blow. Although the numbers look big relative to the key euro-centric market revenue generator the clearing activity of euro-denominated derivatives which is heavily centred on London based exchanges, in relative terms it is chicken-feed. Thanks to a short term compromise the euro-derivatives clearing activity has been able to continue in London. For now. The European derivatives market is huge, the notional amount outstanding in q4 2019 was EUR681tn, down a little on a year earlier when it peaked at EUR715tn. London’s dominance of the clearing market for these derivatives is impressive, with 82% of all trades by value involving a UK-domiciled counterparty. The ‘pinks’ were citing concerns in the run-up to the end of 2020 as to what might happen, without an agreement, to allow clearing for EU derivative trades to continue out of London. Clearly the EU market could not absorb the overnight loss of 82% counterparty capacity and whilst the EU might have liked to impose a hard Brexit on the market, the collateral damage to its own member countries would have been excessive. Inevitably, a work-around has been found to allow time for more negotiation. The European Securities and Markets Authority (ESMA) has agreed to extend the current

I FAmagazine.com

Februar y 2021

arrangements until the 22nd of June; thereby creating a ‘high noon’ for London on the longest day of the year. The ESMA is not setting out with the intention of keeping the market open for London. It is on record as wanting eurodenominated derivative trading to take place exclusively within the EU. It is taking the stance that London will only be able to continue to ‘play’ if it accepts “equivalent” regulations. The reprieve on euro-derivatives trades arises out of a need for convenience and stability for Europe, rather than as a signal of intent. Just as there were four and half years of heated discussion on a trade deal, the debate on equivalence for financial services also fulminated during that period, but without a resolution. The prospect of a future agreement looks bleak. That’s unless there is a fundamental shift on one side or the other over the definition of equivalency and the degree of latitude the EU will extend to the UK in charting its own regulatory path before it decides to pull the rip cord on any future arrangement. THE REST OF THE WORLD Whilst it could be argued that Brexit was about leaving the EU, it can also be argued that the UK has merely stepped out of the EU and into the rest of the World. Returning to equities and the loss to London of trading EU shares, we find an immediate example of this. In 2019 the EU banned the trading of Swiss shares in a dispute arising from botched trade negotiations. This cost London EUR1.2 billion a day in stock trading volume, however London and

Whilst it could be argued that Brexit was about leaving the EU, it can also be argued that the UK has merely stepped out of the EU and into the rest of the World

Februar y 2021

PAU L WI LSON

Zurich are working to clear a path for trade to resume by mid-February. The fact that this deal is being done lends further weight to the view that the UK intends to go it alone as far as financial regulation is concerned. Whilst there are few who would celebrate losing EUR6.5bn to gain EUR1.2bn and most concede that the short term impact on London is not good, it should be taken against a backdrop of a GBP 134bn industry that is diverse and holds the intellectual capital of over a million workers in the UK Whist there has been much focus on the intra-European market, the Global market is much greater in size and the UK is opening itself into a greater share of that market where it is already a premier league player. As a global leader with huge embedded knowhow, London is very well placed to commence a new wave of dominance as it did after Big Bang in 1987. Chancellor Richi Sunak has raised the prospect of Big Bang Two: rooted in a relaxation and refocusing of regulation, this could have the same effect as the first Big Bang. The UK has vast experience in reinsurance, derivatives and equities, as well as world class legal services. Free to reset its regulations for the emerging new world of financial services, FinTec driven and price de-constrained, the UK has the opportunity to shape a financial revolution. As financial services is inherently conservative, there will be a marked reluctance to relinquish the UKâ&#x20AC;&#x2122;s hard-earned reputation for high governance standards, and teasing out the standards which are truly gold standards and untouchable from those that are not quite right, such as MiFID 2, which will require some amendment to deliver its original aims, will require a finely balanced regulator with an ear for commerciality, stability and probity.

THE QUESTION OF UNCERTAINTY With the economic damage from the Covid-19 Pandemic far from over and the impact of the solvency of financial and trading institutions still largely unknown as financial reporting is slightly relaxed and many larger institutions are still assessing their true trading position, the potential for financial and systemic accidents stays high. In late 2019, there was speculation that a weakness in the Italian Banks could ripple out into a full banking crisis in the Euro zone. This never materialised. However, conditions have hardly improved for those banks, nor has the ability of the Euro zone to withstand such a shock been enhanced in the past 15 months. The US faces similar challenges, and there is a sense of political instability that is unfamiliar. These factors make it difficult to predict how the world economy will develop, but also the relative strengths and motivations of the main players in the G7 may also flex and change as their economies and societies adapt to the current situation. The UK is certainly less fettered in morphing to the opportunities ahead, but is it strong enough to punch at this weight with these contenders without the EU at its back? In future issues of IFA Magazine we will invite guest writers to explore more deeply the specific issues facing UK Financial Services as we continue to focus on the future for the sector in a post-Brexit world. In the meantime, we will watch with interest as the discussions and debates continue to take place as to what the future really does hold for this all-important sector which contributes so much to the UK economy in terms of income as well as employment.

Happily, the skills, mindset and knowledge to achieve this are centred in the City. The political environment is more likely to impact the success or otherwise of the project.

I FAmagazine.com

BETTE R BUSI N ESS

Februar y 2021

TIPS FOR USING

STOCK PHOTOGRAPHY

Practical tips from Faith Liversedge on the dos and don’ts of using stock photography to ensure your advice firm’s website maximises its impact

emember the last time you went to the beach and saw all those over 60s laughing at nothing, throwing their hands in the air, while wearing perfectly blended pastel casuals?

So why are these images so prevalent on financial websites? Because they’re the go-to: they are easy to find, cheap to use and generic enough to tick the box marked ‘retired people’. It doesn’t require much thought. And a few years ago, you might have been able to get away with this. But not now. Now this kind of thing has the potential to undermine the integrity of your message, your brand and your business. Why? Because nowadays people are receiving much more nuanced, personalised marketing messages that are more reflective of who they are. BUT DO WE REALLY WANT REAL PEOPLE? Using images of real people can look a little messy.

No? Maybe it’s because real people don’t actually do these things. Not even really happy retired people. (No matter how good your financial planning is!)

I FAmagazine.com

No one actually wants to see themselves as they really are. We want to see a polished version of that – something more aspirational looking. Particularly if we’re being encouraged to spend money.

Februar y 2021

BETTE R BUSI N ESS

So we need to strike a balance between the perfectly coiffed, immaculately dentured, white middle class boomers who look as if they were once part of Pan’s People, and the sorts of grittily realistic photos you find in the windows at Tesco. SO WE’RE GOING TO GO BACK TO STOCK PHOTOGRAPHY Because the truth is, there are plenty of stock images that aren’t corny and can work very well when creating a certain image. You just need to be able to choose them wisely and use them in the right way. Here are some tips: Create a visual theme for your website or brochure – this will help to tie everything together. This could be a common colour, a specific background colour, or something more abstract like water or mountains.

thumb is to avoid images of people looking face-on into the camera, unless this is a deliberate style you’re going for. Try to keep it simple – don’t choose anything with too much going on in it otherwise it’s hard for people to take in the meaning behind the message. And what is the meaning? Well, what we want potential clients to glean from all this is that you help people like them. So if you work with high net worth clients you need to feature people like them, if its generations of families, that too. A picture is worth a thousand words, as the saying goes. Especially these days when our attention spans are shorter than ever. An MIT neuroscience study found that the human brain can process images seen for as little as 13 milliseconds — just over 1/100th of a second.

Customise your images by using a specific filter – this will standardize the overall tone of your images and make them feel like a cohesive group. Change the shape – making your image into a circle or hexagon helps to change the whole feel of an image by highlighting specific aspects of it. This can work particularly well if these shapes are also present in your logo. Make them black and white – this is an effective way of making images look a lot more sophisticated and is particularly helpful when dealing with images of your team – particularly if they were all taken at different times. Add text – text on images can really help to personalise them and to add some context, and can instantly modernise the look and feel of your website or printed assets. Crop or rotate images – homing in on certain interesting details can change an image dramatically. Flipping an image can help when adding text. Choose pictures that look natural – choosing pictures that show genuine emotion can be difficult, but a good rule of

This is useful when we think that apparently it takes 5 seconds to make a decision about whether to hop off from a website or not. The more authentic the image, the more approachable, genuine, trustworthy and credible you’ll seem. Now hopefully you know how to make every second count when it comes to the successful and effective design of your business’ website.

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.

I FAmagazine.com

â&#x20AC;&#x153;The shift in the way many of us work, live, learn and earn has precipitated investment interest in this [EIS] Fund, which specifically focusses on these areas and has done for many years now.â&#x20AC;? MICAP, November 2020 84 (score out of 100) MJ Hudson Allenbridge, June 2019 Visit www.scaleupfund.co.uk for more information, to download the IM and application form for 2020/21

EXISTING EIS PORTFOLIO

For more information, please contact: nexusinvestments@nexusgroup.co.uk or call +44 (0)207 451 7050

@NexusInvest

scaleupfund.co.uk nivl.co.uk

Nexus Investments refers to Nexus Investment Management Limited (NIML) and Nexus Investment Ventures Limited (NIVL). Nexus Investment Ventures Limited and Nexus Investment Management Limited registered in England with registered numbers 7539942 and 10927854. Nexus Investment Management Limited is authorised and regulated by the Financial Conduct Authority (FRN 796814). Member of BVCA and EISA.

TONY CATT

Februar y 2021

ADVICE AND RESEARCH –

TIME IS MONEY How can advisers and paraplanners maximise the efficiency of their investment and product due diligence processes? Compliance consultant Tony Catt offers some practical suggestions.

he need for professional advice is based on the assumption that an adviser is likely to know more than their client about the choices which are available to that client when considering how to achieve certain life goals. The adviser builds up and maintains their technical knowledge by passing the required exams and undertaking regular Continuous Professional Development (CPD). A lot of valuable knowledge is also built up by experience from advising clients over the years. The FCA expects advisers to select the most suitable products to enable clients to meet their demands and needs and to enable forward financial planning. It is in this selection process that a lot of time can be won and lost. THE USE OF SOFTWARE TOOLS When advisers or paraplanners are comparing mortgage terms for example, then there are excellent mortgage sourcing software providers – Trigold, Mortgage Brain and Air Sourcing spring to mind, others are available of course. These are easy to use and give quick, understandable answers and make selection really straightforward. Looking at protection products, again there are excellent software providers – iress, Ipipeline and LifeQuote and several others. Again, the choice is relatively easy and the comparison of rates is clear. The slope becomes a little slippery when looking at critical illness and income protection plans because providers have different definitions

of conditions and therefore sorting out which provider is most appropriate to use is not so clear cut. CI Expert is one product that I have seen that goes into details on critical illness as the product name suggests. I have also seen some interesting comparisons on Defaqto Engage. So far, so good. In these instances there would not be too much of a your time spent on research due to the excellence of the software and the relative simplicity of the products involved. A QUESTION OF INVESTMENT When we get into investments, then the research becomes a little more involved. We need to ask some crucial questions and make assessments before we can attempt it. Such questions are: • Why is the client investing? • How much is the client investing? • What proportion of their overall wealth does this represent? • What is their attitude to risk? Do they understand risk? • What is the term of the investment? • How to maximise tax efficiency? As I so often stress, the effective advice research process starts with a sound, in-depth fact find session with the client. A detailed fact find is the best sales tool any adviser can obtain. Good fact finding helps builds a relationship

I FAmagazine.com

TONY CATT

based on trust. It happens when an adviser does a minimal amount of talking and a lot of listening and noting down all the information that a client is willing to provide. It’s about using empathetic questioning to get detailed information. This will gain a better overall picture of the client’s situation as well as greater client buy-in than a mechanical question and answer session which simply aims to get to the end of the questionnaire. RISK MANAGEMENT This leads nicely on to a detailed discussion of risk and what risk means to your client. Again, many advisers waste opportunities by rushing through a meaningless series of questions on a risk profile form. There are many providers of such risk profilers. Advisers need to ensure that they understand the results from the questionnaires and that the risk ratings are in line with their own beliefs. INVESTMENT RESEARCH As far as sourcing information on various investments, there are some good providers of information such as Defaqto, FE Analytics and Synaptics that can sort products quite quickly when you have learned how to use their systems. However, they are quite manipulable to produce the results that advisers want to see to suit their own Central Investment Proposition. Morningstar, FE Analytics and ARC also provide detailed investment fund information to enable comparison. The research piece of the process is where the FCA and the advisers diverge in their stance. The FCA would like to see full research from an independent source to show a robust rationale for the choice of product and provider. Ideally, on an individual client basis to prove ultimate suitability of the solution the adviser has recommended for the client. Whilst this utopian ideal is possible, the time involved in going through an in-depth research process for each client would make an adviser quite inefficient and would make profitability difficult to achieve. It should be remembered that all the providers have beautiful documents extolling their virtues over all others. Some of them also provide “due diligence” documents about their products. That is why the FCA is so keen that third-party research is undertaken. There are also excellent providers of in depth comparison and review research reports, such as Hardman & Co, the Langcat, Threesixty, Defaqto, Fundscape, Platforum and other that produce reports from time to time. I have also

I FAmagazine.com

Februar y 2021

dabbled in this field with regular platform research reports and my MPS report that detailed the MPS products of 65 providers over a 160+ page report. And this is just about products that advisers are advising upon on a regular basis. Some advisers like to use structured products it would appear that Structured Edge by Future Value Consultants is the most utilised research tool. As well as all the latest product research it has a searchable database, comparison tools, rankings, news and education. TAX-EFFICIENT INVESTMENTS Some advisers also work with higher net worth clients and use the tax efficiency of Enterprise Investment Schemes (EIS), Seed EIS, Venture Capital Trusts (VCT) as additional investments and Business Relief products for inheritance tax planning. Research can be provided by some of the companies already named and probably more specialist information from MI Capital. Also, there are websites focussed on these product areas, such as Growth Invest and Kuber that provide comparison facilities. The problem for advisers can be unfamiliarity with some of these more esoteric products or different platforms. They are starting from a point of minimal knowledge. Then, if they are not working regularly with certain products, they are almost starting from scratch each time they revisit the product or provider. So, for convenience most advisers will opt for an online research provider. Something that can tick their compliance box as having undertaken independent research. Doing the independent research can be a total time-thief so it is a difficult balance and possibly subject to the law of diminishing returns. It pays to bear in mind the crucial requirements such as: • How much information should the client receive? • How much information does the client actually want? • Are you in line with Treating Customers Fairly (TCF) regulations? Ultimately, the client just wants the comfort of knowing that they have received expert advice to provide the solutions that they need to help them to achieve their own personal goals. Tony Catt Compliance Consultant 07899 847338

Februar y 2021

M&G I NVESTM E NTS

M&G’S COMMITMENT TO A

‘NET ZERO’ FUTURE

Urgent action is needed on climate change and M&G is determined to support the goal of net zero greenhouse gas emissions by 2050 through its global investments and corporate behaviour.

he scientific evidence is clear. Climate change is one of the biggest threats to our planet and its people. The effects of rising global temperatures are already being felt, presenting immediate risks to the global economy, the long-term health of the environment and to society. The current trajectory of greenhouse gas (GHG) emissions implies that global average temperatures could rise in excess of 4°C above pre-industrial levels by 2100. To limit this increase to well below 2°C, in line with the Paris Agreement,

We announced in March 2020 that, as an asset owner and asset manager, we commit to net zero carbon emissions on our total book of assets under management and administration by 2050

will require no further GHG emissions from 2050. We have only three decades to achieve this ‘net zero’ target. As a FTSE100 company and as a long-term asset owner and asset manager, M&G plc embraces its responsibility, to both our customers and wider society, to invest in ways which ensure a sustainable future, including tackling climate change and enabling the transition to a low-carbon economy. OUR COMMITMENTS AS AN ASSET MANAGER As stewards of the long-term savings of millions of people, and as an international company of scale, we want to lead by example in helping deliver on the Paris goals. We announced in March 2020 that, as an asset owner and asset manager, we commit to net zero carbon emissions on our total book of assets under management and administration by 2050. This includes all investments made by M&G Investments, the asset manager within M&G plc. Reflecting this commitment, we became a founding signatory of the Net Zero Asset Managers initiative in December 2020. This leading group of asset managers

I FAmagazine.com

M&G I NVESTM E NTS

Februar y 2021

which call for businesses to disclose better information about the climate risks they face.

As well as allocating capital towards lower emissions sectors and technological solutions that mitigate the impact of climate risk, we are working to support the transition to a low-carbon economy through active engagement with company management

supports net zero GHG emissions no later than 2050, and supports investing aligning with this goal. As part of the initiative, we also commit to prioritising the reduction of real economy emissions within the sectors and companies in which we invest. As well as allocating capital towards lower emissions sectors and technological solutions that mitigate the impact of climate risk, we are working to support the transition to a low-carbon economy through active engagement with company management. We engage with investee companies on climate change and use our votes, where we are shareholders, to drive change. We are also encouraging greater climate-related disclosures. This reflects M&Gâ&#x20AC;&#x2122;s support for the recommendations of the Task Force on Climate-Related Financial Disclosures,

I FAmagazine.com

To gain a better picture ourselves on our investmentsâ&#x20AC;&#x2122; exposure to the financial risks and opportunities from climate change, we are also investing in improving our research and analysis capability and developing proprietary tools across assets, sectors and geographies. OUR COMMITMENTS AS A COMPANY In March 2020, M&G plc announced its commitment to reduce operational carbon emissions to net zero by 2030, at the latest. We have already made progress towards this target through energy efficiencies, renewable energy supplies, and reducing resource use across our offices. We are also cutting emissions from all business travel by transitioning to a lower carbon fleet, promoting agile working, and reducing air travel. Where there are no suitable alternatives, we will offset any remaining emissions through accredited offsetting schemes. Through our global investments and our own corporate behaviour, we will play our part in the transition to a low carbon economy. Thatâ&#x20AC;&#x2122;s why M&G has pledged its support for the United Nations Climate Change Conference COP26, and its agenda of collection action, due to be held in Glasgow in November 2021.

EXIT PLAN N I NG

Februar y 2021

WHY 2021 MAY SEE

AN INCREASE

IN ASSET SALES BY IFA BUSINESSES Merger and acquisition activity has been in short supply of late, but the current stasis cannot continue indefinitely. Giles Dunning, M&A financial services specialist and Partner with Stephens Scown LLP, predicts that asset sales may grow in number, as an alternative to the more traditional share sale.

he New Year is upon us and, for many IFAs, it couldn’t come soon enough. With Covid vaccinations now taking place across the country, there is renewed hope that business plans to sell can at long last be implemented.

why these were the preferred route. The key reason is that the business is sold in its entirety and the buyer takes on existing liabilities. A share sale is usually more tax efficient for the seller who may be able to claim Business Asset Disposal Relief.

IFAs who wanted to sell their business during 2020 may well have found they were stymied by the effects of the pandemic. Now, they can begin to look forward again. However, we now exist in a different environment – and so, it may not be M&A business as usual.

In contrast, asset sales have generally been less favourable for sellers, particularly because they can lead to the seller facing two tax bills – one for corporation tax and the other for personal tax (although the burden may be lessened if expert guidance is taken at an early stage). Clearly, each sale is individual and specialist advice in this area is essential. Some mitigation may be possible using effective tax planning.

SHARE SALES NO LONGER THE ORDER OF THE DAY?

There are several factors contributing to why asset sales may become more commonplace in the months ahead.

If we look at pre-pandemic recent years, we can see most deals were share sales. For sellers, there are several reasons

• Speed IFAs who wanted to sell last year but were unable to, could feel that time is of the essence. They may be ready to retire

I FAmagazine.com

EXIT PLAN N I NG

or have other personal reasons which have meant that running a business has become impossible. Generally, an asset sale is a swifter transaction than a share sale. • Rising professional indemnity costs and shrinking capacity With a share sale, one of the key concerns for buyers is that there could be a professional indemnity claim in the future. It is commonplace for a new buyer to require the seller to purchase run-off professional indemnity cover as protection. Typically, buyers ask for run-off cover of up to six years. However, there has been a marked rise in PI premiums and a reduction of insurer capacity and longer-term run-off cover may be difficult to obtain or prohibitively expensive. This lack of certainty can lead to difficulty in negotiating the relevant terms in the share sale agreement. With an asset sale, the seller retains control of the company over the run-off period and ultimately takes responsibility for its insurance arrangements – effectively leaving the seller as the master of their own destiny in this regard. • Reduced professional fees Asset sales are generally simpler and less time consuming to achieve when compared with a full-blown share sale. Share sale documents must deal with a myriad of issues such as balance sheet adjustments, tax indemnities and due diligence on the company’s share history to name but a few. All of these can, and often do, reveal issues that need to be resolved between the lawyers and the corporate finance specialists. An asset sale will generally not need to deal with these points which can lead to significantly reduced professional fees. Of course, there are things to deal with on an asset sale such as the novation of clients from one entity to another, and compliance with the TUPE regulations in terms of the transfer of employees. • Smaller firms may be more suited to asset sales Many regulated firms are in fact one- or two-man bands trading as limited companies. When such firms are sold, the sale proceeds are generally more modest, and the business

I FAmagazine.com

Februar y 2021

should, in theory, be much simpler than a larger firm with multiple premises, advisers and support staff. However, these smaller firms can often be overwhelmed by share sale structures designed for much larger firms that result in huge amounts of management time being taken to realise a sale. Here, a much simpler asset sale could facilitate a far less painful exit – providing, of course, that the relevant tax advice is taken. • Options after an asset sale Asset sales may well have been more common in any event were it not for the difficulties posed by the resulting double taxation. Although the tax situation may be less attractive, a good prospect should still be able to command a high asking price without having to give potentially onerous (and often over-bearing) indemnities in favour of a cautious buyer. Even in this turbulent environment, M&A activity is demonstrating that wealth management businesses remain in high demand. There is no one-size-fits-all and, after a sale, some sellers may choose to retain a part of the business should they wish to continue doing some work. Others who want to exit will prefer to settle any debts and wind the firm up in accordance with FCA requirements. Suitably qualified advisers can provide guidance on this and liquidation, as necessary. Given the right conditions, an asset sale can certainly work for both parties. So long as sellers have a strong proposition, they should achieve an acceptable price, and both parties may benefit from what should be a simpler and swifter sale.

About Stephens Scown Stephens Scown has over 300 staff, including more than 50 partners, across its offices in Exeter, Truro and St Austell. The firm has been ranked for four consecutive years in the Sunday Times 100 Best Companies to Work For.

Februar y 2021

RETAI L I NVESTI NG

TRADING APPS:

FRIEND OR FOE? In 2020, retail investors flocked to the market. In 2021, they may well lead it. IFA Magazine's Peter Wilson, a Zoomer himself, considers the importance of professional advice as online trading gets more and more popular, and asks what advisers can learn from the modus operandi of online trading platforms.

2020 saw an explosion in the numbers of people across the globe seeing trading on the stockmarket as a means of getting rich quick. The bull market in the NASDAQ, the astonishing rise of ARK ETFs and the mind-boggling increases in volumes in crypto-assets have all been fed and facilitated by DIY investors who are hungry to join in the latest craze. But is it something which is set to last or will it all end in tears? And what does it mean for the advice profession?

The most popular trading app in the US is RobinHood, which saw over four million trades a day on average in June 2020. Statistics are hard to find for the UK equivalents, such as Trading 2-1-2 and EToro, although if their presence on social media and word search volume is anything to go by, they prove very popular platforms indeed. There are many who have fair concerns over the use of these trading apps. In particular, contracts for

QUICK AND EASY For many of todayâ&#x20AC;&#x2122;s DIY investors, their first access point to investing is through trading apps. Theyâ&#x20AC;&#x2122;re quick and easy to access and the lure of commission-free trading of equities, commodities, currencies and more is undoubtedly compelling. The facility to practise using a virtual account means that users can find their way around the app before they proceed to using real money.

In this climate of do-it-yourself investing in amidst the bull market returns of 2020, one thing seems conspicuously sparse - namely, sound financial advice

I FAmagazine.com

RETAI L I NVESTI NG

difference and glossy advertising standout. However doing away with gatekeeping fees and increasing access to investments is, overall, an undeniably good thing. That said, in this climate of do-it-yourself investing in amidst the bull market returns of 2020, one thing seems conspicuously sparse - namely, sound financial advice. That is not to undermine the rise in financial literacy we have seen over the last year or so. For all the suspect mentoring courses out there, there is equally as much informative content, though perhaps not as seductive. WHAT CAN WE LEARN? IFA Magazine has been talking to a variety of experts, including advisers, planners and investors to hear what they have to say about DIY investing, the rise of trading apps and how advisers can find a place in such an environment. For years, the advice profession has been criticised for failing to resonate with younger clients – as well as with those who do not have a large amount of investible assets. It’s the old chestnut of the “advice gap” and how we can close it. A key theme that came out in these conversations is the need for advisers to take a leaf out of these trading apps’ book. Advisers and planners need to level-up their accessibility, create and share engaging content on social media, and compete with scamming influencers on their

I FAmagazine.com

Februar y 2021

own terms, if they are to appeal to a new audience. Let’s face it, it is an audience which is clearly in need of the sound guidance and advice that the profession can deliver. So what needs to be done? GOOD AND BAD I spoke to Martin Bamford, Chartered Financial Planner and creator of Bamford Media a boutique, contentmarketing production agency and digital publisher, in the financial services industry. I got in contact with Martin after he shared a video on Twitter. The video was posted by a Twitter account called ‘TikTok Investors’, and showed a couple giving absurdly bad ‘financial advice’. Check it out for yourself here. https://ifamagazine. com/article/tiktok-investors-give-financial-advice-theindustry-reacts/ Bamford, who is an extremely experienced adviser himself, started by acknowledging how the explosion in DIY investing has both good and bad connotations. He comments: “A growing number of people, especially younger people, who are investing for the future should help to build levels of financial resilience. However, where investing activity is being fuelled by the notion of getting rich quick or beating the markets through day trading prowess, it is inevitably doomed to failure.” The bull run of 2020 has been historic and certain stocks with immediate name recognition did very well, think Tesla. Bamford worries this may have lulled some into a false sense of ability and confidence in getting rich quick.

Februar y 2021

RETAI L I NVESTI NG

“Newbie investors who have done well in the past year need to separate any assumed skills from their stock selections from the luck of getting started during a bull run.

I emailed Neil a day after the topic of retail investing was discussed at the firms ’regular roundtable, so he was particularly primed for a response.

“For the overwhelming majority of retail investors, picking and trading stocks is a strategy doomed to fail. History tells us that these investors would be better off opting for a low-cost index tracker fund and topping this up each month to benefit from pound- cost averaging and compounded returns.”

I asked Blankstone, as someone who has spent their career advising people on their finances, what his thoughts were about the explosion of retail investing using trading apps.

The questions remains, are many new investors actually aware of this? Bamford has a simple yet pragmatic solution to this problem, ‘we need to go where the investors are.’ He continued, ’A dark side of the growth in retail investing is the prevalence of scammers, especially on social media platforms. Instagram, TikTok and Twitter in particular have become havens for investment scammers, selling a fake lifestyle to lure their victims into buying 'trading signals' services or managed portfolios, where money is ultimately stolen.’ Bamford argues that investor education needs to be ramped up to match these investors ’demand, he continued, “financial planners are well placed to deliver this, but that means creating and sharing engaging content on social media. We're in competition now with the 'influencers' who view the financial markets as a lucrative place to make money from their affiliate links and brand deals.” EVERYTHING IS INSTANT Neil Blankstone is the Senior Director of Business Development at Blankstone Sington. Blankstone Sington just won Growth Investors ‘one to watch ’award for 2020.

He started by highlighting an important backdrop to the whole thing. ‘Millennials have grown up in a completely different environment. ’One in which ‘everything is instant, if they want to transfer cash/pay for something at 4am, having been on a night out they can! ’The growth in technology, internet, and access to information mean ‘if they get an idea and they can almost instantly see how they can put it into practise.’ I asked how he believes the advice profession may attract younger people with savings. Neil responded by first outlining, “the fact it is called “retail investing” as against say “retail saving” highlights one danger. Stockmarket investing into individual companies ’shares is a risky business. Using stockmarket investment as part of a wider saving plan isn’t.” Blankstone pointed out a cultural difference between the US and the UK, ‘We have bookmakers/casinos to hand. In the US you have to either do it online or travel. The stockmarket in the US can become an extension of gambling, the UK has a danger of developing that way.’ Blankstone continued, ‘if the adviser industry wants to tap into this space, it will need to adapt how it delivers its advice. If you think of the average adviser model, can you honestly see an 18-25 year old wanting to sit down and go through, face to face, their finances, their risk appetite, what’s suitable

I FAmagazine.com

RETAI L I NVESTI NG

Februar y 2021

BIG OPPORTUNITIES

Those advisers who are prepared to grasp the opportunity, to adapt and develop the way they communicate their service will have the best chance of closing the advice gap that has for so long eluded the profession as an investment and what’s not, what their long term ambitions are?’ ‘An adviser knows what the client should be doing and should be considering – but the way that advice is delivered and the message that is given needs to tap into the psyche. A good adviser should be tailoring their advice to lead on to/ allow for the change in the circumstances that a Millennial will inevitably see over time.’ What 2020 has made clear is that there is a renewed appetite for investing among the general population. Ultimately, the major theme that springs out amongst those we’ve talked to is that the rise in interest in investing provides an opportunity for advisers. It’s an opportunity to use the same platforms and ways of communicating that those who are significantly less qualified do so already. Those advisers who are prepared to grasp the opportunity, to adapt and develop the way they communicate their service will have the best chance of closing the advice gap that has for so long eluded the profession.

I FAmagazine.com

Kate Holmes is Certified Financial Planner, and the CEO and founder of Innovating Advice, a podcast and community platform to do its namesake. She is based in the USA and has strong views on the subject of engaging millennials in the arena of financial planning. I had a great conversation with Kate all the way back in November 2020 and her comments echoed that of Bamford’s. I started our conversation by confessing to Holmes my own experience of using trading apps and my modest successes making me feel like an investment genius. Her response was to say that ‘so many people were diving into trading apps during lockdown, we’ve seen this across the world. Because the market has been going up there really is this false sense of genius that’s coming about’. Ok, investment genius I’m not. I’d better stick to the day job after all! Holmes related this sentiment to her experience while building an adviser firm following the 2008 financial crash. “We saw the exact same thing happen during the global financial crisis - people lost their money and thought the world was ending, then immediately there after the markets shot up. When I started my prior business working with millennials, I did talk to a lot of people who said ‘hey my husband or my co-worker is a genius investor so why would I work with an adviser?’” I asked whether she thought retail investing apps could be seen as a threat to advisers. Holmes responded, “I don’t see

Februar y 2021

RETAI L I NVESTI NG

these platforms as a threat to IFAs. I have long been a fan of the idea that investing becoming commoditised. ’Holmes continued, ‘IFAs cannot control the market, so what IFAs should be focussed on are the things we can control. We can control how much money people save, how regularly they are saving, and what they are investing in.’ Holmes suggests IFAs should be getting to grips with the current zeitgeist in retail investing, ‘having IFAs understanding how these things work, and coaching clients against the instant gratification of Robinhood-type apps is crucial. ’Holmes mentioned how the app encourages customers to place more trades and to invest in some of the riskiest things out there. With a practical approach, she stressed some small changes which IFA businesses could do immediately. “There are a lot of barriers between the public and IFAs, it's often very formal, you have to book an appointment and fill out forms, and see if you qualify – that’s miserable.” “There are such great big opportunities for IFAs to make this more easy and accessible, and to make it a much more enjoyable experience to work with you. When you go to these apps you can sign up instantly. They’re super easy to use,

you know straight off the bat if there are 0 trading costs, or if there are any costs, vs going to an IFAs site. If you’re open to adopting small things - put fees on your website!” Kate, like Bamford, has a popular podcast that covers financial advice. She was keen to highlight the growing numbers of advisers, planners and economists who are already using platforms such as TikTok to engage with new investors, and offering sound advice by taking advantage of social media and taking a different approach.

Because the market has been going up there really is this false sense of genius that’s coming about

THE ASIAN EXPERIENCE Ronald W.Chan is the founder of Chartwell Capital in Hong Kong, which has just joined the Group of Boutique Asset Managers. Chartwell Capital is major player in the value investing community, and Chan himself wrote The Value Investors: Lessons from the World’s Top Fund Managers, which has received a lot of industry praise. Chan can help give a value investing perspective into the current environment we find ourselves.

I FAmagazine.com

RETAI L I NVESTI NG

Ronald Chan started by highlighting how popular trading apps already are in Asia, “Online and mobile trading in Asia are already well established, especially given investment stock trading is almost regarded as a past time here!” Asked about the role that trading apps have had on investing over 2020, Chan responded, “I think retail trading apps have definitely led to an increase in momentum investing. Trading apps have provided accessibility which was not previously there, so a whole new cohort of investors has joined the market.” Asked of his opinion on fee-less trading apps Chan answered, “Overall, I think they are positive, as they are opening up opportunities to new investors and are an important step in improving financial management and literacy. The information and knowledge being shared online is phenomenal.” Sharing an analysis on the investors themselves Chan continued, “They ‘are less bogged down by ratios and analysis, with a different mindset to more traditional investors. Time horizon is a key differentiator – these traders are more focused on instant gratification rather than the safety of a longer time horizon.” Chan was keen to separate himself from a debate around investment approaches, after all the approach depends on what the investor is after.

Februar y 2021

and importantly, making sure you have a safety net when it doesn’t work.” Chan also highlighted the positive effects trading apps have had on his industry. “I think they are driving innovation and raising standards in the asset management industry, especially for active managers. There is no scope to get flabby or complacent – managers need to evolve and find their niche which complements the momentum and data plays.” Something present online in 2020, whether it be on YouTube, or Social Media platforms like Twitter or TikTok, were young people retail investing. Chan touched on this, saying, “Millennials typically like to participate when there is a story. If they feel part of a story and can identify with it, they will go for it. Trading apps offer another form of story telling.” Chan concluded by saying, “Obviously, the negatives are around the downside risk. There is rarely a thesis behind momentum trading – so what happens when you lose? Being clear on your ultimate investment principles and making sure you can still sleep at night are good anchors.” “I think trading apps are fine as long as you are making money - it is not a bad habit if it works, but it needs to be sustainable and repeatable.”

In reference to those on the hunt for bull market returns Chan said, “Ultimately, it’s great if you are making money,

I FAmagazine.com

ALVA

Februar y 2021

ESG IN

REAL TIME Alberto Lopez Valenzuela, Founder and CEO, alva, highlights how Covid-19 has generated business dynamism towards ESG

n the latter half of 2020, we have seen a serious return of Environmental, Social and Corporate Governance (ESG) issues to the corporate agenda. Indeed, one lasting legacy that this pandemic has left on corporates could be ESG.

But it didn’t always look like it would be this way. During the depths of the first lockdown, businesses immediately focused on navigating the huge challenges of the crisis, fighting to continue their operations and adapting to remote working. At the time, it looked as though there would be an almost permanent move away from broader concerns such as climate change and diversity – which made sense at the time.

A POSITIVE SHIFT However, since July, a surprising shift has occurred. alva’s own research has found that ESG-focused corporate announcements have leapt out of nowhere to become permanently listed in the ranking of the top eight news stories. We’ve seen UK supermarket Waitrose’s announcement that it will remove unnecessary plastic packaging in this year’s Christmas ranges, alongside fellow retailer Tesco’s pledge for a 300 percent sales increase in meat alternatives within five years. What has driven this shift? My view is that Covid-19 has forced businesses to reassess and make drastic changes.

This need for change, combined with the social and environmental shortcomings of previous models, has created an environment in which businesses are now readily turning their dynamism towards ESG. COVID-19 has broken the rut of ‘business as usual’, and with companies reassessing the future, ESG is standing out as a core priority for many. But already we are beginning to see a phase two in this shift, one that I believe is being driven by stakeholders who are asking for much more from their companies.

COVID-19 has broken the rut of ‘business as usual’, and with companies reassessing the future, ESG is standing out as a core priority for many

STAKEHOLDER PRESSURE And as these stakeholder expectations increase, ESG is beginning to look like a virtual arms race between firms

I FAmagazine.com

ALVA

The message from stakeholders is becoming increasingly clear: ‘Not damaging’ will no longer do, we also have to repair

all launching their own initiatives, pledges and targets. What this adds up to is that where once ESG was seen as an annual consideration – a page in the annual report; a carbon target for the coming year – it is now very much a real-time necessity. The message from stakeholders is becoming increasingly clear: ‘Not damaging’ will no longer do, we also have to repair. Companies are expected to turn their innovation towards ESG by focusing it on product and service development. STRATEGISING ESG In October, we saw JP Morgan commit to remedying the racial wealth gap, when the firm committed an additional $30 billion over the next five years to provide economic opportunity to underserved communities, with a specific focus on the Black and Latinx communities. “Systemic racism is a tragic part of America’s history,” said Jamie Dimon, JPMorgan Chase & Co’s CEO. “We can do more and do better to break down systems that have propagated racism and widespread economic inequality, especially for Black and Latinx people. It’s long past time that society addresses racial inequities in a more tangible, meaningful way.” Meanwhile, GSK committed to having a ‘net positive impact on the planet’, by launching ambitious new green goals and a commitment to having a “net positive” impact on the planet by 2030. The pharmaceuticals giant will equip all sales staff with electric vehicles, use 100% renewable energy at all sites and commit to zero waste across its complex supply chain. Single-use plastics will be eliminated, except for those critical to product development, health and safety, and regulatory requirements.

I FAmagazine.com

Februar y 2021

And Walmart not only committed to net zero, but also aimed at becoming regenerative. The retail chain pledged to “protect, manage or restore” a million square miles of ocean and 50 million acres of land by 2030. It also plans to achieve zero waste in its own operations in the US, Canada, Japan and the UK by 2025. But much like other companies, a large proportion of Walmart’s impact on the environment comes via its suppliers and how its shoppers use its products. Walmart’s Chief Sustainability Officer Kathleen McLaughlin added that “we are trying to essentially transform the way that consumer supply chains function right from source through to consumer and end of life.” These three massive commitments have much in common. They are highly convincing, powerful statements of intent, and ones that require continuous, real-time activation. These are the antithesis of the ‘greenwashing’ tendencies we have seen in the past, giving opportunities for these brands to constantly provide firm evidence that they are bringing ESG issues into their overall strategy in a meaningful way. The size and frequency of these big ticket ESG announcements suggest that corporates are fully aware of the pressure that they are now under to comply with the needs of their stakeholders to a far greater degree than before COVID-19. I believe that the pandemic supercharged the gradual transformation to a stakeholder capitalism model as positioned by the Business Roundtable, and I expect to see far more of this in 2021 and beyond.

About Alberto Lopez Valenzuela Alberto is alva’s Founder and CEO. He has spent more than 25 years working in business information and analysis. Alberto is a recognised business thought leader who has been a Visiting Professor at Cass School of Business and is a regular speaker on a variety of issues, including the business impact of reputation, data analytics techniques and personal experiences as an entrepreneur. Alberto’s book, The Connecting Leader, examines how corporate leaders connect businesses with society, especially in this age of hyper-transparency, interconnectivity and media anarchy.

Februar y 2021

BUSI N ESS PLAN N I NG

AUTOMATION, THE NEXT STEP FOR

FINANCIAL ADVISERS Whilst Covid-19 has ratcheted up the use of technology in financial planning businesses, Joe Norburn, CEO of Recordsure, argues that now is the time for firms to integrate innovative solutions to ensure future success

odak invented the world’s first digital camera, then they killed it, in order to preserve the lucrative business model of selling film to photographers. The inventors of the next generation technology refused to accept change and prioritise innovation. In 2012, the once market leader filed for bankruptcy, having lost millions in potential revenue from not patenting the technology. No industry is exempt from innovation and change. The ones which predict and react with the times are the ones who succeed in business. The financial services sector is no different. Automation is your digital camera. It’s the next step in the evolution of the industry, it’s due to add £385 billion to the financial sector. Instead of fearing the change brought on by it, independent financial advisers must utilise it, invest in it, and integrate it into their operations. Regtech adoption is being accelerated as a result of the Covid-19 challenges of remote working, and limited interactions. However, with every closed office door new ones are opening and opportunities to manage and track

interactions better and smarter are becoming clearer and easier to utilise than ever before.

No industry is exempt from innovation and change. The ones which predict and react with the times are the ones who succeed in business.

AUTOMATION: WHERE DOES IT THRIVE? Robotic Process Automation (RPA) is a tool to speed up tedious, repetitive tasks, such as administration tasks and form completion. It performs a series of predictive tasks that are programmed to act in a set order in response to a certain situation. It works best when faced with formulaic patterns that it can decipher and understand. Danske

I FAmagazine.com

BUSI N ESS PLAN N I NG

Februar y 2021

Bank recently shared their RPA innovations to a Deloitte Finance Agenda. They have developed a robot that uses Artificial Intelligence (AI) to transfer data collected during an onboarding meeting to fill out customer account forms, speeding up the process dramatically and saving Danske a large sum of money.

More visible records can help IFAs work much quicker, many have seen a time saving of more than 14 hours a week thanks to this innovative solution. They have also reported huge cost savings, which is unsurprising in such a valuable industry where the average salary is in the UK is £93,000, making the hourly wage for expert advisers over £46p/h.

Automation is a tool that expert IFAs can use to deliver a more complete offering in less time, sometimes with human-level accuracy, all while ensuring compliance. It will always require a human to deliver the valuable client care and service that IFAs are renowned for, however, automation combines with the adviser to create processes that use both their strengths well. Instead of a highly-skilled adviser and their team completing administration processes, they can use the automation to do this, getting the best out of the human to deliver value to the client.

Clarity and transparency are incredibly valuable to the financial services industry, with some auto-transcription software advisers are able to add metadata, which helps identify and procure exact data which help speed up processes like refuting complaints and backing up adviser behaviour. In some cases, advanced AI can be used to extract specific data from conversations which optimises the search and retrieval process even further.

Automation is a tool that expert IFAs can use to deliver a more complete offering in less time, sometimes with human-level accuracy, all while ensuring compliance

Another main draw of automation is the reduced operating costs for businesses that implement autonomous solutions. Implementing AI can create a cost saving of up to 30-50%, allowing the business to either pass this saving onto clients or work more profitably. In addition to the cost draw, when scaled up to hundreds of clients with thousands of conversations, autonomous processes can deliver consistent, high-quality reports that serve to enhance the reputation of the firm as a whole. AUTO-TRANSCRIPTION TOOLS The financial services industry has seen the development of many types of automation such as RPA and Enterprise Resource Planning systems, however, none have been more impactful than auto-transcription software. The industry has experienced diverse use cases for automation, such as client service, trade settlement procedures, and compliance.

I FAmagazine.com

Advisers can utilise some of the most advanced tools on the market to verify information that they need to ensure is 100% correct, as the software keeps a record of every word spoken. For IFAs, this is vital to ensure they don’t have to return to conversations and can move forward with accurate recommendations. If IFAs wish to reach the next level and unlock future opportunities, they must integrate innovative solutions and not let them pass by. They must optimise operational efficiencies and use automation to manage repetitive processes. IFAs can’t let automation gather dust like Kodak. They must use them and change the game.

About Joe Norburn Joe Norburn joined Recordsure as CEO in 2018 having been a friend and supporter of the company for a number of years. Much of Joe’s career has been spent in financial services, either for banks directly or in companies that serve and partner with them. He has also acted as an advisor to a number of early and growthstage companies. Prior to that, he was Managing Director and a member of the Executive Committee at Coutts, where his responsibilities covered Digital, Innovation, Business Development, Client Experience and Learning & Development. About Recordsure Recordsure provide game-changing speech and document analytics for regulated industries. Launched by experts with years of experience in financial services and compliance, they deliver tools that are specifically designed for the sector.

Februar y 2021

STRATEGIC PLAN N I NG

DO IT WITH

PASSION OR NOT AT ALL

These are wise words but do we always heed the advice they give us? As 2021 gets underway, despite the impact of Covid-19, Michelle Hoskin has sound and practical tips on how you can boost the success of your business and build the life you love into the bargain.

ision. It’s a tiny word which has well and truly been drowned out by all the noise around Covid-19, lockdown, government decisions and of course more study, more exams and the dayto-day complexities of running a professional practice in financial services. Without wanting to sound like a broken record (here I go again): we all know that the only way to create any level of success is to keep all those playing the long game firing on all cylinders. We need to make sure that their batteries are properly charged, and that they are feeling so good it’s as if they have been shot out of a rocket as opposed to shot by a rocket! And that is exactly how I want us all to feel as we bounce: suitably relaxed and recharged. BANG THE DRUM So here we go. I know where the drum is and let me be clear – it needs a good old bang to get us suitably fired up

to take on what I am sure will be an equally challenging and crazy 2021. As the innovator, the visionary, the financial planner, the financial adviser, the business owner and of course the leader of your people, you need to hear me. LOOK IN THE MIRROR So, let me ask you to look at yourself now. How energised are you? Are your batteries charged or are you running on

The fallout from the work that you do and the demands and challenges that you face are slowly but surely sucking every last ounce of energy and life out of each single one of you

I FAmagazine.com

STRATEGIC PLAN N I NG

Februar y 2021

empty? Are you ready to be shot out of a rocket or do you feel like you’ve just been shot by one? I suspect the latter is true. But how come?

charged, the barrel loaded and ready to feel like you have literally been shot out of that rocket!

I was once asked to speak at a conference where the theme was ‘energise advice’. Honestly, I actually thought it was a joke. When I was asked how I intended to do that, my response was quite simple. To energise advice, we have to energise those giving it.

BUT THERE IS A BUT

And let me tell you, you are going to need more than the usual CPD to gen up on that one! I see it every day. The fallout from the work that you do and the demands and challenges that you face are slowly but surely sucking every last ounce of energy and life out of each single one of you. Add Covid-19 to the equation and we have a sector of planners and teams who are literally exhausted. BACK TO THE FUTURE The best thing about the future is that it hasn’t happened yet. The even better thing about the future is that, when it does happen, it is going to be one day at a time. Each of us are faced with enough distractions to sink a battleship right now, so let’s kick the non-essential distractions into touch and start 2021 as we mean to go on. Now, I might not have a magic wand (well, I do!), but this one is all on you. I believe that, right now, you are holding the magic wand to your business but you just need to be shown where to point it and how to use it. It’s time to not just survive but thrive. To do this, you need to be firing on all cylinders. Your batteries need to be

I FAmagazine.com

Ok there is a BUT and it is a big BUT. It has been tough and I’m under no illusions that we are done with this awful pandemic – the pressures will keep coming. No one has had it easy and none of us are getting out of this unscathed. This is why your purpose and what you are trying to achieve have to be greater than the pain you are going to feel achieving it. Let me ask – who or what is on your mind when you make decisions? Is it you, your family, your lifestyle, your team or even your friends? Or are you making decisions in the best interests of your business as a whole? Decision-making seems to be a real stumbling block for many business owners. I don’t know why that is, as they seem to make such an easy job of it when they are doing it every day on behalf of their clients. The truth is that every decision you make has to do one job and one job only: to take you and all who share your journey with you one step closer to achieving the true vision of the business. Nothing else – just that. REACH FOR THE STARS – ONE STEP AT A TIME Once the big decisions have been made it is pretty simple. By making the tough calls, the little decisions will make themselves.

Februar y 2021

STRATEGIC PLAN N I NG

This of course needs your vision to be crystal clear. It has to be seen and understood by all those who need to play their part. It has to be seen with laser clarity and like your lives depend on it. A watered-down version of nothingness will be sure to get washed up on the ‘I once had a dream’ shore of life.

My purpose is and will always be greater than any pain I feel… so get the hell out of my way, I’ve got stuff to do!

Don’t become a victim to a lifetime of focusing on everyone else and never getting round to building the business that you know you can and the life that you truly love. Now you may very well already be on your own journey, firmly following plan A. But stay focused, don’t get distracted or disheartened. When you feel like you are constantly putting out fires, remember that there will always be things and probably people who seem hell-bent on trying to bump you off track. When this happens – and it will – remember these words: my purpose is and will always be greater than any pain I feel… so get the hell out of my way, I’ve got stuff to do!

Wishing you a happy and healthy New Year. Let’s make the most of 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.

I FAmagazine.com

FOR PROFESSIONAL INVESTMENT SPECIALISTS

M AGAZINE

LOOKING FO RWA RD F E B R U A R Y 2 0 21

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

M AGAZINE

With you for the long term GB Investments is a campaigning and information platform for the financial adviser community. Focussing on tax efficent investments such as EIS, Seed EIS, VCT and BR, our primary objective is to help you make informed choices for your clients, through in-house editorial and accessible research. Our platform brings the reader on a journey the whole way through to the portals of the trading platforms. We believe that now more than ever these investments need to become mainstream and to encourage and support this important sector we have included GB Investments within IFA Magazine. Our in-house editorial team produce articles that cover the core investment types as well as offering on-going insight into successful exits and new launches in the market

Visit ifamagazine.com/news-gbi/ to subscribe to our newsletters. Or e-mail alex.sullivan@ifamagazine.com for more information.

www.ifamagazine.com

N EWABLE

Februar y 2021

EIS THE DRIVE TO THRIVE GBI Magazine talks to Sanjeev Gordhan, Director at Newable Ventures about why – and how - the group’s sound business strategy can help deliver potentially higher returns for EIS investors

ewable Ventures connects earlystage investors to some of the UK’s most promising SMEs and start-ups through EIS and SEIS. In particular, it offers the opportunity for investing in high growth, disruptive companies. The group prides itself in offering not just capital, but an eco-system of tailored services including advice and flexible workspaces to equity investment. Having secured the British Business Investments’ commitment of £10m in 2020, Newable are well placed to increase their level of investments over the coming years and help more and more businesses to thrive. This, along with their fund growth, will provide the platform to become one of the best pre-series A EIS funds in the market. The Newable Group focussed on supporting start-ups and SMEs across the UK and last year supported in excess of 25,000 SMEs, a figure reflective of that fact that Newable has been helping early stage businesses for over 35 years. Sanjeev links the history of the Newable Group to the Funds success, which was acquired by the group in 2017 and now plays a leading role in the venture capital EIS space.

I FAmagazine.com

Having secured the British Business Investments’ commitment of £10m in 2020, Newable are well placed to increase their level of investments over the coming years and help more and more businesses to thrive

GETTING INVOLVED The Newable group pays close attention to these businesses with an established and complementary organisational structure. Sanjeev explains, ‘it can be challenging to really support portfolio business businesses but in our case it’s just a matter of speaking to our colleagues in other parts of the Newable Group. .’ He highlights a great example of this structure in action. ‘One business came to our attention

Februar y 2021

N EWABLE

that we had invested in 2017/2018. Once the investment was completed, and had secured sufficient runway to look at international expansion, we involved them on trade missions to India and Russia.’ The company ended up winning contracts in both countries. It goes to show that Newable really gets involved and having provided capital, it looks to support business in a myriad of ways; In its early days, the group supported businesses predominantly from London. However, as they’ve grown, they now provide services across the UK. One of the most innovative ways that they do this is through providing flexible workspace. Sanjeev elaborates, ‘the space part of our business is probably the longest-standing because we’ve always had property on our books and it’s a matter of how we’ve adapted the model.’ The most recent leap came with Newable’s acquisition of Citibase, a business which enables SMEs and Start-Ups to use flexible office space. Sanjeev is quick to highlight Newable’s position in this market, explaining ‘we fit in between Regis and WeWork. For us, as investors, we don’t want these small businesses spending ridiculous money on offices we want their initial stages to be as efficient as possible.’

have to tie into any services as such but they’ve got access to lots of things that will help them, whether that be workspace or advisers and of course obviously capital. This goes full circle to the investors, the better we are able to support our businesses, the more successful are investee companies are – which ultimately feeds into higher valuations and returns for investors. It is in my view one of the reasons why Newable has seen such a low failure rate in comparison to the EIS industry generally.’

The huge changes in working habits over the course of 2020 and the global pandemic leave Newable uniquely placed to adapt to these societal changes

THE PROCESS OF SELECTION AHEAD OF THE CURVE Sanjeev explains that Newable now has 60 locations across the UK, from Southampton to Aberdeen and emphasises that the huge changes in working habits over the course of 2020 and the global pandemic leave Newable uniquely placed to adapt to these societal changes. For many start- ups that have come through incubators and accelerators, there’s often the difficult question – what’s next? For many start-ups that have raised a post-seed funding round they find that they have outgrown their accelerator, and that’s when Newable can be especially helpful to them. Sanjeev explains, ‘we’re like an accelerator plus. They don’t

Another key contributor to Newable’s low failure rate is their selection process. Being well-established, Newable’s networks with universities, accelerators, spin outs and seed funds is stellar. Sanjeev notes that the proprietary part of the group’s deal flow likely differentiates it from much of the industry, as ‘businesses come to us before anyone else, because they want access to our services.’ Newable’s advice team may help a business get into different territories or extend R&D and then approach the investment team. The group’s full process of selection is scrupulous. It starts with analysts looking at the opportunities and providing an

I FAmagazine.com

N EWABLE

initial screening. This proposal goes to associate level and then they work in tandem to develop a deeper understanding of the company. THE PROCESS OF INVESTMENT Newable’s investment team has a weekly pipeline meeting, when they discuss each of these opportunities that the analysts and associates are seeing. If a business makes it past the investment team then an investment director will ‘buddyup’ with a member of the investment committee. The group’s investment committee is another important facet. It consists of six independent investment professionals who represent multiple later-stage funds, or other types of investment houses. Sanjeev explains ‘depending on the type of investment we’re looking at, we’ll match the experience of an individual committee member so they can help the Investment Director build the potential case for that business, and present it to the investment team and committee.’

Over the last year, medical technology has seen stunning successes amongst EIS firms. It’s been a big part of Newable’s fund and will continue to be

PROVIDING SUPPORT One key challenge in 2020 was ensuring that Newable was supporting their portfolio companies throughout the pandemic and ensuring that they had sufficient runway.

I FAmagazine.com

Februar y 2021

They facilitated this by the organisational structure already in place. In today’s climate, it is clearly important for the group to maximise the financial runway when investing, to mitigate any potential issues around raising finance. ‘Whether it’s increasing the round size or looking at what levels we have to put into the business in terms of their overheads and their costs, , these are the things we’ve been looking at a little bit more.’ Over the last year, medical technology has seen stunning successes amongst EIS firms. It’s been a big part of Newable’s fund and will continue to be. Sanjeev emphasises ‘there has been a lot of hype around medical technology but now we’re seeing some really good quality businesses here.’ Not getting complacent, Sanjeev concludes with a caution. ‘We’ve tightened our due diligence, especially at this moment in time. What we have noticed is that there is a lot of noise in the market with an increased number of companies looking to raise capital, so we have to ensure our due diligence is even more in-depth.’ Clearly, Newable are well-placed to thrive in the EIS market and are eager to continue capitalising on their considerable strengths and assets to identify, nurture and growing businesses into becoming future success stories. 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.

BLACKFI NCH

Februar y 2021

NEWER VENTURE CAPITAL TRUSTS:

A STRONGER OPTION FOR CLIENTS

As the tax year-end approaches, Vince Keen, Blackfinch, highlights the reasons why he believes that advisers should consider the benefits of newer VCTs as part of the due diligence process

ESTABLISHED TAX PLANNING TOOL

established, and all subject to HMRC’s strict criteria, investors can consider the benefits of newer offerings.

2020 was a silver anniversary for Venture Capital Trusts (VCTs). It is over 25 years since the UK Government launched these tax-efficient vehicles to encourage support for new and growing firms. To offset investment risk, VCTs offer 30% Income Tax relief (minimum holding period five years); gains exempt from Capital Gains Tax on sales of shares; and no Income Tax on any dividends.

These may offer greater growth potential through a more concentrated portfolio of high-quality, early-stage companies. Firms’ adaptability and resilience in the face of the pandemic are now integral to investment teams’ considerations.

Over the years, they’ve become popular with investors, reflected in fundraising amounts. In the tax year 2019/20, VCTs raised £619 million. While, due to the impact of the coronavirus pandemic, this was lower than in 2018/19, it reflects the continued appetite for VCTs. (Source: The Association of Investment Companies, 2020). With tax mitigation always high on the agenda, VCTs continue to feature in client portfolios. BENEFITS OF NEWER VCTS Within the VCT investment landscape there is a wide range of offerings. Investors can select from older VCTs, with many operating since the 1990s, through to newer VCTs launched in the last two years. With VCTs so well

Shares in innovative new firms, that are well positioned for the future, can help to deliver excellent growth. This is alongside creating more diversification in a client’s portfolio. These kinds of investments can also make for a greater positive environmental, social and governance (ESG) impact. It’s worth exploring these aspects in more detail. HIGH PERFORMANCE HURDLES Older VCTs will contain a portfolio of mature holdings which might, on first glance, appeal to investors. However, one possible drawback of investing in these vehicles are fees which could dilute future returns. Many of these VCTs will have long ago passed through their hurdle for performance fees, which could dilute future growth for both existing and new investors. In contrast,

I FAmagazine.com

BLACKFI NCH

newer VCTs will need to surpass their hurdle before a performance fee is payable, rewarding those investors with a greater share of the growth. UNLISTED, TECHNOLOGY-ENABLED COMPANIES There’s also a question around how well equipped older VCTs’ investee firms are for the pandemic, and the postpandemic world.

A new VCT has three years to deploy a minimum 80% of its capital into qualifying companies, with 30% of this needing to be invested within its first two financial years

This is another reason to consider newer VCTs. They will likely be focused on pioneering early stage, unquoted companies (which are not directly correlated to the listed companies/market volatility). Newer VCTs may also be investing in technology enabled firms. As these businesses are often web-based, offering their services online, they’re able to meet the pandemic head on. They could in some cases even benefit from upheavals. As

I FAmagazine.com

Februar y 2021

customer trends evolve due to social distancing they can start to serve new requirements. One effect of the pandemic has been to accelerate the adoption of digital technologies by several years. Technologyenabled firms have therefore typically been least impacted by global lockdowns, and quite often the beneficiaries of them. Newer VCTs, especially those with a technology focus, are likely to have a much higher concentration of such firms in their portfolios than older ones. It’s useful to note that a new VCT has three years to deploy a minimum 80% of its capital into qualifying companies, with 30% of this needing to be invested within its first two financial years. This gives the investment managers time to assess deals over time, and gradually build a diverse portfolio of firms with strong post-pandemic growth prospects. PROSPECT OF DIVIDENDS Investing in a newer VCT can therefore bring the prospect of dividends. These could include special dividends from early exits, along with the objective of paying regular dividends in the future as the VCT matures. IN-BUILT DIVERSIFICATION An important aspect of newer VCTs is that they can help bring greater diversification into an investor’s portfolio. Most VCTs will have this effect, by giving investors exposure to smaller companies. However, with many newer VCTs investing in tech-enabled firms, investors can increase diversification through holding

Februar y 2021

BLACKFI NCH

technology-related investments in their portfolios. Such investments these days can be in almost any sector. As teams invest at varying stages of growth, and across sectors, this can help to add more layers of diversification. Adding a VCT of this kind to a portfolio of existing mature VCTs can also increase diversification. This is through holding investments at different stages of maturity, with different VCT managers, employing different strategies. POSITIVE ESG IMPACT As investor demand for ESG-focused solutions grows, another benefit of newer VCTs is that they’re a way in, enabling people to support firms making a positive impact. Within the realm of tech-enabled firms, companies are often more likely to score well on ESG factors. Many of these firms, spanning sectors from health to education, offer solutions that can change the way we live and work for the better. And in terms of their own operations, they will be working with ESG at their core. Beyond individual firms’ output, there’s also a positive ESG impact more generally from supporting new, growing UK companies. They can strengthen the future UK economy through creating jobs and generating tax payments. They can also help to ensure that the UK remains a world leader in business, particularly in the area of innovation. SELECTING A NEWER VCT In considering newer VCTs to present to clients, advisers can look at providers that are taking a fresh approach. Those that offer value-based fee structures, clear technology mandates, tax-efficient expertise and a commitment to ESG, will be best placed to support advisers. This can help advisers in selecting from newer VCTs to find strong solutions for their clients.

SOLUTIONS FOR INVESTORS AND SUPPORT FOR ADVISERS Blackfinch works in partnership with advisers to help meet their clients’ investment needs. A specialist in taxefficient investing, it develops solutions in response to adviser feedback. The Blackfinch Spring VCT is a newer VCT launched in 2019. It invests in early-stage technology-enabled firms with high growth potential, a strong focus on innovation, and underpinned by clear ESG values. The next share allotment date is 29th January 2021. The final application deadline is 28th January 2021. A 1.5% early bird discount is available for applications received by 28th January 2021, then reducing to 1% until 1st April 2021. For more information email enquiries@blackfinch.com, call 01452 717070 or visit www.blackfinch.com. CAPITAL AT RISK. Please refer to the product literature for all risk warnings applicable to the Blackfinch Spring VCT

About Vince Keen Vince Keen is Senior Business Development Manager, Blackfinch. Vince brings over 30 years’ experience in financial services, including 11 years as a Senior Business Development Manager at Octopus Investments, specialising in tax efficient investments. Vince began his career with TSB Bank, and then spent eight years as a financial adviser before becoming an IFA within a large regional practice. He then spent three years as a Business Development Manager with Aegon before moving to Octopus in 2008. He holds the Diploma in Financial Planning.

I FAmagazine.com

E IS AN D SE IS

Februar y 2021

IS A

CHANGE GONNA COME FOR EIS AND SEIS?

As Chancellor Sunak prepares for his March Budget and the tax year-end looms, should advisers and paraplanners be bracing themselves for change to the EIS and SEIS landscape? EISA’s Mark Brownridge is in optimistic mood as he outlines why he believes you should keep talking to your clients with confidence about EIS and SEIS

e are approaching the long slog that is the march to the tax yearend in April, a supremely busy time for everyone involved in our sector. Just as well there is nothing else going on in the world right now!! To add to the usual tax year-end madness, with the November 2020 Budget having been postponed until 3 March 2021, potentially there are also a number of tax and other economic rule and legislation changes to contend with. And just at that pivotal moment you are making your client recommendations! STICK OR TWIST?

Such uncertainty is unwelcome and financial planners are left with having to guess whether to stick or twist. Do you ‘twist’ and make recommendations based solely on rumours and heresay as to possible changes? Or do you

I FAmagazine.com

‘stick’ and risk a ‘keep calm and carry on’ approach? You could be damned if you do and damned if you don’t. Who’d be a financial planner?

It’s clear that the Government needs to raise large amounts of money after a tumultuous 2020, economically speaking

And of course, this next Budget could be a humdinger. It’s clear that the Government needs to raise large amounts of money after a tumultuous 2020, economically speaking. It seems all bets are off as to where they will focus on trying to raise that money from. We have already seen CGT recommendations from the Office of Tax Simplification as

Februar y 2021

E IS AN D SE IS

well as IHT recommendations, threats of pension tax relief being cut and that old chestnut, a wealth tax. Desperate times call for desperate measures.

• Average employment growth for EIS funded companies is 86%.

WHAT ABOUT EIS AND SEIS?

• Within a year of investment, each £1M invested in EIS creates 4 jobs

Of course, EIS and SEIS offer investors exceptionally generous tax relief schemes themselves. So could they be in the firing line? We think not, for a number of reasons. This article sets out why.

Just short of 4,000 companies received EIS funding in 2018/19 meaning the schemes can justifiably claim to have created 24,000 jobs in that one year alone. Expanding the schemes can multiply that figure even further and keep our young, entrepreneurial companies on the path to growth. In addition, for every £1 invested into EIS qualifying companies, those companies deliver back £2 in additional revenue.

Firstly, we have spent the last few months researching the UK early-stage business funding ecosystem. Our campaign, entitled “Reigniting the UK’s entrepreneurial ecosystem” highlights the funding gaps that currently exist and makes recommendations to address these in order to boost the UK economy post-pandemic. You can read the report here - Reigniting the UK’s entrepreneurial ecosystem - EISA. In short, what we found was that pre-pandemic, early-stage businesses often struggled to raise equity finance due to market failure and ‘funding gaps,’ where credit markets failed to supply sufficient finance to fulfil demand. Covid19 has widened these gaps. The pandemic has adversely affected the supply of debt and equity finance for all firms. However young, small and innovative companies face a disproportionate burden and many were not eligible for any of the Government’s Covid-related funding schemes. The total equity gap by investment stage in 2019 suggests £768m is required at seed stage; £1.45bn at venture stage and £4.45bn for growth finance. The northern regions, East Midlands, Yorkshire and Humberside, West Midlands, and the North West, have the largest shortfalls. BETTER TOGETHER We advocate that public and private sector partnerships will be increasingly important going forward. Addressing the issues which are identified in our report will need to be done by a collaboration which the Government has the ability to kick start. It must include the private sector particularly as we seek to address regional imbalances that existed pre-Covid19 but have now been exacerbated by it. Clearly jobs are also a priority. This reports highlights that EIS and SEIS investment in an early-stage business help it to employ more people. Our survey discovered that:

• On average, companies employed 6 additional people as a direct result of their EIS investment.

Our overriding aim is to preserve and maintain EIS and SEIS. These are schemes not only with a long and distinguished track record of delivering targeted equity funding to companies who otherwise struggle to access much needed finance but also provide extremely valuable and increasingly rare tax reliefs to individuals who are an important but often overlooked source of equity funding. As the Government considers new measures and funding programmes, EIS and SEIS must play a part alongside these and not in replacement of them. IF IT AIN’T BROKE… Secondly, Chancellor Sunak has been a long-time supporter and admirer of EIS and SEIS. As recently as December 2020, he was quoted as saying “the world leading EIS and SEIS schemes offer significant support to small businesses”. The schemes are recognised as being effective and delivering funding to companies at the appropriate and relevant stage of their development. In other words, if it ain’t broke, don’t fix it. EU STATE AID Thirdly, one of the biggest blockers to making changes to EIS and SEIS has always been EU State Aid. Both the EIS and SEIS schemes come under EU State Aid, meaning any changes to legislation the UK Government

I FAmagazine.com

E IS AN D SE IS

Februar y 2021

wishes to make to the schemes must be ratified by the EU before they become UK law. This ensured that the UK couldn’t use subsidies to give British businesses an advantage and undercut other EU countries. Under the Brexit deal, the UK will be able to set its own rules albeit we will need to create a body (think UK State Aid) to oversee its own subsidy control regime. There is still a lot of discussion taking place about what this will ultimately look like but it should give the UK slightly more control over the legislation affecting EIS and SEIS. It means that we will not need to run to Brussels every time we desire to amend the schemes in some way or form. Perhaps more importantly, it also means we won’t be subject to legislation imposed by the EU and over which we have no say. This means the shackles come off somewhat potentially which allows for quicker and far-reaching changes to take place should that be deemed to be politically and economically advantageous.

MR. BRIGHTSIDE

COVID-19

So, please talk to your clients with confidence about EIS and SEIS. Many of today’s huge companies started out a time of economic crisis (think Airbnb, Uber etc). There are exciting investment opportunities out there and I can confidently predict that a tech titan of the future will be British and EIS or SEIS funded.

Lastly, over recent months, we have seen the pandemic get worse rather than better. As I write this, as a nation, we are back in lockdown. Clearly, this has a huge, detrimental knock-on effect to the economy. Therefore is this time to be making sweeping, wider-ranging tax rises and cuts to reliefs? Probably not. Be in no doubt that time is coming and collectively we will all need to pay for the extremely

Clearly, I can’t end this article on such a downbeat note so let’s look more positively. Confidently, I predict that EIS and SEIS are in good health and not currently in the Government’s crosshairs. I say that because it’s important to remember the purpose of the schemes and who they ultimately benefit. And that is to provide early-stage businesses with access to equity funding that they would otherwise not be able to access. The Government believes that this is funding that both they and traditional funding sources are unable or unwilling to supply so they turn to private investors to bridge this gap and motivate them to do so through tax reliefs. The Government isn’t particularly interested in the investor. It is early-stage businesses which are their concern and every statistic and piece of data show very clearly that this sector is currently under-funded. It’s not in the Government’s interests to withdraw the schemes at this time and would actually be counter- productive.

About Mark Brownridge

The mood music seems to be that this Budget will be a fairly benign one but be aware of the next one!

expensive but very necessary financial support measures the Government have put in place over the last year. The pandemic may (fingers crossed) be slowly drawing to an end but the economic pain and misery are only, I fear, just beginning. So, the mood music seems to be that this Budget will be a fairly benign one but be aware of the next one!

I FAmagazine.com

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 Personal Finance Society and also sits on the Chartered Institute of Securities and Investments 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.

Februar y 2021

PAR EQU ITY

EIS – LOOKING TO THE FUTURE Par Equity argues the case as to why maturation of the EIS market offers increasingly attractive planning and investment opportunities for advisers and their clients

IS has been part of an adviser’s tax efficient tool kit for the last 26 years and now, more than £2 billion is invested annually into EIS qualifying companies.

EIS is powerful medicine, armed with several appealing features to mitigate some of the risk in early-stage venturing – income tax relief, CGT deferral, loss relief, CGT exemption, business relief, and business investment relief for non-doms. From a government perspective, it makes sense. For every pound of tax relief waived via EIS, the treasury recoups more back in the form of NIC, employment tax corporation tax and of course the second order effects of stimulating SME spending on the wider economy. EIS is one of the biggest drivers of the UKs tech scene, propelling innovation and improving productivity across every sector it touches. EIS Fund Managers have professionalised and developed in line with the maturation and growth of EIS. There is a new breed of manager today, compared with 10 years ago. Historically, VCs had been packed full of accountants, deal-doers, rather than having had their own experience in founding, growing and selling companies. That’s changed. Venture capital managers nowadays are wrapping experience and networks around their portfolio companies and it’s

having a huge impact on returns for clients. Take Par Equity, for example, our returns to investors are sitting at 3.8x money and a 27% IRR across 125 realised investment rounds into tech companies, before any EIS tax relief. DELIVERING POSITIVE CHANGE 2020 will be remembered as a year of hardship, a year of transition and also a year of opportunity. It has heralded a range of new words into common parlance - lockdown and furlough - and our kitchen tables have never seen so much of us, our laptops and never-ending debates about T-cells and government policy! Covid-19 has also hit industry hard, particularly hospitality, travel and entertainment. But we have also seen positive change too. Consider the record-breaking speed at which we’ve delivered new vaccines and what that might hold for other diseases beyond Covid-19, or how the nation ‘walked with’ Captain Sir Tom Moore to raise more than £32m for the NHS. In a similar vein, Par’s EIS investment Current Health has empowered hospitals and supported multiple vaccination trials of tens of thousands of participants around the world with its remote patient monitoring devices, whilst Mallzee (another Par portfolio company) has sold over 120,000

I FAmagazine.com

PAR EQU ITY

Februar y 2021

boxes of clothes, each box supporting a factory worker’s family in Bangladesh for a week through Mallzee’s charity partner SAJIDA. HOW EIS CAN HELP BEYOND COVID-19 There are two major challenges for the UK economy moving forward – unemployment and national debt. Unemployment in the UK is forecast to reach 2.6 million by the middle of 2021. National debt now sits at 101% of GDP, its highest level since the early 1960s. With Brexit now in full swing, it is hard to imagine where we go from here, but EIS is part of the solution. Structural unemployment on this scale needs joined up government thinking – from education reform and widescale training programmes, to the adaptation of employment law and the much-needed investment stimulation. EIS is very much part of the scope to increase investment stimulation and, in turn job, creation. Take Par’s own portfolio of 40 companies, for example, which currently employ 793 people in total. This has supported an additional 100 jobs since March, and we’re forecasting it to support a further 400 jobs during 2021. EIS turbo charges the SME landscape, the backbone of the UK, and we’re not alone in using tax relief to stimulate early-stage venture capital and business angel activities – 9 of the EU-15 have one or more investor tax relief measures in place. As such, it’s common practice to promote innovation in this way. With a growing consensus to raise capital gains tax rates, and possibly income tax too, government can channel more money into SMEs, and the wider economy, through efficient investment tools like EIS. DEVELOPING EIS FURTHER Par Equity is working with the EIS Association on its campaign “Re-igniting the UK’s entrepreneurial ecosystem” - a piece of research supported by Beauhurst and analysing 18,000 companies. The campaign seeks to identify improvements to EIS, beyond the headline tax relief, to stimulate a post-Covid, post Brexit, economy. One possible measure, lobbied by Par Equity, is to increase the carry back facility from 1 year to 2 years. We believe that his small tweak to the rules would improve the EIS

I FAmagazine.com

funding ecosystem and, in turn, increase the use of EIS to support young companies. For financial intermediaries it would provide more time to advise their clients on tax efficient investment opportunities. For investors it would improve the diversification as their investments would be spread across more companies. Finally, for entrepreneurs it would remove the seasonality to the deployment of EIS funding and potentially also increase the amount of funding available. Par Equity is undertaking an adviser survey in conjunction with GBI Magazine on this topic and will then be making a submission to the EIS Association. If you are reading this and would like to contribute, please contact Andrew Noble at Par at andrew.noble@parequity.com Our goal is to make sure we build a sustainable investment product for you and your clients, and we look forward to working with many of the readers of GBI Magazine in the years to come.

Februar y 2021

OXFORD CAPITAL

CAPITALISING ON THE

GROWTH

IN EARLY STAGE COMPANIES As the tax year-end approaches, Richard Roberts, Director, Investor Relations, Oxford Capital, reminds advisers of the benefits of EIS investments as part of their clients’ balanced portfolios

GROWTH OF EARLY STAGE COMPANIES IN THE CURRENT ENVIRONMENT As we approach the end of this tax year, it may be time to start talking to your clients about diversifying their portfolios and consider alternative investment opportunities. At Oxford Capital, we are passionate about investing in early stage technology companies in sectors which the UK is considered a world leader such as fintech, online marketplaces and digital health. While 2020 was a challenging year as start-up businesses navigated the challenges of the pandemic, we have found that it has really concentrated the minds of founders. It has brought out the best in them as they have streamlined and improved their businesses to cope with and take advantage of the situation. A number of our companies have also capitalised on opportunities arising from the Covid-19 crisis, particularly those that have harnessed technology to meet the changing needs of consumers. Our portfolio company, Moneybox (saving and investing app) has seen significant customer growth and an average of £100m was deposited by customers every month in 2020. In July 2020, it closed a £30m series C fundraise. In addition, Curve (the banking platform that combines multiple cards and accounts into

one card), announced this month that it had closed a $95M series C fundraise which it will use to launch the business into the US and expand its reach within Europe. HOW IS RISK MANAGED IN AN EIS PORTFOLIO? For your clients considering a venture capital investment, it is worth reminding them that EIS investing comes with a high level of risk, particularly because investments in unquoted shares are illiquid and can be hard to value. Although when executed well, venture capital strategies offer the potential for high returns. In addition, only a fraction of VC-backed businesses will go on to be sold at a significant profit, generating nearly all of the investor’s total returns, while some companies will grow more slowly than expected, generating only modest gains or breaking even. A high proportion of companies will fail resulting in a loss for investors but with the right choice of alternative asset manager, there are ways to mitigate some of that risk for investors: Diversification is crucial, and not just based on the number of underlying companies, although that is important. You also have to consider the sector, the stage of

I FAmagazine.com

OXFORD CAPITAL

investment, and the maturity of the companies. We believe that the right level of diversification for venture capital portfolios utilising EIS is between 8-12 companies. Timing is also key. At the initial funding round, we will typically invest a small amount of capital, which will translate to approximately 5% of a client’s portfolio. We will then work with that company and typically take a seat on the board to help them grow and develop. If the business meets certain metrics and targets, we will then invest a greater amount, representing say 10%. There is really no better due diligence than working closely with a company for 12-18 months. And if it continues to perform well, we may embark on a third funding round (increasing the holding up to a maximum of 20% allocation). We also co-invest with other large institutional investors which helps to mitigate the financing risk in the EIS portfolio, and also adds further experience and expertise. Often strategic investors will be involved in the later funding rounds, which adds another potential route to exit. Patience – realistically, clients should expect the majority of investments within their EIS portfolio to exit within five to seven years (although it may take longer), because it’s important to allow some time for the underlying companies to grow, and to not sell the strong performers too soon. WHY EIS AS A VEHICLE FOR VENTURE CAPITAL? Through investing in an EIS portfolio, investors can claim back 30% of the amount invested into EIS-qualifying companies against income tax that they have paid, either in the year of investment or carried back against the previous year. Relief can be claimed on EIS investments totalling up to £2m in any given tax year, providing certain conditions are met. There is also the added advantage of loss relief. This means that the downside risk is mitigated at the marginal rate of

I FAmagazine.com

Februar y 2021

Through investing in an EIS portfolio, investors can claim back 30% of the amount invested into EIS-qualifying companies against income tax that they have paid, either in the year of investment or carried back against the previous year

the investor’s income tax rate, whilst the upside potential can be significant. Capital gains can also be deferred from the sale of other assets, in part or in full, by investing an amount up to the value of the gain into EIS qualifying companies. Gains that occurred up to three years before, or one year after, the date of the EIS investment can be deferred. The gain is re-crystallised when the EIS is subsequently sold and CGT becomes payable at the rates prevailing at that time, unless rolled over into another EIS investment. These factors make EIS investing a strong proposition. Richard Roberts, Director, Investor Relations Richard has worked in venture capital for over 12 years and is a member of the Investment Committee at Oxford Capital. His experience lies in strategic and financing transactions for UK SMEs within the TMT, property and clean-tech sectors. Richard’s early career was spent at HW Fisher, a UK Top 30 Chartered Accountants firm, providing advisory services in the wealth management and property divisions. Richard is a Chartered Fellow of the Chartered Institute for Securities & Investment, and the Institute of Consulting. He currently sits on several portfolio company boards.

M AGAZINE

GBI OPEN OFFERS A selection of tax efficient opportunities currently open for investment 48

I FAmagazine.com

Open Offers

EIS

SEIS

Open

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

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

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

I FAmagazine.com

Praetura EIS Growth Fund The Praetura EIS Growth Fund will provide access to a unique selection of innovative growth companies that have an established proof-of-concept and commercial viability. It is intended for investors who want to achieve capital growth by investing in early-stage, unquoted companies which have the potential to increase in value significantly. Praetura 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.

EIS Open

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

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

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.

I FAmagazine.com

Open Offers

BPR Open

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

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

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: • 85+ years experience in EIS. • 247 EIS qualifying investments • 61 companies backed • £84m invested by Par leveraging a further £135m • 9.8 months • 96 days EIS3 • 22 realisations • 3.8x money multiple (before tax relief) • 27% IRR • 4.5 years average holding period.

I FAmagazine.com

EIS Open

30 November 2018

Evergreen

(monthly closes), next closes

31 January 2021 Amount to be Raised:

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.

£10,000,000 (£4,300,000 raised to date)

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 £2.4bn AUM itself.

Minimum Investment: £25,000

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 >£2.4bn AUM – with 27 years group history (including a FTSE-250 Healthcare REIT)

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

SEIS Open

June 2019

Evergreen

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

– solely Scale-Up, and since inception, solely Data, Digital, EdTech & Health – with exciting track record of Venture Investments since 2014 – with meaningful partial exits (+84% first-time score by MJ Hudson Allenbridge)

Jenson SEIS Fund Pioneer of SEIS investments, Jenson have been investing in early stage companies since 2012 with 108 investments. 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). Jenson has a strong pipeline of investment opportunities. Highlights

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

EIS Open

July 2019

Evergreen

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

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

• Target Size - £3 million in respect of the 2020/2021 tranche • Diversified Portfolio Size of 8 to 12 SEIS companies • Eight exits to date with a range of multiple returns from x.5 to potential of x12.

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. • Investee Company Voneus received £10m investment (potentially increasing to £30m) from Macquarie Partners.

I FAmagazine.com

Open Offers

VCT Open

02/10/2020

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 • 1.5% per share for new applications received by 3pm, 31 January 2021 • 1% per share for new applications received after then and before 3pm, 5 April 2021 • 1% per share for existing investors up until 3pm, 5 April 2021 Capital at risk.

IHT Open

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.

I FAmagazine.com

EIS Open

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

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)

I FAmagazine.com

Open Offers

EIS Open

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: • Atelerix: Invested Jan 2018 returning a 2.07x uplift in share price • Cognism: Invested in March 2018 returning a 3.42x uplift in share price • Hummingbird Technologies Invested in March 2018 returning a 2.25x uplift in share price

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.

I FAmagazine.com

EIS Open

Evergreen

Amount to be Raised:

N/A

Minimum Investment:

£100,000

Mercia BIR fund This Business Investment Relief (BIR) wrapper enables Resident Non-Dom (RND) investors the opportunity to very tax-efficiently invest in Mercia EIS Fund. RND investors can use BIR to bring off-shore capital into the UK potentially without taxation, in addition to the generous EIS benefits. Mercia’s EIS Funds have an investment-led venture capital strategy, investing nationally with a focus on the underserved regions; specialising in the identification, creation, funding and scaling of innovative technology businesses with high growth potential, creating a strong investment proposition. Mercia has an Investment Team of industry specialists with venture capital expertise, working extensively with portfolio companies to scale each business with the aim of ultimately delivering shareholder returns. Mercia can fund companies with different pools of capital, initially via its own EIS Funds or other thirdparty funds, and then selectively using Mercia’s proprietary capital. Mercia is therefore able to provide a ‘Complete Capital Solution’ for entrepreneurs and small companies, starting from seed rounds of £100,000, larger rounds of up to £2.0million, and building to funding rounds of £10.0million. Highlights

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

Sustained Deal Flow - the consistency in both value and volume of Mercia's deal flow is hugely supported by deep relationships and networks in each region. Diversified Portfolio - consisting of approximately 15 EIS qualifying technology companies. Advance Assurance - will be sought from the HMRC for each investment. Proactive, specialist asset manager providing capital to regional SMEs (96% invested outside of London). Eight offices across the UK with 90 investment staff and 19 university partnerships. The Mercia Group has a substantial track record of delivering realisations from early-stage technology companies. This EIS fund is managed by a team that has seeded unicorns, and delivered some very high multiple returns for both EIS investors (Clear Review 8x Oct 2020, Native Antigen Company 8.6x July 2020) and Mercia’s other venture capital funds (Allinea 26x Dec 2016, BluePrism 104x July 2019).

EIS Open

Evergreen

Amount to be Raised:

N/A

Minimum Investment:

£25,000

Mercia EIS fund Mercia’s EIS Funds have an investment-led venture capital strategy, investing nationally with a focus on the underserved regions; specialising in the identification, creation, funding and scaling of innovative technology businesses with high growth potential, creating a strong investment proposition. Mercia has an Investment Team of industry specialists with venture capital expertise, working extensively with portfolio companies to scale each business with the aim of ultimately delivering shareholder returns. Mercia can fund companies with different pools of capital, initially via its own EIS Funds or other thirdparty funds, and then selectively using Mercia’s proprietary capital. Mercia is therefore able to provide a ‘Complete Capital Solution’ for entrepreneurs and small companies, starting from seed rounds of £100,000, larger rounds of up to £2.0million, and building to funding rounds of £10.0million. Highlights Sustained Deal Flow - the consistency in both value and volume of Mercia's deal flow is hugely supported by deep relationships and networks in each region. Diversified Portfolio - consisting of approximately 15 EIS qualifying technology companies. Advance Assurance - will be sought from the HMRC for each investment.

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

Proactive, specialist asset manager providing capital to regional SMEs (96% invested outside of London). Eight offices across the UK with 90 investment staff and 19 university partnerships. The Mercia Group has a substantial track record of delivering realisations from early-stage technology companies. This EIS fund is managed by a team that has seeded unicorns, and delivered some very high multiple returns for both EIS investors (Clear Review 8x Oct 2020, Native Antigen Company 8.6x July 2020) and Mercia’s other venture capital funds (Allinea 26x Dec 2016, BluePrism 104x July 2019).

I FAmagazine.com

Open Offers

EIS

SEIS

Open

April 2017

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

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 invested amount (not including tax reliefs) and is aiming to exit investments and return capital three to seven years after the initial investment into the Portfolio Service. GrowthInvest is an independent platform, which provides whole-of-market access to alternative and tax efficient investments for the clients of financial advisers, wealth managers and investors.

EIS

SEIS

Open

Evergreen

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

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.

EIS Open

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.

I FAmagazine.com

CANDIDATES Paraplanner - AM582864 Salary Indicator: £40,000+ Location: SW LONDON •

Highly experienced Level 4 Qualified Paraplanner

•

Looking to reach Chartered status

•

Good technical and systems knowledge including numerous research tools, back office systems and cash flow modelling tools

•

Available immediately due to redundancy

Financial Planner - AW456853 Salary Indicator: £35,000/Flexible for right opportunity Location: NORTHAMPTON •

Excellent Technical Paraplanner with a wealth of experience seeking trainee IFA role

•

DipPFS Qualified, looking to reach Chartered

• Fantastic Pensions and Investments Knowledge • Proficient in the use of various software, including Intelligent Office, FE Analytics and Selectapension

Paraplanner – JB582429 Salary Indicator: £35,000 Location: KENT/SURREY •

Excellent Technical Paraplanner

•

Holds 5/6 R0s, with the last one due to be sat presently

•

Good technical knowledge particularly around Pensions and Investments, alongside being responsible for technical Defined Benefits work

•

Looking for a firm where they can settle and work towards being a Chartered, Career Paraplanner

Paraplanner - KB 577567 Salary Indicator: £28,000 Location: MARKET HARBOROUGH •

2.5 years working for a local IFA firm

•

Close to achieving Level 4 Diploma

•

Good technical knowledge particularly around Pensions and Investments

•

Involved in preparing a range of suitability reports, monthly client reviews, training of junior staff, research, tax calculations and compliance work

•

Seeking next Paraplanning role with long term view to being an adviser in the future

I FAmagazine.com

CAREER OPPORTUNITIES Paraplanner/Trainee Adviser

Job Ref: AM62613

Salary: £25,000 - £50,000 DOE

Location: GREATER LONDON

The Opportunity We are looking for an experienced Paraplanner. The role will involve providing appropriate support for the Financial Planners and liaise with the administration team daily. You will facilitate the smooth processing of new and existing business. You will be on hand to assist with monitoring the performance and work throughout, to ensure standards are maintained and deadlines are met. It is crucial that you will understand and comply with regulations and principles applying to the role. You will have attained CII Level 4 Diploma in Regulated Financial Planning or equivalent or be close to achieving. If you are interested in this position, then please apply now and get in contact to find out more.

Position: Senior Paraplanner/Adviser Salary: £45,000 to £60,000

Job Ref: AW62722

Location: LONDON

The Opportunity During a period of key expansion, our client is looking for an experienced Senior Paraplanner to support the successful Financial Planners of the business. The firm has the flexibility to mould the perfect opportunity around each person’s specific skillset, so there is scope for the role to be tailored somewhat to your requirements. The role is actually a 50/50 hybrid between technical paraplanning and providing telephone advice, so a great stepping stone into full advice later on (where clients will be provided). You will be working in a strong team focused environment where you can develop your career within a prestigious firm, and equally help the Junior members of the team by passing on your existing knowledge accordingly.

Skills • Hold Level 4 Diploma in Financial Planning (AF3/AF7 Desirable) • Previous experience supporting Advisers within an IFA environment • Comprehensive market knowledge with strong technical ability in Private client financial advice • Client facing experience (Advantageous) • Progression towards Chartered status (Advantageous)

Position: Senior Paraplanner Salary: £33,000 - £45,000

Job Ref: LW62191 Location: UXBRIDGE

The Opportunity We are looking for a Senior Paraplanner to join a well established Wealth Management Practice based near Uxbridge who have expansion plans for 2021. You will have the opportunity to work in a supportive team environment where progression is strongly supported especially if you would like to become Chartered. You will be responsible for writing high quality suitability reports for high net worth clients and providing a bespoke wealth management service. Within time there will be scope for either heading up a team and taking on more responsibility in the technical side of the business or developing into a financial adviser. Level 4 Diploma qualified or working towards this, as well as prior experience working with HNW clients provide technical support. If you are interested in this position then please apply now and get in contact to find out more.

I FAmagazine.com

Growth Manager/Senior Financial Planner Salary: £55,000 - £85,000 DOE

Job Ref: 62524

Location: SHILLINGTON

The Opportunity We are looking for an experienced Financial Planner to be responsible for an existing client bank and training more junior members of staff. Ideally, you will be Chartered or close to it, you will be joining a reputable firm of Financial Advisers who have serious and realistic growth plans. Package is flexible and can be tailored the successful person which may include a share plan. This is an employed role where you will look after a small bank of existing clients as well as run the IFA firm in line with profits and growth. You will need minimum Level 4 Diploma. We are seeking people who have a proven track record to maintain client banks but also to generate new fee income too. If you are interested in this position then please apply now and get in contact to find out more.

Position: Paraplanner

Job Ref: KB 62303

Salary: £35,000 - £40,000

Location: DORSET

• Diploma qualified ideally • At least 3 years’ experience • Experience of holistic, lifetime financial planning • Directly authorised, independently owned , Corporate Chartered status firm looking to expand paraplanning team • Fast growing business with lots of room to get involved • Full support for development and qualifications • Flexible working supported and encouraged • Salary and benefits dependent on experience. Free parking

I FAmagazine.com

January 2021 December 2020 was a truly unique way to end the year for most people, but it was not all bad! In fact, quite the opposite. As recruitment company that specialise within Financial Planning recruitment, we saw a record number of people that were looking to recruit which was matched by the job seekers themselves. We saw people that had been in their roles for years, either choosing to, or being forced to look at new employment. January has started with a bang as the pace has not dropped at all. Companies are just as keen to recruit people as they were last year and in many cases are launching into new recruitment budgets so are recruiting more! With more flexibility than ever before, we are speaking with Managers who are able to get their roles signed off, can interview within very short time frames and hire quickly, many do this solely over Zoom and Teams meetings. We have had starters that have not seen their offices yet due to lockdown but most are ok with this. The new normal is now looking a lot brighter. 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.

TELEPHONE

0330 335 8347 Visit the Heat Recruitment website for more details of these and hundreds of other jobs too www.heatrecruitment.co.uk

I FAmagazine.com

Blackfinch Spring Venture Capital Trust

8 Reasons Why Blackfinch Aligned with Clients

High Hurdle for Performance Fee

Blackfinch invests in every company off its own

The performance fee of 20% will only be

balance sheet, ensuring alignment with clients. Also,

taken when the portfolio exceeds the high

the team does not receive contractual bonuses and

water mark, being the higher of 130% or the

instead is incentivised through the performance

highest performance value per share at the end

fee. This ensures that they are focused on selecting

of a given period. This demonstrates our

the best companies, making them successful and

confidence in the great potential of these

targeting timely exits.

underlying companies.

Solid Return Strategy

Expert Team Including Tech Founders

The team invests in high-growth firms. Its criteria

The team includes award-winning tech start-up

include: capacity to grow by disrupting large growing markets, typically of at least £1bn; and the potential for significant returns at exit. Firms must also have delivered on previous funding rounds, and show strong growth and revenue.

founders and technology specialists, who also manage the Blackfinch Ventures EIS Portfolios. This creates potential for the VCT to make follow-on investments in successful investee firms funded from the EIS.

Value-Add Venture Partners

Rigorous Due Diligence Processes

The team aims to appoint value-add non-

The team’s standout processes include checks on

executive directors, to investee firms’ boards,

a firm’s tech and team, and assessing financial, tax,

named ‘Ventures Partners’. With decades of

market and competitor risks. These cover onsite

experience in tech, our Ventures Partners use their

checks by a sector expert; 3-4-hour initial pitch

contacts and expertise, sharing knowledge and

sessions with founders; and leading tax specialists

opening doors for firms.

checking tax status.

Potential for Special Dividends

In-built Diversification

The target is for 5% dividends in 2024. If the

The VCT benefits from diversification at several

VCT benefits from earlier company exits, or exits

levels. It’s invested in a range of companies, at

greater than expected, then Blackfinch will issue

varying stages of growth, which operate in

special dividends.

different tech-based sectors.

IMPORTANT INFORMATION

Capital at Risk. Blackfinch Spring VCT Plc, 1350-1360 Montpellier Court, Gloucester Business Park, Gloucester, GL3 4AH. Registered company in England and Wales Company no. 12166417.

Committed

A shot in the arm | IFAM95/GBI24 | February 2021

Articles inside

EIS – LOOKING TO THE FUTURE

WHY 2021 MAY SEE AN INCREASE

ESG IN REAL TIME