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Octopus and Transact take the lead in VCT platform development


Octopus Investments has completed a development with Transact to enable shares in its Venture Capital Trusts (VCTs) to be bought and held on a financial adviser platform for the first time. 

Previously VCTs were unable to be purchased on adviser platforms or by a nominee account as they needed to be bought by the individual directly in order to qualify for the tax reliefs.
The launch of the service from Transact, which is an adviser-facing only platform, follows the change announced in the Finance Bill 2014 last year that allows shares in VCTs to be bought by a nominee and qualify for the tax reliefs. Nominee-ownership is a key requirement in enabling financial advisers to manage their clients’ investment on platforms. Prior to the change in rules, VCT shares could only be transferred to platforms once bought, creating complexity for investors and their financial advisers.
The change in legislation has been welcomed by both providers and clients who are pleased to see the government demonstrate its continued support for VCTs by ensuring the product is more readily accessible to a greater number of investors.
Shaun Sandiford, Head of Platform Distribution at Octopus, says: “This development is a significant and important step in helping to meet the needs of our financial advisers. The service from Transact makes it easier for advisers and their clients to access and manage the attractive investment opportunities offered through a VCT. With more and more advisers managing their clients’ portfolios on platform, and with a growing year-round demand for VCTs, we knew it would make a big difference to our advisers if we could get our VCTs on platform. Transact is well known for its innovation, excellent customer service and adviser support, making it the perfect collaboration for us. Together we have worked hard to develop and launch the service and Octopus is proud to be the first provider to get their VCTs on an adviser facing platform.”
Jonathan Gunby, Chief Development Officer of Transact, says: “This development further demonstrates our commitment to providing access to the widest range of assets. We are pleased to have worked with Octopus to simplify the VCT investment process.”
Since their launch in 1995, VCTs have become an established planning solution for advisers and their clients who are looking to access the many benefits of smaller company investing and the tax reliefs they offer. In the last tax year, investment into VCTs reached its highest levels for nine years with VCTs raising GBP429 million from investors in 2014-15. Octopus saw a record level of inflows during this period, raising nearly GBP94 million into its VCTs compared with GBP79 million in the previous year.
Sandiford, says: “At Octopus, we are committed to helping advisers find smart and efficient ways to help their clients manage their financial planning requirements. The introduction of changes in pension legislation together with the cap on lifetime pension allowance mean that an increasing number of people are looking to VCTs to complement their existing retirement plans.”
Octopus offers a range of different VCTs depending on an investor’s particular planning requirements. VCTs currently open for investment include the Octopus AIM VCTs, which invest in AIM-listed companies, Octopus Titan VCT, which invests in early stage high growth businesses, and Octopus Apollo VCT which invests in established small companies that require growth capital. All of the Octopus VCTs will be available to purchase through Transact when open for new investment.
Transact is the leading independent investment wrap platform in the UK with over GBP19 billion of assets under direction in 115,000 client investment portfolios4. Transact is operated by Integrated Financial Arrangements plc, an independent company. The Transact wrap sets itself apart from the competition by consistently being voted the number one platform by independent research companies. Transact received top ratings as Best Platform by Investment Trends 2014, scoring top in 16 out of 17 service categories,  and is ranked first in 34 of 44 service measures, according to Core Data Research 2014.

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