View the article online at http://citywire.co.uk/new-model-adviser/article/a651397
Octopus unveils VCT adviser charging regime
by Rachael Revesz on Jan 16, 2013 at 16:06
Octopus Investments has unveiled its adviser charging regime for Venture Capital Trusts (VCTs) under the retail distribution review (RDR).
For advice received with ongoing charges, the VCT will facilitate an ongoing payment of up to 0.5% of the holding's net asset value for nine years, while the initial charge will be up to 2.5%.
For advice received without ongoing charges, the initial charge facilitated will be up to 4.5%.
For applications made through an intermediary but with no advice given, the VCT will allocate an annual 0.5% for nine years to the adviser, and up to 2.5% initial commission.
This means investors will benefit from the 30% income tax relief on the full amount of their investment before allocating a certain proportion of the funds to the adviser.
If the client agrees lower fees with their adviser, the intermediary can issue the investor with extra shares in the VCT instead.
Octopus managing director Paul Latham (pictured) said the firm wanted to find a solution that enabled investors to benefit from the full tax relief on their investment.
‘This meant finding a way for them to pay adviser charges once their investment was made, rather than carving out some of their investment to pay adviser charges before it was invested,’ he said.
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