This article is for professional investors only, and not intended for retail investors.
New Ingenious research has revealed that mitigating the effects of IHT, capital preservation and control over assets were listed as first, second and third, respectively, as the most important factors when advising on estate planning1. Indeed, IFAs cited that having confidence that any IHT would be fully mitigated was the most appealing factor when selecting a BR service. This was followed by factors such as the level of investment risk, level of investment return and costs.
A staggering 93% of advisers polled cited speed of IHT mitigation, as well as maintaining access to and control of client assets, as the primary motives for recommending BR-qualifying investments to their estate planning clients. The market for BR-qualifying services has traditionally been homogeneous with financial planning success contingent upon investors surviving two years unless an investor pays for additional insurance cover, which could be as much as 13% of the capital invested. Consumer Duty has brought about a renewed focus on good outcomes, however. As a result, IEP Apex is the only BR-qualifying service that fully mitigates the effects of IHT from day one of share allotment by incorporating complimentary IHT cover into the estate planning service as standard, paid for by the Manager instead of the investor.
Over half (55%) of IFAs believe the biggest challenge facing their business in the future is keeping up with regulatory changes such as Consumer Duty. The research also highlighted that in order to align with the new Consumer Duty rules, two in three (66%) IFAs believe their own research and due diligence processes will need to change to demonstrate how ‘good outcomes’ for retail clients will be achieved. When you couple that with the fact that three quarters (74%) of advisory firms surveyed use third party research firms to create BR panels of suitable investment managers1, this suggests that the way in which advisers work with third party research firms to create such panels also needs to change as part of a industry-wide reset to deliver good client outcomes.
1Research carried out online with 97 IFAs between 13th October – 27th October 2022
2Research carried out via online poll with 436 IFAs in June 2021
3Based on internal research
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