The UK government’s post-lockdown tag line of ‘Building Back Better’ is focused on the realisation that we can live in a smarter way.
It also suggests that the UK has the opportunity to be at the forefront of 21st century sustainable innovation.
The government has repeatedly trumpeted three key sectors whose success will enable us as a nation to achieve these lofty goals. The sectors of digital innovation, healthcare advancement and sustainable energy production, are rightly these areas of focus.
Importantly for advisers, this national focus enables them to identify the investment opportunities and sectors where investors could, and probably should, be honing in on.
This is particularly important when considering venture capital and private equity holdings, such as tax-efficient investments.
As an organisation that has spent the past decade, and more, championing these sectors, it is of course good to see real political force now being employed to grow these areas about which we are so passionate.
Aligning objectives
So, what opportunities are there for advisers to ensure that their clients’ objectives are aligned with national policy?
A great place for advisers to start is the tax-efficient investments sector.
There are many pertinent reasons for advisers to look at tax-efficient opportunities more regularly.
Firstly, of course, is the tax planning scenarios.
There are a myriad of various tools available to advisers, with these potentially offering income tax, capital gains tax, dividend tax and inheritance tax mitigation.
Secondly, the exposure to venture capital as a growth-focused portfolio diversifier is an often overlooked planning tool.
In 2021, Hardman & Co published a white paper suggesting that advisers could be significantly improving investor returns by adding venture capital to a portfolio, without increasing overall portfolio risk.
Such thinking is already progressing with a number of forward-thinking advisers but is yet to catch on en masse.
With inflation higher than it has been for a number of years, perhaps the quest for growth is increasingly important.
Thirdly, crowdfunding and cryptocurrencies have created a burgeoning community of investors who want to support new and exciting investment opportunities.
Recently at an adviser-focused event, we asked the room of advisers whether they had any clients with tax-efficient investments and 100 per cent raised their hands.
With clients wanting to dabble in such investments, would it not make sense for advisers to control this process and introduce clients to the Enterprise Investment Scheme or venture capital trust funds where they can access such ‘exciting’ opportunities while being under the umbrella of care of the adviser and an experienced authorised manager?
Harnessing innovation
The UK has a long and proud history of technological innovation and there is no suggestion that this will change.
The challenge is how best to harness this innovative thinking and not only having good ideas but also then creating the best tech companies and the highly skilled jobs of tomorrow.
Digital and tech solutions to real world challenges will enable us, and future generations, to live more efficiently and, if developed correctly, hopefully address significant social challenges.
