Experts from PFS, Bankhall, and Hardman & Co. talk new regulation and how you can deliver the best client outcomes.

Consumer Duty and tax-efficient investments

Consumer Duty places focus on delivering good customer outcomes and fair price and value

What should I consider when assessing price and value?

How can I ensure good outcomes for clients?

How do tax-efficient investments fit into the big picture?

Delivering good outcomes and fair price and value

Consumer Duty outlines four key outcomes. Each of these are key to a firm’s client relationship and drive good customer outcomes. The Personal Finance Society (PFS), Bankhall, and Hardman & Co. are among the industry’s leading experts. They want to help financial advisers understand what they should consider when it comes to price and value and good customer outcomes. And that includes understanding how tax-efficient investments might play a role in helping suitable clients.

Consumer Principle

Hear from the experts

Personal Finance Society (PFS)

Bankhall

Hardman & Co.

“Consumer Duty obliges you to get the best outcome for your clients. I believe you should consider adding venture capital to client portfolios as it can lead to better outcomes.” – Dr Brian Moretta

"The price of any financial advice should be appropriate to the cost of delivery. Tax-efficient investments have increased research, time, due diligence and specialist knowledge requirements." – Linda Preston-Todd

“Consumer Duty puts emphasis on showing the value that you’re delivering. And tax-efficient investments can add significant value to a client's financial planning.” – Dr Matthew Connell

Important risks to consider

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 tax rules may change in the future. Tax relief depends on portfolio companies or the VCT maintaining their qualifying status. VCT shares and the shares of smaller and unquoted companies are by their nature high risk, their share price may be volatile and they may be hard to sell.

Cross-cutting Rules

Four outcomes

1. Product and services. 2. Price and value. 3. Consumer understanding. 4. Consumer support.

1. Act in good faith towards retail consumers. 2. Avoid foreseeable harm to retail customers. 3. Enable and support retail customers to pursue their financial objectives.

A firm must act to deliver good outcomes for retail customers.

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Dr Matthew Connell is Director of Policy and Public Affairs at PFS. The Personal Finance Society is the leading professional body for financial planners. It is dedicated to building trust in the profession and has recently developed a new planning approach to help advisers comply with Consumer Duty.

Meet the expert

Meet the experts

John Higginbottom is Head of Regulatory Propositions at Bankhall. Linda Preston-Todd is Client Relationship Director at Bankhall. Bankhall provides specialist support for compliance, regulatory and business challenges. They make it easier for you to focus on providing the best service to clients. They offer Consumer Duty consultations for businesses.

Meet the expert

Dr Brian Moretta is Head of Tax-Enhanced Research at Hardman & Co. He’s an experienced researcher of products and strategies in venture capital. Hardman & Co is an innovative corporate research and consultancy based in London. Its team of sector analysts and market professionals collectively have over 400 years of experience.

To understand whether your existing or future clients are suitable, it’s critical to understand tax-efficient investments. Dr Brian Moretta of Hardman & Co. explains: “The first step, particularly if you're not used to recommending these investments, is to educate yourself. You need to understand the benefits and the risks of tax-efficient investments and venture capital.” “Then you’ll be able to see where tax-efficient investments can deliver value and good outcomes.”

Build a thorough understanding

Learn more about tax-efficient investments here.

Review your clients

Tax-efficient investments could help you achieve better outcomes for a range of suitable clients. Linda Preston-Todd of Bankhall says, “It’s important to review your client bank to see where tax-efficient investments could deliver value and good outcomes, as you would for any investment.” Client planning scenarios are a great tool for exploring how these investments could support your clients.

Why not check out our client planning scenarios?

Use the Octopus product packs

It’s best practice to document price and value considerations and how good outcomes are being delivered. “You've got to think about the commercial costs of providing additional value,” explains Dr Matthew Connell of PFS. “That might be the enhanced due diligence requirements, the additional work needed to ensure a high-risk investment is suitable, or the time needed to maintain specialist knowledge." To help you with this, Octopus has product packs which provide an enhanced level of information to ensure your case files meet the standard required by the regulator.

Download the packs

Three key steps

How you can build a robust business under Consumer Duty, and how tax-efficient investments might support you.

Delivering good client outcomes

Price and value

Avoiding foreseeable harm

Watch the interviews

Tax-efficient investments and good client outcomes. Targeting returns with venture capital while managing portfolio risk.

The added value of tax planning. How enhanced research and due diligence requirements impact price and value. Documenting price and value considerations.

What you must consider in helping clients avoid foreseeable harm. The importance of estate planning and engaging a client’s beneficiaries.

PFS, Bankhall, and Hardman & Co. suggest you take these three steps to meet your obligations under Consumer Duty when recommending tax-efficient investments.

We want to help your business thrive and support you in delivering good outcomes for your clients. Visit the section of our website dedicated to Consumer Duty for more guidance and resources. If you’d like to discuss anything with one of our expert team, please get in touch on 0800 316 2067 or support@octopusinvestments.com.

Supporting you with Consumer Duty

Personal opinions may change and should not be seen as advice or recommendation. Tax-efficient investments are not suitable for everyone. Any recommendation should be based on a holistic review of a client's financial situation, objectives and needs. This communication does not constitute advice on investments, legal matters, taxation or any other matters. We record telephone calls.

Build up your knowledge

Tax-efficient investments could help you achieve better outcomes for a range of suitable clients. John Higginbottom of Bankhall says, "It's important to review your client bank to see where tax-efficient investments could deliver value and good outcomes." Client planning scenarios are a great tool for exploring how these investments could support your clients.

Review your client bank

Evidence price, fair value, and good customer outcomes

It’s best practice to document price and value considerations and how good outcomes are being delivered. “You've got to think about the commercial costs of providing additional value,” explains Dr Matthew Connell of PFS. “That might be the enhanced due diligence requirements, the additional work needed to ensure a high-risk investment is suitable, or the time needed to maintain specialist knowledge." To help you with this, Octopus has created product packs which provide an enhanced level of information to ensure your case files meet the standard required by the regulator.

Supporting you with Consumer Duty

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