Advice firm Oakglen Wealth has partnered with specialist investment firm Toscafund to build inheritance tax planning portfolios.
Speaking to FT Adviser, Dominic Tayler, managing director of Oakglen Wealth in the UK, explained the two firms are “jointly marketing” the new venture.
The new venture will invest in certain shares listed on the Alternative Investment Market.
Those shares were exempt from inheritance tax until the most recent Budget, with a 20 per cent tax rate now applied, rather than the 40 per cent rate applied to other assets.
Tayler, a former executive director at Quilter Cheviot, said the plan arose because the Budget has changed how clients think about inheritance tax planning.
“For many years they were told their Sipp would be their legacy, now they are thinking they will have to move assets out of their Sipp, but then wonder whether they will run out of money in their lifetimes.”
Inheritance tax planning services focused on investing in Aim shares have long been available to clients, but Tayler feels the quality of the investment decisions made has been poor.
He said many of the existing products on the market were run with capital preservation in mind, with the tax break being the reward for the client.
Such strategies, he said, have suffered as a result of a number of the largest and most high profile Aim listed companies performing poorly.
That prompted him to link up Matt Siebert, the UK small and mid cap fund manager at Toscafund, and Martin Hughes, the company’s chief executive, to create the new venture.
The intention is for the Aim IHT service to generate an income of about 3.75 per cent a year.
Tayler acknowledged the level of business this will generate for Toscafund is unlikely to make much difference to the company’s bottom line but said previous relationships have helped here.
He explained how he has known Hughes and Siebert for a long time.
“Martin provided the seed capital that helped to set up Cheviot [where Tayler previously worked] and I have invested in a number of ventures with him. The City works on those sorts of relationships.”
Oakglen Wealth recently passed £1bn in total assets under management, which incorporates the assets of its business in Jersey.
It also incorporates about £120mn of assets which Oakglen manages for Blacktower, an IFA firm.
Tayler said one area of growth he sees for his business in the future is to manage assets for other advice firms, and the model portfolios Oakglen runs are now available on 37 adviser platforms.
david.thorpe@ft.com