Elston Portfolio Management has launched a direct gilts model portfolio service (MPS) for advisers, aimed at higher and additional rate taxpayers.
The solution, which will be available on Transact, will charge a management fee of 0.05%.
Elston has also launched a direct gilts research service for advisers seeking to make individual gilts recommendations. The research service enables advisers to analyse key characteristics of near-term gilts based on their yield, coupon, and maturity.
The firm said that for clients paying a higher rate of tax, selective near-term direct gilts are a smarter alternative to cash deposits or money market funds because a significant portion of their yield comes from tax-exempt capital gains rather than taxable coupon payments. This makes after-tax yields considerably higher for direct gilts than it is for cash deposits and money market funds.
Henry Cobbe, head of research at Elston Consulting, said: “For higher rate taxpayers, near-term direct gilts might be a better, more tax-efficient, alternative to shopping around for deposit rates, or indeed money market funds.
“We want to give advisers the tools they need to offer this service themselves. They can do this with our help on an advisory basis or via the new platform-based MPS. Either way there is no longer a need to refer direct gilts clients away to higher cost direct discretionary managers who structurally compete with advisers in the financial planning space.”
Tom Dunbar, deputy CEO of Transact, said: “We have seen growing interest in advisers accessing direct gilts via our platform both on an advisory basis and via MPS. As a manager-agnostic platform for advisers we welcome continued innovation in the pursuit of delivering good client outcomes.”
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