Two thirds of platforms are failing to provide advisers with holistic CGT planning support, despite it being an issue they struggle with, new research has revealed.
A study by tax reporting group FSL found fewer than a third of platforms provide tax tools that enable advisers to include off platform assets in their financial plans for clients. This is despite more than a quarter (27%) of advisers viewing this an important functionality.
Similarly, 27% of advisers view scenario planning tools as ‘must have’ features, yet one in four platforms don’t provide them.
It comes as more people are being pulled into the CGT scope, with the latest statistics from HM Revenue & Customs revealing that since 2019/20, 36% more people are paying the tax. At the same time, investigations into unpaid CGT liabilities more than tripled to 14,223 in the 2023/24 tax year.
FSL said that CGT functionality and support given to advisers via platforms is also influencing their platform selection and due diligence, with 76% of advisers stating that the level of support offered to them is impacting which providers they’re choosing to work with.
Separate data from the lang cat’s Analyser software is testament to this, showing that 62% of advice firms selected the need for a CGT calculator when conducting their due diligence and looking for platforms to partner with.
Having this functionality is now one of the top six core hygiene factors an adviser looks for in a platform out of a total 600 options.
Michael Edwards, managing director at FSL, said: “We’re not surprised to see advisers are increasingly concerned about how CGT is impacting their work and clients’ portfolios, especially post-budget. With the Government wanting to raise more revenue, and further hikes to CGT not being ruled out in the next autumn statement this means more demand on advisers’ time.
“It’s good to see many platforms have the absolute basic tools in place to support advisers. Though it’s increasingly apparent that they need more sophisticated solutions to help ensure clients make the right investment choices to maximise any tax allowances and provide them with the right data to ensure they avoid hefty penalties. This sort of activity can be complicated and time consuming for advisers so it’s vital that they’re adequately supported by their platform provider.”
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