Richard Hoskins, Co-founder, Kin Capital discusses the complexities around KIDs in the tax efficient industry and whether they are beneficial for the end investor
Richard Hoskins, Co-founder, Kin Capital discusses the complexities around KIDs in the tax efficient industry. See an extract of the article below, full article available on FT Adviser here
Key information documents (KIDs) have failed to fix the three main problems with the tax efficient investing industry, according to one firm trading in the sector.
Richard Hoskins, who founded tax-efficient fund raising company Kin Capital, said there was much to commend the section of the industry he works in.
But he identified three issues with the way some parts of the industry work – the expense of products in this space, a lack of transparency and the way performance is “fudged”.
He said he had high hopes that the European Union’s Kid requirements would have addressed these issues.
Under the EU’s Packaged Retail and Insurance-based Investment Products (Priips) regulation, since the start of this year providers now have to produce a stand-alone, standardised document for each investment spelling out costs.
But Mr Hoskins said he felt the rules failed to make the cost and performance of tax efficient investments like VCTs and EIS any clearer as there was no “commonality” with the way firms were expected to list these details.
He also said while there was a breakdown of costs, managers could have been made to be more transparent by being forced to list the whole suite of monitoring and arrangement fees charged to the underlying companies in which the fund invests in the key information documents.
Speaking at FTAdviser’s Tax Efficient Investing event in Birmingham yesterday (24 January), Mr Hoskins warned it was key that advisers understood the charges attached to VCTs.
Full article available here