Tax-effective investment advice demand set to ‘surge’
- On September 6, 2023
- By GrowthInvest Marketing
Demand for tax-effective investment advice is likely to “surge” in the future, research from HSBC Life has suggested.
The research, The Three I’s of Investable Capital, found 82 per cent of advisers’ clients are higher rate or additional rate taxpayers, but 39 per cent of advisers do not routinely explain the benefits of tax efficiency on investments.
According to clients the latter number is even lower, with only 27 per cent of clients surveyed reporting that advisers routinely discuss the tax efficiency of investments.
This comes despite 98 per cent of advisers saying they believe tax efficiency on capital investments is important to clients and 96 per cent of clients stating the same.
HSBC Life (UK) head of onshore bond distribution, Mark Lambert, explained: “The proportion of clients who are additional rate or higher rate taxpayers will inevitably increase as a result of frozen thresholds, allowances, and exemptions and continuing wage inflation.”
He added that these drivers would suggest that clients are “more likely” to want and need advice on tax effective investments.
Lambert additionally stated that this represented an “opportunity” to help promote the benefit of tax allowance optimisation through regular tax health checks.
“Despite high client concern about inflation and interest in tax efficiency, advisers believe a relatively low percentage of clients know about or use key strategies,” he added.
This was found to be a pressing issue with the study additionally reporting that advisers believe clients rate taxation is second only to inflation as the biggest threat to their invested capital and future financial wellbeing.
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