Many DFMs have stopped charging VAT on their model portfolio services.

Our MD Heather Hopkins shared her view about this trend with Professional Adviser, highlighting the operational challenge for some platforms to make the change:

“There are operational issues that come into play and it’s not easy for platforms to remove the VAT. In our research we heard that one platform in particular has to manually replicate the DFM’s model portfolios and move people out of the existing MPS into the new one so as not to trigger a capital gains tax implication. This requires a lot of resource from the platform.”

Find out more about NextWealth’s Discretionary MPS report, published in December 2020.

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About the Author

Heather is a data and research expert specialising in retail investment distribution. Heather is the Managing Director and Founder of NextWealth. She is also a Director of Clive Waller Consulting Ltd and serves as Vice-Chair of The Investment Network and the Schroders UK Platform Awards.