Advisers have hit out at Acuity Capital after it promised to rebate charges to clients who subscribe directly for a “top-up” on one of its venture capital trusts rather than go through their IFA.
In a letter to shareholders on March 5, Acuity offers to rebate 3 per cent of a 5.5 per cent initial charge to Acuity growth VCT shareholders who apply for additional new shares directly and not through their IFA “in order to lower the costs for existing investors”.
Yet, in a risk warning later in the letter, Acuity strongly recommends “private investors to seek advice from a professional adviser when considering investment in a VCT”. Advisers have attacked the move, claiming the majority of Acuity’s business comes through the IFA channel.
Hargreaves Lansdown investment manager Ben Yearsley says: “They should have thought twice before doing this. The majority of their money comes in via IFAs so it is a kick in the teeth to advisers to go behind their backs.”
’Acuity has to consider who its friends are. I think going direct to clients is a most dangerous move’
Tax Efficient Review editor Martin Churchill says: “Acuity has to consider who its friends are. I think going direct to clients is a most dangerous move and I would be surprised if many providers follow suit.”
Managing partner Nick Ross says: “This is not designed to disenfranchise the IFA network, there is a clear recommendation in the letter that shareholders should seek professional advice and we would expect people to do that. But we have a lot of highnet-worth investors who do not feel it is right that they should have to pay additional commission on a top-up when they are already in the fund.”
In January, advisers slammed Acuity plans to double director remuneration after the merger of two VCTs which rebranded as Acuity growth VCT.