Platform support provider GBST has added bonds capability to its Composer technology to provide “greater flexibility” to advisers, clients and investors.
The company, whose technology sites behind platforms run by the likes of AJ Bell and Novia., said it has chosen to add the function as demand for bonds grows in inheritance tax and pension planning.
Citing the latest HM Revenue and Customs figures, GBST said 24,500 estates breached the inheritance tax threshold in 2015/16, up 50 per cent in five years, while 2,120 reached the pensions lifetime allowance in 2016/17, up 380 per cent in five years.
With the bond addition Composer will provide the administration for onshore bonds, offshore bonds, capital redemption bonds and non-qualifying regular savings plans. This will be alongside GBST’s existing range of tax-wrappers which include general investment accounts, Isas, Lifetime Isas, Junior Isas, Sipps and annuities.
GBST head of EMEA David Simpson says: “We’ve seen renewed interest in bonds following pension freedoms, with sales increasing over 20 per cent since 2014 according to FCA figures.
“Rising numbers reaching the inheritance tax and lifetime pension allowance thresholds and the possible introduction of investment pathways should encourage continued demand for bonds as advisers seek to diversify client portfolios whilst benefiting from the income producing, capital preservation and tax efficient qualities of bonds. With this new capability, we can provide full administrative support for bonds, reducing the need for separate systems while offering advisers and investors a wider range of long-term financial planning options.
“The new bond facility will also enable life companies to move back books onto Composer, enjoying a high level of automation and advanced investment and portfolio capabilities and providing online access for policyholders to view portfolios and valuations.”
Simpson added the move is “further evidence” of GBST’s long-term commitment to continual investment in its systems to support the evolving needs of clients.
GBST said Composer has always had the ability to hold bonds, but currently third-party product providers perform the underlying policy administration.
The bond capability will be rolled out throughout 2020.
It will also accommodate:
- Adviser model portfolios
- Full and part assignments
- Different trust types, including bare and discretionary gift, gift and loan, and discounted gift trusts
- Multiple maturity dates and deferment
- A large range of ad hoc withdrawal methods and a calculation tool for back office users to assist advisers and policyholders
- Chargeable events calculations including automated HMRC reporting
- Automated Foreign Account Tax Compliance Act and Automatic Exchange of Information reporting
- Commission, adviser charges and fund adviser fees
- GDPR requirements including Data Subject Access Requests