The Kuber Recommendation Service (“KRS”) aims to be the tax efficient market’s “best principles advice” service for financial advisers and wealth managers (“Advisers”), and their clients by extension. It looks at best principles for each element of the tax efficient investment process from due diligence, product selection, suitability letters, application, co-ordinating certificates through to ongoing monitoring, reporting and finally exit and re-investment as required.

Origin Story
The KRS Offers
KRS Investment Committee

The KRS is exclusively available to Advisers:

While advice must still be given by the Adviser to their client, the KRS looks to mitigate a degree of the Advisory Firm’s risk making recommendations in this space. The KRS supports the Adviser’s advice with comprehensive due diligence, Manager and product selection, product reports, content for suitability letters, suitability checks, well diversified, whole of market recommendations, and ongoing monitoring – all with comprehensive and meaningful MiFID II reporting.

Origin Story

The idea for KRS came about as a result of an attempt to build a “best principles advice” solution for the tax efficient market. The high-risk nature of tax efficient investments such as VCT, EIS, SEIS and Business Relief qualifying investments mean that advice on these investments is very rarely core advice to Advisers. There are not many Advisers who can afford to spend their entire working day on investment from this space, and yet the space is high risk and complicated; it requires an altogether different approach to traditional listed investments.

Kuber and the KRS Investment Committee have collectively spent decades working with advisers, giving advice and reviewing products in this space. We are tax efficient specialists and we have seen a lot of good and bad advice. We have concluded that best principles advice requires:

• Long standing and wide-ranging knowledge of the market and the players in it;
• Experience of the market from the Advisers’ side and the Managers’ side through multiple investment cycles;
• Significant investment of time into, plus focus on due diligence and monitoring;
• Managing client expectations around risk, returns and timings;
• Robust selection processes;
• Regular contact with the Managers,
• Recognition that Manager risk is the greatest risk in unquoted investments;
• Diversification that matches the risk of the investments and that is not compromised by the significant additional admin requirements for Advisers of recommending multiple products;
• Comprehensive reporting for keeping the client informed; and
• Evidencing all of the above through well-crafted suitability letters.

KRS focuses on these principles and is designed around them to offer the Advisers access to our team, experience, market knowledge, support function and processes.

The KRS Offers

Best Principles Advice Solution to assist with advice on VCT/EIS/BR for Clients from the Whole of Market:

• Expert investment committee for product selection;
• Well diversified portfolio of products and Managers recommended;
• No compromise on available products;
• Highly experienced suitability checks and suitability letter aides; and
• Ongoing monitoring carried out quarterly by full time industry experts.

Advice Fee chargeable to Advisory Firm, Platform Fees chargeable to the Investor and Facilitation Offered:

• Advisory Firm Onboarding includes access to Independent Reviews as well as half day onboarding meetings which covers the methodology behind selection, suitability considerations, best practice compliance files, PI provider briefing and client identification recap;
• VAT efficient for the Investor; and
• Allows for the Adviser to continue to charge their facilitation fee and improve their margins on this business for less risk and time spent as well as offering their clients comprehensive and knowledgeable service in this non-core space of a standard comparable to other areas of your advice.
• These investments are often only suitable to Advisers’ largest clients. Do not compromise on the level of service you offer.

Cost Controlled (both time and money) by Application and Reporting Efficiencies as well as Product Selection Risk being outsourced and incorporating a Suitability check:

• Considerable time and admin efficiencies on application, AML and facilitation processes;
• Single cheque or transfer needed;
• Reporting (MIFID II Compliant) available through My Kuber Portal – quarterly and with meaningful observations and opinion;
• Client Review Packs available – quarterly and providing summaries and underlying detail needed for any given client meeting;
• Adviser suitability checked by full time industry experts;
• Product Selection advised on by committee of full-time tax efficient experts;
• High level of Product and Manager diversification; and
• Ongoing monitoring carried out by full time tax efficient experts.

 

Kuber Recommendation Service – Executive Summary

KRS Investment Committee

Industry leading Investment Committee:

Luke Barnett, Lead Analyst of Tax-Advantage Investment research team, MJ Hudson Allenbridge

Allenbridge is the longest standing Reviewer in the tax efficient market. Not only do they have the longest experience in the tax efficient market, but they also have their own wider sector specialisation through the rest of MJ Hudson and Allenbridge’snon tax efficient specialists. They are also large enough to not have significant concentration nor key person risk.

Mark Brownridge, Director General, EISA (EIS Association)

Mark is a tax efficient industry specialist through and through. Before being the Director General of the tax efficient industry body he was responsible to tax efficient investments at Mazars. Mark has an unparalleled network within the tax efficient market and the KRS IC looks to take full advantage of it. While Investee Companyand Sector analysis is a crucial part of the due diligence, anecdotal evidence and understanding is also essential in the unquoted space. As head of the industry body that represents so many of the Managers in the industry he has access to information on the Managers that is extremely hard to come by. With this level of access comes conflicts, however these can be effectively managed (for example a member must abstain from voting on a Manager they have association with), and that an individual only has one of the five votes limits any one’s influence.

Ewoud Karelse, Head of Tax Efficient Investment, Tilney Smith & Williamson

As Head of Tax Advantaged Investments at Tilney Smith & Williamson, Ewoud is responsible for research and selection of EIS, VCT, and Business Relief qualifying investments. His tax efficient analysis career started in 2000, spending eight years at Allenbridge. Ewoud is singularly well respected by both Advisers and Managers as one of the industry’s leading experts. Kuber is privileged to have such an experienced and well-regarded specialist from one of the pre-eminent firms in this space. It is a testimony to the quality of the KRS IC’s other independent members that such a firm could see the benefits to their own research by allowing him to join the KRS IC and have it benefit from his trade-mark, rigorous and insightful analysis he has compiled over the last decade.

Brian Moretta, Head of Tax-Enhanced Research, Hardman & Co

Hardman & Co are a more recent entrant into the tax efficient market, but they bring an extremely rigorous Investee Company up methodology which compliments the rest of the KRS IC very well. Their valuation specialisation is particularly appealing as a skill set the KRS IC can benefit from. They are also a company with revenues and expertise beyond the tax efficient industry. One of the major issues with a tax efficient reviewer that only operates in the tax efficientindustry is that they are bound by self-interest to be as positive about the industry as possible; they invariably make most of their revenues from the Managers and the distribution rights/ fees for conducting Reviews – which fundamentally conflicts them and their research. Both Hardman and Allenbridge have reputations and revenues outside of the tax efficient industry which makes them more accountable and has led to them having much more robust and process driven due diligence.

James Ramsay, Managing Director, Kuber/ TEPS (Tax Efficient Procurement Services)

TEPS was founded in 2016 to report on products across the whole of the tax efficient market. This reporting has given an insight into the majority of Managers in the market, with a level of attention seldom seen elsewhere in the industry. Many advisers and reviewers focus a lot on new product launches and analysing offerings for selection. This always includes past performance, but it is usually presented to them in a format chosen and controlled by the Manager. TEPS gets a granular level of detail and reviews each update/valuation sent to advisers/investors. TEPS monitoring will also form the basis for collecting information on the Products recommended by the KRS. James Ramsay is also the MD of Kuber.