Recent research highlights the increasing influence of Capital Gains Tax (CGT) functionality on platform choices among financial advisers.
- A majority of advisers report that CGT support is now a deciding factor in selecting providers.
- Advisers face additional pressure with the imminent Budget and potential CGT changes.
- Statistical data indicates a substantial increase in individuals subject to CGT since 2019.
- Advanced CGT planning tools are now essential for effective client advisery services.
Recent research by Financial Software Ltd underscores the growing importance of Capital Gains Tax (CGT) functionality in the decision-making process of financial advisers regarding platform selection. This trend is driven by the need for comprehensive support in managing clients’ tax obligations, with 76% of advisers citing CGT support as a critical factor in their choice of provider.
As the financial industry awaits the upcoming Budget, speculation around possible changes to the CGT regime adds to advisers’ concerns. Michael Edwards, managing director at Financial Software Ltd, articulates the pressure faced by advisers to ensure asset protection amidst these uncertainties, stressing the need for precise and timely client insights.
The urgency of this need is reflected in government data, which reveals a 36% increase in the number of individuals falling within the CGT remit since the 2019/20 tax year. This significant rise from 272,000 to 369,000 taxpayers highlights the expanding impact of CGT.
Advisers are increasingly reliant on advanced CGT calculators and features to support their clients effectively. According to the research, 66% of advice firms view a CGT calculator as indispensable, while 63% highlight the necessity of functionality that tracks assets’ original costs.
Furthermore, the lang cat’s analysis indicates that two-thirds of firms prioritised CGT tools during due diligence processes. These tools ranked highly among the features sought after by advisers, underscoring their centrality in current financial advisery practices.
The emphasis on robust CGT planning and support tools is reshaping adviser platform preferences, driven by both regulatory pressures and client needs.
