Applications for investment trusts will be done entirely online in the future, according to Bedlam Asset Management.
The firm says rather than manually filling in forms and posting them off with cheques to registrars, the entire process will be done electronically.
Bedlam claims it is starting the revolution with the launch of its Cherry Picker investment trust.
Investors can not only download application forms for the trust from its website but will also be able to buy shares in it via internet banking.
Although the application form still has to be printed off and posted, Bedlam plans to make this part of the procedure electronic too and predicts it will be the future of applying for investment trusts.
Michael Comras, chief financial officer at Bedlam, says it is making British stock market history with its plans.
“We think in the future it could be like this, absolutely. Across the industry it has to go this way.
“At the moment, you’d have to get an application form sent to you, fill it out, attach your cheque, and send it off to the registrar.
“We think that’s very traditional and we want to move forward. The Cherry Picker investment trust will be launched online and we think this will be very convenient for investors.
“We want people to be able to go onto our website and download the forms. They will be able to send their money electronically rather than using a cheque book.”
Comras says the move has already created a bit of a stir in the industry.
“We don’t think this is at all controversial,” he says. “But we have already had people say to us: ‘You can’t do that’.
“I’m pretty sure you can buy an ISA using your debit card. What’s the difference?”
Comras says in an ideal world investors would be able to fill in and submit an application form online but, due to third party involvement, this will not be done in time for its June launch.
“We would like the whole thing to be completely paperless,” he says. “But we’re dealing with large institutions who act as receiver banks and registrars and it takes them a bit of time to get their heads around things.”
The unconstrained, closed-ended investment trust will be capped at £100m.
Ian McCallum, CIO and director at Bedlam, says there are benefits to investing in investment trusts.
“Structurally we believe they have some useful differences for, unlike unit trusts and OEICs, they can focus on a smaller number of investments and being closed-ended, can take a longer term view,” he says.
“So in theory, they should be able to ride out stock market and economic cycles more effectively.”
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