5
FSC is a non-profit international organisation established to promote the responsible
management of the world’s forests. Products carrying the FSC label are independently certified to
ensure consumers that they come from forests that are managed to meet the social, economic
and ecological needs of present and future generations, and other controlled sources.
63
55
58
59
60
MARKET RESEARCH
MARKET ANALYSIS
72
73
74
APPENDIX
6
Q
.
Do youexpect to seean increaseor
decrease inBPRbusiness in thenextfive
years?
Although someproviders feel that
advisers/investorsmaybehesitant
about recommendingBPRproducts,
allprovidersbelieve theywill increase
BPRbusinessover thenextfive years.
Estimates range from15%per year to
25%per year,over thenext5 years.
Manybelieve that the increased
awarenessand credibilityof the sector
willbeamajordriver inmarketgrowth.
This isdifferent from theadvisers,who
felt that thegrowth inbusinesswillbe
drivenby theirageing clientbanks.
Q
.
In youropinion,what single
changeor innovationwould
improve theBPRmarket?
Mostproviders felt thata change in the
regulationofBPRwouldgreatly improve
themarket.These suggestions ranged
fromobtainingpublished FCAopinion
on theseproducts, to thegovernment
being cleareron theirplans for thenil
rateband in the future.
A call for increasedknowledgeand
educationavailableon the sectorwas
notedby severalproviders.This isa
trend inall three surveys - there isa
definiteneed formoreeducation in
the sector.
CONCLUSIONS
Overall,what theproviders thinkand
what theadvisers think isnotamillion
milesapart.Providersareexpecting
todomorebusinessover thenext
five years,andwould like to see
more certaintyaround the rulesand
regulationsgoverningBPR toallow them
togearup formorebusiness confident
that itwillbe timeandeffortwell spent.
It’s clear thatadvisers think the industry
couldbemore transparent,and the
providers recognise this,butwhether
anyof themwould takeunilateral
steps to improve transparency is
anothermatter.And ina less than100%
transparentenvironment,providers
haveunderestimatedhowmuch value
advisersattach tofirms telling the story
of their investmentphilosophyand
strengthof their teams.
INVESTOR SURVEY
The last surveyweundertookwas
of investors.We surveyedapanel
of120HNW investorswithassets
over£500,000andalso collected38
responses fromother sources, including
someordinary retail investors.
Q
.
Howwould youdescribe your levelof
investmentexperience?
82%of the respondentsweremale
and15%were female,7%described
themselvesas sophisticated,69%as
reasonably sophisticatedand24%as
having little tono investmentexperience.
Onceagain, the surveywasdynamicand
thequestions changed toaccommodate
previous responses.
Q.
Useof taxefficient investments?
Outofourpanel,63%of themdidnot
makeuseof taxefficient investments,
14%had invested inVCT,12% inEIS,7%
inBPRand4% inSEIS.The lownumbers
for investment inSEISareprobably
because this isanew scheme investing in
the riskiestendof themarket. Itmakes
sense thatmoreestablishedEISand
VCT schemeshavemore investment.
Investment inBPRwas low,either
reflecting itsvery specific investment
objectiveora lackofawarenessamongst
thepanel.More surprising is thehigh
numberof investorswhodonotutilise
anyof these taxefficient investment
products -which caneitherbeviewed
asadisappointmentoranopportunity
by the taxefficient investment industry.
Thenext section focuseson those investors
whodo invest in taxefficient investments.
Another surprisewas theage range
ofBPR investorsonourpanel. 67%
of themwere40-50and the33%
were60-70.Wedon’tknow if thiswas
influencedby theonlinenatureof the
panel survey,or ifperhaps it reflects
thatyoungerbusinessownerswho
aremoreawareof the reliefsare
more likely touse theseproducts.
Allof theBPR investorshadmade
other taxefficient investments.We can
speculate that someexposure to the
industry’sotherproductsmakes the
transition to investing inBPReasier.
Inkeepingwithotheralternative
investments, fewpeoplewould sanction
aportfolioallocationofhigher than
10%and certainlynomore than
20%.Singlingout theBPR investors,
theywerea little moreaggressive,
againperhaps reflectingadeeper
understandingof the issues.
100
%
0
%
“Providers have underestimated the value advisers put on their investment philosophy”
69
%
24
%
7
%
Sophisticated
Reasonably
sophisticated
Littleorno
experience
SEIS
BPR
EIS
VCT
None
4
%
14
%
63
%
7
%
12
%
35%
30%
25%
20%
15%
10%
5%
0%
EIS
VCT
SEIS
Q
.
Useof taxefficient investments
(onlyBPR investors)
Q
.
Allocation to taxefficient
investments
OnlyBPR investors
All investors
<5%
5-10
>10%
Unsure
%
%
%
%
%
