68
Q
.
Do you provide...?
Over half of the providers only offer
non-AIM BPR products and 25% only
structure AIM portfolios. A smaller
portion (19%) offer both AIM and non-
AIM BPR products.
Q
.
Do you consider diversification across
BPR product providers and underlying
assets important for investors?
The providers recognise that
diversification across underlying assets
and providers is important for advisers,
but unsurprisingly a number felt that
the focus should be on diversifying
across assets - not the providers! This is
consistent with their claims to operate
sufficiently diverse or low risk products.
Q
.
Do rumours that the IHT threshold
may rise make investors/advisers
hesitate to recommend BPR products?
Q
.
What do you believe the
top 3 reasons
for investing in BPR products are?
The providers believe that speed, access and simplicity are the key selling points for
their products - and once again they are in agreement with the advisers, who had the
same top three reasons to invest.
“Perhaps, for want of knowledge, advisers overstate some of these risks”
69
%
31
%
Q
.
What do you think investors/advisers top 5 criteria are when choosing a BPR
product provider?
The providers thought that past performance and costs were the leading investment
criteria and they did not attribute the same significance to the house investment
philosophy and quality of the management team as advisers did. In an investment
universe that advisers feel is not as transparent as main-market funds, it seems that
advisers are putting more emphasis on intangible, qualitative data.
Underlying
Assets
31
%
Both
56
%
Product
Providers
13
%
Neither
0
%
Non AIM
BPR Products
56
%
AIM Portfolio
BPR Products
25
%
Both
19
%
Speed of IHT mitigation compared to other solutions
Client retains access to funds
Simple legal structure compared to other IHT solutions
Potential for growth as well as IHT mitigation
Corporate clients require a BPR solution to pass on value of their business
Contributions to pensions and ISAs are already maxed out
2
1
5
9
15
16
Q
.
What do you think investors/advisers
top 5 concerns
are when investing in a BPR
product?
Providers believe that a lack of transparency is the biggest concern for advisers
investing their clients in BPR, closely followed by investment risks and lack of liquidity.
This is the same top three concerns as advisers, but the investment risk and lack of
liquidity were bigger concerns for them.
We can speculate that there is some interplay between increased transparency and
the advisers’ understanding and perception of the investment and liquidity risks - and
that perhaps, for want of knowledge, advisers overstate these risks.
14
13
12
Lack of transparency
/ Hard to understand
/ No past performance
to assets
Investment
risk
Lack of liquidity /
Concern that deal
flow will dry up for
the providers
Fear of investing in
non-mainstream
assets
Too much risk
to my business
(regulatory risk)
8
8
8
6
5
Too much due diligence
and compliance work
required
Too
expensive
Fear of investing
in an esoteric tax
avoidance scheme
Too hard to
explain to clients
Other
3
1
Past performance
The investment philosophy
Cost
The management team
Quality and transparency of the supporting literature
Size
Having used them previously
As measured by AUM
Interaction at events/seminars
Other
14
13
13
10
9
8
5
3
1
0
