70
When we looked at the criteria investors use when choosing
a tax efficient investment provider, the results were similar to
the advisers – investment philosophy and the quality of the
team scored highly, but costs and past performance are never
far behind. Providers need to focus on pushing these aspects
in their investor education.
Focusing in on BPR investors again, we see a shift as costs are
considered less important and having previous experience
with a provider is relatively more important. This suggests that
there could be a lot of mileage for providers selling into their
existing client base.
Q
.
Investment horizon
There was a broad range of investment
horizons for investors in tax efficient
investment products, with the majority
looking at a 5-10 year timeframe, which
is logical. There were a worrying number
of investors who were unsure though!
“Most BPR investors prefer to invest in AIM listed companies (83%), but a minority prefer a mix of
both AIM and unlisted companies (17%)”
Q
.
What are your
top 3 reasons
for investing in tax efficient investments?
(only BPR investors)
We asked investors to rank their top three reasons for investing in tax efficient
investment products and collated the scores. IHT mitigation was not a high priority,
perhaps reflected in the lower numbers investing in these products. Even amongst
the BPR investors, it did not score as highly as the other reliefs on offer (all of the BPR
investors had investments in other tax efficient investments).
40%
30%
20%
10%
0%
1-3 3-5 5-10 >10 Unsure
Q
.
Provider Criterion
All investors
BPR investors only
Thinking about BPR and its use as
an estate planning tool, we asked
what other estate planning solutions
these investors had in place.
As the easiest estate planning solution
to implement, small gifts were the
most popular, and it was nice to see
charitable donations are also popular.
Of course, trusts of various kinds
are still utilised by lots of investors.
Interestingly, all of these investors
had done something - they did have
a “none of the above” option.
Q.
Other Estate Planning Solutions
0 10 20 30 40 50 60
IHT mitigation
Following advice
Contributions to pensions and ISAs are already maxed out
Capital Gains Tax relief / deferral
Income Tax relief
Diversification
Income
8
Having
used them
previously
10
24
The investment
philosophy
4
46
Quality of the
management
team
20
26
Past
performance
14
16
AUM
8
32
Costs
6
12
Supporting
literature
2
4
Interaction
at events /
seminars
2
8
Following
advice
Small
Gifts
Life
Assurance
Gifts
from
income
Charitable
Donations
Discounted
Gift Trusts
Loan
Trusts
29
%
14
%
14
%
24
%
5
%
14
%
