71
Estate planning and tax efficiency are
financial planning activities that cut across
a number of professions – reflected in
the wide range of professional advisers
that our panel of tax efficient investors
consulted for help. We also asked what
sources of information they used for their
own research. 38% said they consulted
investment providers’ literature/website,
38% said their IFA’s literature/website, 24%
said their stockbroker’s literature/website
and a small minority said they use sources
such as friends and investment clubs.
“50% of investors feel that tax efficient investments provide a wider social or economic benefit”
Q
.
Other Alternatives (% of Panel)
All investors
BPR Investors only
CONCLUSIONS
The majority of our panel DID NOT invest in tax efficient investments,
and even of those that did, very few chose to invest in BPR products -
relief from other taxes seemed to be a bigger consideration.
With all tax efficient investments, the big concerns are around
investment risk, liquidity and being able to do the research and due
diligence needed to acquire a sufficient level of understanding.
However, it does appear that where an investor can build some trust up with
a provider and has faith in both the management team and their investment
philosophy, these become important factors in securing investment.
This was very similar to what we found in the adviser survey too.
Q
.
Reasons NOT to invest
We asked these respondents to rank
their top three reasons for not investing
in tax efficient investments (even
though they were aware of them) and
collated the scores. As with advisers
who were cautious on the sector,
risk and liquidity were big concerns
and research and transparency
seemed to play into that - perhaps
they feel that it is just too difficult to
acquire the knowledge needed to get
comfortable with these investments.
Our panel had made quite a lot of investments into
other alternative asset classes, reflecting their wealth
and experience. It was interesting to the see the
high allocation to alternative finance asset classes
like Peer to Peer Lending and Crowdfunding.
There were no significant differences when we looked
at this picture just focused on BPR investors.
Only one respondent ticked “none of the above”.
Minibonds
6
10
Unquoted
shares
16
19
Property
Schemes
13
10
UCIS
3
5
Social
impact
10
10
Structured
products
16
19
Crowdfunding
16
19
Peer to peer
lending
4
10
19
Q
.
Professional Advic
e
(only BPR investors)
Financial Adviser
34%
Accountant
34%
Tax Adviser
19%
Lawyer
14%
Stockbroker
9%
8
Other
8
Fear of loss of
tax efficient
status
46
Too much
research
required
4
Deal flow will
dry up for the
providers
26
Fear of
investing
in non-
mainstream
assets
20
Fear of
investing in
an esoteric
tax avoidance
scheme
54
Lack of
transparency /
Too hard to
understand / No
past performance
to assess
20
Too
expensive
62
Lack of
liquidity
116
Investment
Risk
