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Q. Which factors are most likely
to make you hesitant about
recommending an EIS fund?
A. The most common reasons cited by
advisers as to why they may hesitate before
recommending an EIS fund is due to it
having a complex investment process, with
58% of respondents selecting this response.
Rules and regulations surrounding EIS
investments could be seen as complicated
involving a large amount of paperwork,
which could put advisers off recommending
a certain product. The poor quality of
information provided on the fund was
seen as the second most common reason
to hesitate recommending an investment
with 53% of advisers considering this to be
an issue. Providing regular reporting and
detailed information can really add value
to the manager’s investment proposition.
The knowledge, experience and track record
of the fund manager is seen as another
important consideration for advisers, with
42% citing the manager’s track record
and 37% a previously poor experience
with the fund manager as reasons to
hesitate recommending an EIS fund.
Q. What are your preferred sectors
for EIS fund investments?
A. Renewable Energy was highlighted by
58% of advisers as being their preferred
investment sector. This may be down to the
number of energy opportunities available
in the market place which provides choice
and competition, the government support
behind the sector (through renewable
obligation certificates) or that energy
investments are often asset backed and
offer steady returns over a relatively
long period of time. They can also appeal
to investors as they have a green halo
affect and can support local economies
and the local community. Other popular
investment sectors include Technology
with 47% and AIM listed funds. Niche
sectors such as Consumer Retail (16%)
and Bars and Restaurants (11%) are less
popular, which could be attributed to there
being a smaller number of investments
available, less competition in the market
or a perception that they are higher risk.
Q. Do you feel
that there is enough competition in the EIS market?
A. It is important to identify whether advisers feel they have enough choice
and whether there is enough competition in the market. Competition is
generally seen as healthy as it lowers costs and improves efficiency.
68% of advisers that recommend EIS funds said they are happy with the amount of
competition in the market. The remaining 32% said that there is not enough competition
in the market which leaves room for new entrants and new investment propositions.
This could also be seen as an opportunity for firms already operating in the
space to improve their investment offerings to attract new business.
SECTOR
PREFERENCE
(ADVISER):
16%
58%
11%
42%
37%
47%
