43
Q. For what reasons do you NOT
recommend EIS investments
to your clients?*
A. The main two reasons cited by 50%
of advisers for not recommending EIS
to their clients are that the investments
are not suitable for their clients and
that the exit strategy is too unclear.
There is a feeling from advisers that
too much control is handed over to
the investment manager and investors
do not have any influence over when
they can exit the investment, even
after the initial holding term.
Other reasons given by advisers are
that EIS investments are too high
risk for their clients and that there
is not enough information available
to fully understand the sector or the
underlying investments themselves.
Growth (67%) and exit (61%) focused strategies were the two most common fund
strategies recommended by advisers
Technology and Renewable energy are the two most popular sectors for advisers
58% of advisers felt that they will increase their use of EIS investments during the next
12 months
Although the majority of respondents advise on EIS, the lack of quality information
available was cited as a major issue by both those that advise on EIS as well as those who
don’t
Advisers felt that HNW investors and those with a larger appetite for risk are more
suited to EIS investments, but benefits such as 100% Inheritance Tax relief could also be
beneficial to ordinary retail investors
63% of advisers cited the fund manager’s reputation as one of the most important
criteria when selecting a fund
26% of advisers who recommend EIS funds stick to only one provider
On average advisers recommend EIS investments from between three and four
different providers
Access to more information and historical performance data was highlighted by a
number of respondents as being essential to help improve the EIS market
*This question was answered by the 20 respondents who do not recommend EIS investments.
Q. What single development
do you believe would most
improve the EIS market?
A. We asked all survey participants what
they believe could be done to improve the
EIS market. The responses were generally
very similar across four key areas:
Availability on traditional platforms
Greater transparency on charges
Historical performance data
More broker support/roadshows
There is clearly a need for advisers to
have more information made available
to them, particularly on historical fund
performance and charges, which will
allow for greater comparisons between
EIS funds and investment managers. The
traditional investment market has a wide
range of tools and resources available,
and many advisers are calling for the same
level of detail making it easier for them to
recommend and facilitate an investment.
KEY FINDINGS FROM SURVEY
“Fifty eight percent of advisers felt that they will increase their use of EIS
investments during the next 12 months
”
