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“There was a feeling from the advisers we surveyed that most clients’ needs are satisfied by using
ISA and Pension allowances, or that EIS are more useful for tax relief purposes than VCTs”
WHICH VCT PRODUCT PROVIDERS DO YOU TYPICALLY USE?
Note that the sponsoring managers sent out this survey to advisers they already work with, so that introduces an element of bias.
However, respondents were able to select more than one provider. It does give somewhat of an indication of who advisers are
doing business with. And as previous good experience with a fund manager is an important consideration for the respondents, it
indicates who they are likely to be doing repeat business with.
The main two reasons cited by advisers for not recommending VCT investments to their clients are that VCT investments are not
suitable for their clients (77%) and the investment risk (59%).
There was a feeling from the advisers we surveyed that most clients’ needs are satisfied by using ISA and Pension allowances, or that EIS
are more useful for tax relief purposes than VCTs. Although, this opinion seems to contradict what is said by financial advisers that do
recommend VCTs – 73% consider that you do not need to complete your ISA and Pension before investing in VCTs. Other reasons given by
advisers are that VCTs investments have too much regulatory risk (41%) and that it is difficult to explain VCTs to their clients (24%).
WHICH ARE YOUR TOP 3 REASONS WHY YOU DO NOT RECOMMEND VCT INVESTMENTS TO YOUR CLIENTS?
OCTOPUS
ARTEMIS
NVM
CHRYSALIS
MOBEUS
OTHER
AMATI
LIVINGBRIDGE
UNICORN
CALCULUS
OXFORD
HAZEL
PUMA
ELDERSTREET
HARGREAVEHALE
MD
DOWNING
CORE
TRIPLE POINT
HYGEA
ALBION
INVESTEC
MAVEN
OAKLEY
FORESIGHT
EDGE
BERINGEA
IBIS
INGENIOUS
IONA
YFM
0%
10%
20%
30%
40%
50%
60%
70%
VCT investments are not suitable for my clients
Investment risk
Too much regulatory risk
Too difficult to explain to client
Exit strategy is unclear
VCT investments are too illiquid
Too much due diligence required
Fear of investing in non-mainstream assets
Other
10%
0%
20% 30% 40% 50% 60% 70% 80%
35%
35%
29%
6%
6%
6%
12%
12% 6%
6%
6%
6%
12%
12%
6%
12%
12%
18%
6%
24%
18%
Top reason
2nd top reason
3rd top reason
59
54 51
38
28 28
21 18 18 18
15
10 8 8 8 8
5 5 5 5 5 3 3 3