68 / 92
68
“While only some managers were prepared to open a SITR product, a majority of providers were
interested in developing a Social VCT if it was to be approved”
CONCLUSIONS
Their responses show that providers appear to be aware of the concerns of investors and advisers, which is of course
encouraging for the market. Many of our respondents stated they expect to increase their VCT business over the next 12 months;
interestingly many of them stated that they believed this would be down to an expected decrease in competition due to the new
regulations and not just down to new net investment as a result of lower pension allowances. It will be interesting to see how this
develops and if it does turn out to be the case.
Listed on stock exchange and being open to higher levels of scrutiny were the top reasons why providers felt VCTs should be considered
over other tax-efficient investments. Other responses included increased transparency, greater diversity and tax-free dividends.
WHICH TOP 3 REASONS DO YOU FEEL ADVISERS/INVESTORS SHOULD CONSIDER A VCT OVER OTHER
TAX-EFFICIENT INVESTMENTS, SUCH AS EIS OR SEIS?
Top reason
2nd top reason
3rd top reason
Access to larger secondary market
Larger investment universe
Investment time frame
Lower level of risk
Early bird / Discount offers
Listed on stock exchange /
Open to higher levels of scrutiny
Lower entry levels
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Other
14%
14% 14%
29%
43%
14%
14%
14%
43%
43%
43%
14%
DO YOU FEEL THAT THERE
ARE ENOUGH RESOURCES AND
INFO AVAILABLE TO ENABLE
ADVISERS TO ACHIEVE WHOLE
MARKET KNOWLEDGE OF THE
VCT SECTOR?
Providers seems to be more optimistic
about the information available in the
market, as compared to advisers.
Yes
No
57%
43%
DO YOU EXPECT TO SEE AN
INCREASE OR DECREASE IN VCT
BUSINESS IN THE NEXT 12MONTHS?
The majority of providers expect to
do more business over the next 12
months, and this was a much higher
percentage than advisers expecting to
do more VCT business. We don’t know
how much more business advisers
expected to write though.
The respondents were able to provide a
reason to their response here and most
providers stated that the legislation
changes will reduce their competition
but demand will increase due to
pension reforms.
Increase
Decrease
Stay the same
86%
14%
WOULD YOU BE KEEN
TO DEVELOP A SOCIAL
INVESTMENT VCT PRODUCT IF
IT WAS APPROVED?”
We asked this in our survey of EIS
providers before our round-table event
with Big Society Capital in November
2015. While only some managers were
prepared to open a SITR product, a
majority of providers were interested
in developing a Social VCT if it was to be
approved.
*This result was based upon our survey
of 20 EIS managers for Big Society
Capital, some of whom also operated in
the VCT market.
Yes
No
It depends
14%
28%
58%