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“While it’s impossible for fund managers or financial advisers to increase the tax reliefs, making
investment materials clearer would help clients invest in these products with more confidence”
Quality of the manager, costs and past performance are important to the investors when making a tax-efficient investment decision.
As we saw, many of these investors (44%) are without a financial adviser, so they will have to be doing all the heavy lifting in the due
diligence process, or using other sources of advice such as accountants.
Investment risk, lack of liquidity and lack of transparency were among the top three concerns for the investors when choosing a provider.
WHAT ARE YOUR TOP 3 CRITERIA WHEN CHOOSING A TAX-EFFICIENT INVESTMENT PRODUCT
PROVIDER?
10%
30%
50%
70%
Quality of the
management team
Costs
Past
performance
Size (as
measured
by AUM)
Investment
philosophy
Having
used them
previously
Quality and
transparency of
the supporting
literature
Interaction
at events /
seminars
Other
Following
advice
60%
40%
20%
0%
Top criteria
2nd top criteria
3rd top criteria
10%
Answers here were qualitative and ranged from no change or innovation needed, to greater transparency and clearer information,
and more tax relief! While it’s impossible for fund managers or financial advisers to increase the tax reliefs, making investment
materials clearer would help clients invest in these products with more confidence.
This next part of the investor survey takes a look at those that do not currently invest in any tax-efficient schemes but are aware of VCTs.
We surveyed them to find out what is making them hesitate and what could be done to improve the tax-efficient investment market.
IN YOUR OPINION, WHAT SINGLE CHANGE OR INNOVATION WOULD HELP TO ENCOURAGE INVESTMENT
IN TAX-EFFICIENT INVESTMENTS SUCH AS EIS, SEIS, VCTS AND BPR?
50%
30%
20%
10%
10%
10%
30%
10%
20%
10%
30%
10%
10%
30%
20%
WHAT ARE YOUR TOP 3 CONCERNS WHEN CHOOSING A TAX-EFFICIENT INVESTMENT PRODUCT?
Top concern
2nd top concern
3rd top concern
Investment risk
Lack of transparency / Too hard to understand
Fear of investing in a tax avoidance scheme
Fear of investing in non-mainstream assets
Fear of loss of tax-efficient status
Lack of liquidity
Too expensive
Concern that deal flow will dry up for the providers
60%
10%
10%
10%
10%
10%
11%
10%
0%
20% 30% 40% 50% 60% 70% 80% 90%
11%
56%
10%
22%
10%
40%
20%