72 / 92
72
“The same reasons that would make the current VCT investors hesitate are the same ones holding
these investors back – investment risk, lack of transparency and lack of liquidity are among the
top three reasons for not investing”
CONCLUSIONS
Investors are aware of the higher risk of tax-efficient investments, but are also aware that they require more time and research to
wrap their heads around them. Financial advisers are key to these investment decisions and should be able to provide investors
with a clear understanding of the product. This is also a call to action to the investment providers, to make their investment
materials more transparent and easier to understand.
IN YOUR OPINION, WHAT
SINGLE CHANGE OR
INNOVATION WOULD HELP TO
ENCOURAGE INVESTMENT IN
TAX-EFFICIENT INVESTMENTS
SUCH AS EIS, SEIS, VCTS AND
BPR?
Looking at these respondents answers
may give us a better indication of what
can bring more clients who need these
products into the market. Knowledge,
clarification and transparency again
were the most stated responses.
The same reasons that would make the current VCT investors hesitate are the same ones holding these investors back – investment
risk, lack of transparency and lack of liquidity are among the top three reasons for not investing. Too much research required was
another top reason. It is true that VCTs and other tax-efficient vehicles are going to be more complicated and in turn require more due
diligence. It is important that advisers are able to speak to their clients knowledgeably about them.
WHAT ARE YOUR TOP 3 REASONS FOR NOT INVESTING IN TAX-EFFICIENT INVESTMENT PRODUCTS?
Yes
No
Despite their hesitations, 54% of them
do expect to make a tax-efficient
investment in the future. This could be
due to the maturing market or their
growing need to utilise these tax reliefs.
DO YOU ANTICIPATE THAT
YOU WILL INVEST IN A TAX-
EFFICIENT INVESTMENT
PRODUCT IN THE FUTURE?
46%
54%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Top reason
2nd top reason
3rd top reason
Concern that deal flow will dry up for the providers
4%
Fear of loss of tax-efficient status
4% 7%
Other
4% 4%
Fear of investing in an esoteric tax avoidance scheme
7% 7%
Too expensive
4%4% 19%
Fear of investing in non-mainstream assets
7% 4% 7%
Lack of transparency / Too hard to understand
7%
25%
15%
Lack of liquidity
18%
21%
11%
Too much research required
7%
14%
26%
Investment risk
46%
25%
4%
AREYOUAWAREOF TAX-EFFICIENT
INVESTMENT PRODUCTS?
Of those that do not currently invest,
34% were aware of VCT products.
This was the most commonly known
investment product. The rest of the
analysis focuses on the 34% of those that
are aware of VCTs.
SEIS
NONE
VCT
BPR
EIS
6% 8%
23%
29%
34%