AIM Industry Report 2017/18

37 MARKET RESEARCH ADVISER SURVEY OPINIONS OF THOSE AT THE SHARP END Every year we gather the thoughts and opinions of advisers through our annual Adviser Survey. This year we had a record number of 190 responses which pointed us towards emerging trends and issues that have developed since the publication of our 2016 AIM Report. We are always keen to identify and understand considerations that are affecting those who are actively involved with giving advice and writing business. Advisers can use this information to review how their peers perceive the AIM market, including their outlook for AIM business, what AIM characteristics are of interest and the positives they take from AIM. In addition to reporting the overall response for each question we will also show readers how the level of engagement with the AIM market can affect an adviser’s perception of it. Our aim is to identify any misperceptions advisers might have about the AIM market based on the assumption that frequent users are more experienced and more knowledgeable in AIM investing. Therefore, for each question we will provide three sets of results: 1. All Responses – includes everyone who responded to the survey. 2. Frequently – only includes responses we had from those who quoted they recommend AIM investments frequently. 3. Sometimes – includes responses from those who said they recommend AIM investments some of the time. DO YOU RECOMMEND AIM TO YOUR CLIENTS? In total, 64% of advisers recommend AIM investments to their clients with 54% ‘sometimes’ users and 10% frequent users. Last year, 71% of advisers said they recommend AIM investments in some format and the proportions for ‘frequent’ and ‘sometimes’ users were 11% and 60% respectively. We believe that the decreases are largely due to the fact that this year’s sample is bigger and contains a higher proportion of advisers who are active in EIS and VCT investing but not AIM. About one third of all respondents never recommend AIM investing, 6% up from last year’s figure. WHAT ARE YOUR TOP THREE REASONS FOR RECOMMENDING AIM? This year, IHT planning became the most common reason for recommending AIM investments, substituting last year’s most common reason – growth. And it is consistent among all three groups. In particular, over nine in ten frequent users picked IHT planning as one of their top three reasons which demonstrates the use of AIM shares in IHT planning. It also reflects the increasing number of AIM-based offers in the BR market, something acknowledged by head of AIM, Marcus Stuttard after the 2017 Autumn Budget when the Government recognised the job done by BR, “we are pleased that the Chancellor has acknowledged the important role that BR plays in supporting family-owned businesses, and growth investment in AIM and other growth markets.” Since AIM-quoted companies are generally smaller in size and display a distinctive risk-return profile in comparison to mainstream asset classes, diversification and risk management was the second most common reason – picked by 55% of frequent and 54% of ′sometimes′ users respectively. The third top reason quoted is growth, and we can see that there are more ′sometimes′ users that recommend AIM investments for growth reasons than frequent users. Growth is clearly the most obvious reason to recommend AIM investments, but those advisers who do so more regularly clearly also value other facets of AIM. In particular, 18% of frequent users picked income as one of their three top reasons versus only 8% of ′sometimes′ users who perhaps don’t entirely recognise the potential dividend opportunities. SOMETIMES NEVER FREQUENTLY NO RESPONSE 54% 10% 32% 4% TOP THREE REASONS FOR RECOMMENDING AIM DIVERSIFICATION / RISK MANAGEMENT GROWTH INCOME TAX PLANNING (NON IHT) 100% 90% 40% 80% 30% 70% 20% 10% 50% 60% 0% IHT PLANNING POSITIVE SOCIAL / ECONOMIC IMPACT OTHER DON’T RECOMMEND EXPOSURE TO A SPECIFIC SECTOR ALL RESPONSES FREQUENTLY SOMETIMES