A survey of financial advisers on Enterprise Investment Schemes has found that the level of use has been consistent despite concern that rule changes brought in by the government as part of its Patient Capital Review would stifle the market. In the survey conducted by Great Point Investments, 56% of the advisers questioned said the number of clients using EIS has stayed the same in the last 12 months. 67% of advisers also said they expect to see the same level in the use of EIS by clients in the next 12 months. 10% said they expect to see an increase and 23% said they expect a fall.
Asked about the impact of the PCR and introduction of new rules, advisers said they have been more inclined to look for proven track record with established EIS funds (49%). This was followed by an increased focus on diversification at both manager level (31%) and asset class level (31%). Advisers also said that PCR had made them less inclined to recommend single company investments (22%) yet more inclined to recommend EIS funds (14%).
Commenting on the results, Great Point Investments MD Dan Perkins said: “This survey clearly shows that EIS continues to be an important part of the wealth planning mix for advisers and their clients. The rule changes have changed the risk profile of EIS and this has brought a sharper focus on investing in genuine growth businesses.
“For clients that want to supplement their pensions, are comfortable with the high levels of risk associated and are looking for a genuine wealth creation tool, EIS offers a great platform for investors and also provides a much-needed alternative source of funding for Britain’s small businesses.”
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