For today’s tax-efficient investors, staying ahead of regulatory changes and market shifts isn’t just prudent—it’s essential. With Business Relief (BR) rules undergoing recent changes, many are questioning whether traditional AIM portfolios still offer the same advantages, or if more comprehensive IHT services now present a smarter path forward.
The choice of investment provider has also come under the spotlight, with discerning investors asking what truly matters most—track record, flexibility, tax strategy alignment, or the ease of disinvestment when the time comes. Particularly when it comes to Enterprise Investment Schemes (EIS), liquidity concerns can complicate exits, prompting some to explore newer Venture Capital Trusts (VCTs) that claim to offer more dynamic and accessible solutions.
With this in mind, we wanted to find out industry professionals’ and experts’ opinions on a series of questions, the percentage of responses along with the questions can be seen below:
1. Are you recommending more IHT services over AIM portfolios now that the Business Relief (BR) rules have changed?
- Yes, significantly more – 60%
- Yes, slightly more – 30%
- No change in recommendation levels – 5%
- Still primarily recommending AIM portfolios – 5%
- Not applicable / I don’t recommend IHT services
There are a considerable amount of factors to consider when it comes to the BR changes and how these affect both IHT and AIM, whilst AIM portfolios are traditionally attractive for BR-based IHT relief after 2 years, there are some concerns which could have resulted in the particpants favouring more towards IHT services. Some concerns may be potential market volatility and correlation risk.
IHT services tend to have more scope for customisation and risk management than a standard AIM portfolio, and further benefits such as capital preservation strategies or even income generation, unlike AIM portfolios which are often growth-focused.
2. When choosing an investment provider, what is the most important factor?
- Performance track record – 10%
- Charges and cost transparency
- Client reporting and platform experience
- Investment philosophy and style – 80%
- Provider reputation and support – 10%
- ESG credentials
- Other (please specify)
Participants overwhelmingly favoured investment style and philosophy as the key factors when selecting a provider. The underlying philosophy shapes several critical aspects, from performance and communication to how a provider responds under pressure. The emphasis on investment philosophy may stem from its ability to offer a clearer understanding of behaviour within market cycles, helping investors avoid the pitfalls of chasing fleeting trends. Furthermore, a well-defined investment style enables more informed decisions around risk and return, ensuring alignment with clients’ long-term goals and aspirations. Ultimately, this approach can deliver a balanced mix of growth, capital preservation, and absolute returns.
3. How easy have you found it to disinvest clients from EIS investments?
- Very easy
- Manageable with some effort – 35%
- Difficult and time-consuming – 55%
- I haven’t had to disinvest clients from EIS yet – 10%
- Not applicable / I don’t use EIS for clients
55% of respondents stated that they found disinvesting from EIS investments difficult and time-consuming; this could likely be due to EIS investments typically being long-term by design. Exit from EIS investments also tends to be determined on a company’s performance, which can be beyond control. 35% stated that they found disinvesting manageable with some effort, it can be more common where EIS providers offer structured exits, like knowledge-intensive fund wind-ups or a scheduled liquidity plan.
4. Do you think newer and more modern VCT providers offer more flexibility and opportunity?
- Yes, much more – 80%
- Somewhat more – 20%
- About the same as traditional providers
- No, I prefer more established providers
- Not sure / No opinion
A significant 80% of participants believe that modern VCT providers offer greater flexibility and more exciting opportunities compared to traditional options. These modern VCTs are revolutionizing the investment landscape, offering a dynamic approach to investment selection that targets high-growth sectors such as technology, renewables, and artificial intelligence. By focusing on these fast-evolving industries, these providers present investors with the potential for superior growth prospects and a more diversified portfolio, making them an increasingly attractive option for those seeking to capitalize on emerging market trends.
Stay tuned to the GBI Magazine social media platforms for more industry-focused polls where you can share your insights and opinions on all of the sectors most relevant topics!
