In a recent digital survey, IFA Magazine in conjunction with Charles Stanley, reached out to financial advisers to understand how their views and usage of AIM IHT planning solutions may have changed over the past couple of years. Most importantly, the survey also explored how they see these tax-efficient products fitting into their clients’ future financial plans.
With the UK facing economic shifts, inheritance tax (IHT) planning has become an exciting area of opportunity for financial advisers looking to help their clients safeguard wealth for future generations. As part of that planning, AIM (Alternative Investment Market) IHT solutions, have come into focus, offering a flexible and effective way to reduce IHT liabilities. We take a look at the survey results to get an idea of how advisers are embracing these solutions.
Top of the charts
One of the first things the survey uncovered was that a strong majority of financial advisers are already using AIM IHT solutions as part of their toolkit. In fact, 68% of respondents said they had recommended or used specialist IHT solutions, like AIM IHT products, EIS or VCTs in the last year. That shows there’s a clear appetite for these solutions when it comes to managing IHT liabilities and adding value for their clients.
While 32% haven’t yet adopted these solutions, that’s largely due to specific client needs or preferences. For example, some advisers are mindful of the risks that come with AIM-listed companies, but this also opens up opportunities for further exploration and education on how to mitigate those risks. For others, AIM IHT products simply haven’t been necessary yet, as their clients may not be facing significant IHT issues—though as their client base grows and ages, that is likely to change.
Interestingly, almost 16% of respondents told us that the reason they had not used IHT planning solutions with clients was because they “don’t know enough about the products on offer”. Clearly, there is a case here for advisers to consider more focused CPD activities to ensure they remain up-to-date with the latest opportunities.
Future focus
Looking forward, there’s a lot of optimism about the continued use of AIM IHT solutions. Over half of respondents (56%) [RM1] said they expect their usage of these products to increase or remain steady over the next year, signalling strong confidence in their long-term potential. On the flip side, only 11% foresee a decrease in usage, which highlights that most advisers are either maintaining or expanding their engagement with these solutions.
Yes, there’s some market volatility, but that’s par for the course with any investment. Advisers are finding ways to balance these risks with the potential for strong returns, knowing that AIM IHT products can offer real benefits when used thoughtfully.
There may be more hesitancy towards the future than normal, as we all wait to see what the new Labour government will do in terms of tax policy in the forthcoming Autumn Statement due on 30th October. With possible changes on the horizon, especially in relation to IHT, some advisers may be adopting a “wait and see” approach hoping for more clarity from the government before they make any firm recommendations regarding investment planning solutions in general.
Pondering providers
When it comes to selecting a business relief provider, advisers are focused on a few key criteria. The most important factor, according to 38% of respondents, is investment performance. After all, clients want to see returns on their investments, and that’s the top priority for many advisers when choosing an AIM IHT product, is that the provider has demonstrated the capability to deliver returns for investors.
Following closely behind are costs and charges, with 30% of advisers ranking this as a key consideration. Advisers are clearly looking for solutions that provide an effective balance of performance and affordability, making sure they get the best value for their clients.
Another 20% of respondents said that the range of products available is an important factor. While performance and costs are vital, having a wide selection of options allows advisers to tailor their recommendations to the specific needs of their clients. Interestingly, factors like additional education support and access via preferred platforms didn’t rank as highly. This suggests that while these features might be nice to have, they’re not deal-breakers for most advisers.
What’s politics got to do with it?
One of the most notable findings is how advisers are keeping an eye on potential political changes. With the Labour government in place, there’s some curiosity about whether business relief rules might shift. However, the survey shows that most advisers are feeling positive: 55% think it’s unlikely there will be major changes, and only 11% expect significant shifts anytime soon.
This cautious optimism reflects confidence in AIM IHT solutions as a reliable part of wealth management strategies, regardless of what happens in the political sphere.
A balancing act for advisers
Overall, the survey shows that financial advisers are navigating a dynamic but exciting space when it comes to AIM IHT solutions. There’s clear enthusiasm for these products, which can help clients tackle future IHT liabilities while potentially growing their wealth. Advisers are balancing the potential risks with the rewards, and there is genuine optimism that these solutions will continue to play a key role as future financial planning solutions.
With the political and economic landscape constantly evolving, it’s encouraging to see that advisers are prepared to adapt and see the obvious attractions in tax-efficient planning solutions which can readily support their clients’ needs.
Survey details
This survey, which ran from 13th to 20th August, generated 100 full responses—a solid sample size that offers valuable insights into how financial advisers are thinking about AIM IHT solutions.
If you have any questions about how an allocation to AIM IHT investments can complement and add value to your client’s total portfolio contact the Charles Stanley team:
www.charles-stanley.co.uk/financial-advisers/discretionary/aim-iht-portfolio
020 3930 4457
Investment involves risk.
