Enterprise Investment Schemes have become more popular among advisers than Venture Capital Trusts, according to a new adviser survey by Deepbridge Capital.
When asked whether they tend to use EIS funds or VCTs more often, 11% of advisers said they only use EIS compared to just 2% who said they used VCTs exclusively.
Nearly a third (31%) use both vehicles equally, with a further 26% stating that they use EIS ‘predominantly’ but do utilise VCTs when appropriate.
The investment manager said that speed of deployment was the leading factor when selecting an EIS, with 82% of advisers citing this driver.
Andrew Aldridge, partner at Deepbridge Capital, commented: “Given last year’s record fundraising by VCTs, you would be forgiven for thinking that they are the primary tax efficient investment planning tool used by financial advisers, but this survey suggests otherwise.
“It is reassuring to know that the Enterprise Investment Scheme continues to be a key tool for advisers when tax planning and seeking long-term growth opportunities. Given the current macroeconomic climate, EIS has never been more important for investors, advisers and, critically, the growth-focused early-stage companies for whom EIS funding is invaluable.”
Michael White, managing director of Capital Wealth Partners, added: “Both EIS and VCTs provide financial advisers with fantastic tax planning tools, whilst also encouraging investors to back early-stage unlisted stocks, which could provide significant long-term growth. Within a diversified and balanced portfolio, all financial advisers should be considering EIS investments for appropriate clients.”
