Advisers need help to cope with EIS demand

Advisers need help to cope with EIS demand

Advisers are ill-equipped to deal with investors’ increasing appetite for the enterprise investment scheme, according to CoInvestor.

The investment platform has called for more support for advisers in the wake of increasing demand for the tax-efficient schemes.

Charles Owen, who heads u the CoInvestor platform, said advisers lack the resources and expertise required to help their clients make the right decisions.

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The warning comes as advisers prepare to help their clients make the best use of tax allowances and reliefs in the run-up to the end of the 2015 to 2016 tax year in April.

Mr Owen said: “Advising clients on making unlisted investments is beyond the scope of many advisers’ regulatory permissions, and the industry is going to need significant support if it is going to be able to satisfy the rising demand from clients for the EIS and other similar opportunities.”

“Third-party research and expertise will have an important role to play in helping advisers and wealth managers work with their clients, but we will also need to assist advisers as they develop due diligence processes of their own.”

Adviser view

Jason Hollands, managing director of business development at Tilney Bestinvest, said: “I think there is some truth in this, as most advisers are small firms and these are niche schemes.

“The schemes rightly require extra thorough due diligence because of the high-risk nature of the underlying assets, the paramount importance of suitability from a regulatory perspective, and periodic changes to the criteria around what constitutes a qualifying investment.”