Advisers and wealth managers positive on outlook for UK SMEs and listed companies, says new research

A new study among advisers and wealth managers conducted by TIME Investments, a specialist in estate planning services, reveals that almost all advisers (96 per cent) believe UK SMEs and AIM listed companies will play an important role in the UK’s economic recovery following the Covid-19 pandemic. 

Nearly half of advisers (44 per cent) said they would play a ‘very important’ role.

AIM is the junior market on the London Stock Exchange and is often perceived to be more volatile than the main market. In fact, the AIM index outperformed the FTSE 100 in 2020, which proved to be a turbulent year for all indices. The FTSE AIM All-share Index returned 21.7 per cent compared to the FTSE 100 which lost 11.4 per cent (source: Bloomberg). This outperformance has led many advisers to reconsider their preconceptions about AIM, with the majority of advisers (80 per cent) expecting to increase their clients’ exposure to AIM this year, with 10 per cent predicting a significant increase. Only 2 per cent of advisers expect their clients’ exposure to decrease.

When asked why AIM-listed companies offer good growth potential over the next 24 months, tax efficiency was the most popular answer. AIM shares can be held in ISAs and investors can enjoy tax free growth, 66 per cent of advisers think this is the biggest driver to investing in AIM.

The effect of Covid-19 and the Government response, with an unprecedented support package, has helped to protect many SMEs and 64 per cent advisers think that fiscal and monetary policy has bolstered market sentiment. Over half (52 per cent) of advisers think the Government’s continued support of the AIM market will help to boost future growth.

Chris Cox, CFA, Investment Manager, says: “UK SMEs are often considered the engine room of economic growth and this is reflected in our research findings. AIM listed companies offer the opportunity to capitalise on this growth and if shares are held within an ISA this growth is tax free.”