The current environment remains deeply uncertain. Despite recent conciliatory remarks from U.S. Vice President JD Vance, it appears increasingly unlikely that the UK will avoid potential tariffs under a Trump administration, despite the government’s ongoing efforts to maintain strong relations with the U.S.
Investor confidence in uncertain times
As financial advisers are well aware, the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCTs) offer valuable, tax-efficient opportunities for high-net-worth individuals aiming to tap into the growth potential of early-stage businesses. However, these investment vehicles are still sensitive to broader shifts in global economic sentiment. Uncertainty on the international stage, especially concerning trade policy and geopolitical developments, can weigh on investor confidence and influence both risk appetite and capital flows into these schemes.
During times of economic strain, driven by factors such as rising tariffs or the threat of a global slowdown, investor confidence often takes a hit. This increased caution typically results in reduced demand for higher-risk investments, including EIS and VCTs. Advisers should anticipate a more conservative approach from clients, especially those with limited experience navigating volatile market conditions. For these investors, the current climate may feel particularly unsettling, prompting a greater focus on capital preservation over growth. As such, it’s crucial for advisers to offer reassurance, provide clear guidance, and help clients maintain a long-term perspective despite short-term uncertainties.
