The Institute of Financial Planning (IFP) has warned the government that the threat of retrospective regulation is preventing advisers from recommending enterprise investment schemes (EIS) to clients.
In a meeting at Downing Street with government adviser Lord Young yesterday, CEO Nick Cann (pictured) said the government and regulators would have to work closely with IFAs to encourage investment into small businesses.
The scheme is designed to encourage private investment by offering tax breaks of up to 50%.
"[EIS] are in their infancy, quite high risk but still heavily subsidised, so we were discussing what the barriers are of advisers being able to sell those to their clients," Cann said.
"The issues they are facing given the FSAs paper on UCIS is there is clearly a high focus on unregulated products, so [IFAs have to consider] due diligence and particularly suitability of risk as well as most importantly, the risk of regulation in hindsight."
Cann said Lord Young was "very enthusiastic" about hearing the issues affecting IFAs - "which would be the same as any non-regulated product at the moment".
The government sees advisers as key to ensuring the success of the scheme, formally introduced in this year's Budget by George Osborne.
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