Wealth Club's research on the market to date has estimated Aim Isas provide investors with access to more than 800 investment opportunities, with a total market cap of £105bn.
He said: “The change in Isa rules nine years ago was a real turning point for investors.
"Until then if you had built up a large Isa pot – while tax efficient in so many other ways – it was a sitting duck in terms of inheritance tax.
"There was no way around that: if you wanted to avoid IHT, you had to move your money out of the Isa."
However, he added: "Too few people know about the benefits of Aim Isas."
Need for caution
But concerns still remain around risk - and therefore suitability for clients - and regulation.
Because not all Aim stocks qualify for business relief on death, investors must be careful which assets they choose, and the caution needed means some advisers who have used them for IHT tend to do so in a small way.
For example, Paul Stocks, an adviser at Dobson and Hodge, told FTAdviser: "We use an Aim portfolio service, but even then it would only be a small part of the client's portfolio.”
Moreover Aim has a reputation as a more speculative investment forum compared to larger exchanges, due to less stringent regulation.
One concern has been the reporting and regulatory matters of the firms are managed by a nominated adviser who is paid by the firm they supervise, possibly creating a conflict of interest.
When Aim Isas were launched, the head of the corporate finance division at accountancy firm Crowe Clark Whitehill told FTAdviser: “The volatility of some Aim shares may make investors reluctant to hold these investments in Isas, as no relief will be available for capital losses.”
Aim Isas' contribution to the economy
The Treasury’s 2013 decision to open up shares listed on the Aim market to Isa investors promised Aim Isas would contribute to the economy by funnelling money into smaller companies.
George Osborne, the former chancellor, hoped that as the UK emerged from a recession Aim Isas would encourage investment into small but fast-growing companies.
Figures from Wealth Club appear to support Osborne’s plan.
In 2019 Aim companies contributed £33.5bn to the UK economy and supported more than 430,000 jobs, according to Wealth Club.
Jobs created by Aim companies are more productive than the national average, having an average gross value add of £77,700 per filled job, while the national average is £56,387.
As shown in the graph, above, HM Revenue & Customs' Isa data does not break out Aim Isas, it shows that, from the end of 2020 to 2021 the market value of adult Isa holdings stood at £687bn.
