Three quarters of advisers questioned by platform and SIPP provider AJ Bell say there are too many different versions of ISAs.
Currently there are six different versions ranging from Cash to Innovative Finance.
Three quarters of advisers believe a single ISA product could cater for all the client needs the current versions meet.
At the end of July this year, AJ Bell CEO Andy Bell wrote to Chancellor Sajid Javid calling for a review of the ISA system to make it easier to invest in.
An AJ Bell policy paper detailed how the existing versions could be consolidated into a single product, a ‘One ISA.’
Some 92% of advisers backed a move to consolidate the six current versions of ISAs into One ISA, according to AJ Bell.
|
Q1. Do you think ISAs have become unnecessarily complicated? |
% |
|
Yes |
84 |
|
No |
16 |
|
|
|
|
Q2. If yes, what has caused this complication? |
% |
|
Q2.1. Too many different versions of ISA |
75 |
|
Q2.2. Lack of coordination between HMRC and the FCA |
7 |
|
Q2.3. Government interference |
17 |
|
Other ("Too complicated") |
1 |
|
|
|
|
Q3. Do you think a single ISA product could cater for all the client needs the current versions meet? |
% |
|
Yes |
75 |
|
No |
11 |
|
Don’t know |
14 |
|
|
|
|
Q4. Do you support our proposal to consolidate the six ISAs into one? |
% |
|
Yes |
92 |
|
No |
8 |
Source: AJ Bell Survey, Sept 2019
Financial Secretary to the Treasury, John Glen responded to the letter by saying, “the Government is committed to supporting all savers of all incomes and at all stages of life. ISAs are a key part of this support….It is therefore important that the scheme remains simple and sustainable for consumers and savers alike.”
Mr Glen has asked his officials to set up a meeting with AJ Bell to discuss the One ISA proposals in more detail.
Andy Bell, chief executive at AJ Bell, said: “When you take a step back and think about the fact we now have at least six versions of what started out as a very simple product it seems completely absurd. It is a classic case of product over engineering centred in political point scoring rather than focusing on the needs of customers.
“It’s not too late to change though. ISAs are still very popular and it would be relatively easy to wind all the current versions back into a single ISA product. I think this would be an extremely positive and popular change that would be welcomed by consumers, financial advisers and ISA managers.”
• 261 advisers responded to the survey conducted online and at AJ Bell’s ‘On the road’ seminars in September 2019.