The Tax-Incentivised Savings Association is backing the Government's proposals to allow Child Trust Funds to transfer to Junior Isas.
This is on the proviso that CTFs are allowed to roll over to an adult cash or stocks and shares Isa on maturity, outside of the normal Isa investment limit.
TISA argues that allowing the migration of CTFs into adult Isas would encourage CTF providers to invest in existing products and retain maturing business.
It hopes this would lead to more competition between providers and more attractive products for CTF customers.
{desktop}{/desktop}{mobile}{/mobile}
Jeffrey Mushens, TISA technical director, said: "We are firmly in favour of providing CTF and JISA customers with greater choice in a market that promotes competition.
"However, some of our members are anxious about the risks for the existing CTF market. There is a danger that many of the higher value CTFs may transfer to a JISA making it difficult for CTF providers to continue to service the high volume of remaining low value accounts.
"This would be particularly damaging for those of the 6m children who have trivial amounts in their CTF and would be to the detriment of consumer choice and product competitiveness."

• Want to receive a free weekly summary of the best news stories from our website? Just go to home page and submit your name and email address. If you are already logged in you will need to log out to see the e-newsletter sign up. You can then log in again.