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Calls To Urgently Review Advice Boundary In TISA Stocks And Shares ISA Report

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TISA has today launched a report produced by Oxera: “The keys to unlocking greater investment in Stocks and Shares ISAs.”

The four calls to action from the report:

  • To address low engagement, the Government urgently needs to review the legislative framework around the prompts, nudges, alerts, and suggestions. Firms ought to be enabled to deliver personalised guidance that explains the risks of holding too much cash, encourages affected people to act and helps those people choose an appropriate investment.

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  • People are calling out for industry to provide simpler and clearer information on S&S ISAs. The benefits of diversified funds and having a fund manager to manage risk should be better communicated.
  • A joint approach is needed between the FCA and the industry to ensure people obtain a more balanced and accurate appreciation of the risks (as well as the benefits) of investing.
  • A joint approach is needed between industry, the FCA and Government on creating a more inclusive retail investment market.

TISA's Stocks And Shares ISA Report

Chris Hill, CEO, Hargreaves Lansdown

We welcome the report findings, particularly the call to review the advice boundary which is a significant barrier to our ability to help engage consumers and guide them towards better outcomes. 

Whether it is pointing clients to a lower cost index tracking option or reducing the risk that clients run out of pensions savings too soon, there’s a bigger role firms can play supporting their clients. 

The FCA’s review into the advice boundary is a big opportunity to demonstrate how innovation and better use of data analytics will enable greater engagement through improved personalisation. This is a crucial step to help savers and investors meet the challenges of the cost-of-living crisis and support the nation as we rebuild our financial resilience.

Everyone has a role to play here, including us, to ensure that savings and investing is accessible to all and recognising that a one size fits all approach to communications does not work.

HL’s vision is to transform the savings and investment experience, combining the best of human expertise with digital capability and delivering a uniquely personalised service – this will redefine the client experience and with it, wealth management.

Our understanding of the market and client insight show us that the market is at an inflection point: client expectations and demands have been accelerated by the pandemic, the service gap is widening, regulation is shifting, and technology is transforming.

From where we sit as the market leader, there’s a huge untapped opportunity to help the UK build financial resilience, especially against the backdrop of continued economic uncertainty and concerns about the basic costs of living.

Report Also Warns That Cryptocurrency Is Seen As More Exciting Than S&S ISAs

Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown:

Speculators have been throwing the dice hoping for giddy returns by piling money into crypto, rather than making a more sedate choice and opting for lower risk investments like Stocks and Shares ISAs.

The crypto Wild West is seen as a more ‘exciting’ option for consumers compared to ISAs according to the latest research from The Investing and Savings Alliance (TISA).

Crypto became the new hot topic of conversation at dinner parties and school gates, as coins and tokens went on a rollercoaster ride, and that trend has also been backed up in this data, with people who invest in crypto assets more likely to talk about it with friends and family.

As we’ve seen over the past year with the dramatic rise then fall in crypto prices, the desire to show off and claim such investments are making a difference, can be a dangerous game to play if consumers don’t have the money to lose.

Right now, with pandemic savings dwindling and cost-of-living concerns rising, people need to concentrate on trying to preserve a cash buffer if they can increase their financial resilience, rather than ploughing any spare money into highly risky investments.

While those who invest in stocks and shares ISAs see themselves as prudent and feel good about themselves, resisting the pull of ‘excitement’ is clearly hard. We need a shift in attitudes and particularly the perception of group admiration for crypto enthusiasts.

It’s important to underline benefits of investing over the longer term in companies which provide real output, jobs and have the potential to help economies grow. This should enable speculators to become good investors and by warning of the perils of investing in meme stocks, over well thought out investment strategies, already we’ve shown progress in this area.