Eighty-four per cent of financial advisers believe that Individual Savings Accounts (ISAs) have become unnecessarily complicated, according to a new industry survey.
Three-quarters of advisers canvassed in a poll by investment firm AJ Bell thought this over-complication was due to there being too many different versions of ISAs, with nearly a fifth saying this was down to government interference.
Three quarters of the 261 respondents also thought that a single ISA product could cater for all the client needs that were currently being met by the different versions combined.
AJ Bell’s chief executive Andy Bell explained: “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,” he continued. “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. I also think it can be implemented in a way that is cost-neutral to the government.”
In July this year Bell wrote to Chancellor Sajid Javid calling for a review of the ISA system in order to simplify it for customers and make it easier for them to invest.
The Financial Secretary to the Treasury John Glen responded to the letter, saying that “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.”
Bell added that Glen had asked his officials to set up a meeting with AJ Bell to discuss the company’s ‘one ISA’ proposals in more detail.
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