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Providers lobby Treasury to ease pension-ISA transfers
by William Robins on Aug 04, 2011 at 09:48
Pension providers have called on the Treasury to make the transfer of assets between ISAs and pensions easier as part of its savings reforms.
Hargreaves Lansdown,Friends Life, Suffolk Life, Pointon York, LV= and Sipp provider AJ Bell have written a joint letter calling for rule changes to allow assets to be moved from ISAs to pensions in specie, cutting out the need to encash investments before they are transferred.
The group of providers wrote: ‘The Treasury has rightly identified the possibility that ISA feeder funds for pensions and combined ISA/pension accounts could encourage increased financial engagement and retirement planning, through workplace savings schemes or for individuals.
‘There is a significant obstacle to achieving this goal however, which is that investors cannot readily move investment assets between an ISA and a pension such as a Sipp, without considerable cost and effort. We believe that there is therefore an opportunity for the Treasury to promote financial engagement and to simplify the financial system to the benefit of consumers.’
They added: ‘Not only is this a deterrent for the individual, it also means additional unnecessary administration and therefore cost for the pension provider,’ the letter said.
They argued the spread of individual and corporate wrap accounts meant increasing numbers of investors would benefit from a reform that made it easier to move investment holdings between different accounts.
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5 comments so far. Why not have your say?
New Modal Bob
Aug 04, 2011 at 10:02
I wonder why these providers, especially HL who provide advice, actually consider it to be good advice to move money from an ISA into a Pension. Surely doesn't seem to be in the best interest of most if not all clients...
report thisGreg Kingston
Aug 04, 2011 at 10:11
@New Modal Bob
This isn't solely looking at ISA tp pension transfers, but rather transfers of assets in specie no matter what the wrapper, be it ISA or pension.
There's no agenda to push ISAs to transfer to pensions - simply to simply and speed up the in specie process be that a transfer or a contribution.
Handling an in specie pension contribution is complex and costly for adviser, investor and provider alike, and not without risks for all parties, in particular the investor. That doesn't change if the contribution is from an ISA or from the client direct.
report thisRoz Sutoris
Aug 04, 2011 at 10:26
New Modal Bob, very little of HL's activity involves advice. Most transactions are execution-only and often as a result of publishing enough 'generic information' and 'guidance' to let investors make their own decisions...
report thisAnitaki
Aug 04, 2011 at 10:33
sounds more profitiable than flogging endowments......... The next bandwagon is just about to leave. Get another cheque ready for the FSCS.
report thisNeil Telford
Aug 04, 2011 at 12:44
Typical. As soon as anyone mentions HL, people start posting comments and slagging them.
There are many people who are more than capable of making their own investment decisions and have no need to use an IFA. HL are low cost, provide good customer service, and you aren't restricted to just investing in OEICs or Unit Trusts.
That is why they are so successful.
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