One out of three IFAs have witnessed their ISA business drop by half or more this year as a reaction...
One out of three IFAs have witnessed their ISA business drop by half or more this year as a reaction to market instability, according to a poll commissioned by the AITC and IFA Promotion.
According to the poll, questioning 150 IFAs, only 13% are recommending equity growth funds to their clients and more than 30% of IFAs prefer gilts and bonds.
In addition, clients who are still investing in the stock market are predominantly opting for UK funds.
However, almost a third of IFAs applaud equity income, as the sector has maintained its attraction. This is partly because investors putting money into the market are largely over the age of 50, says IFAP, verified by almost half of the IFAs polled.
"It looks like it's going to be one of the toughest ISA seasons on record. These IFA ISA sales figures reflect this and for a third of IFAs their ISA business has at least halved this year," comments Annabel Brodie-Smith, Communications Director for AITC.
"With markets remaining volatile the majority of IFAs are recommending gilts and bonds, reflecting their clients' low risk threshold."
Despite the gloomy facts, the poll shows that 83% of those customers still investing are using up their complete £7,000 ISA allowance, contradictory to AITC's latest research where 63% of the public surveyed had not used their ISA tax allowance.
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