LTAFs elude retail investors as platforms shun Innovative Finance ISA
AJ Bell, Hargreaves Lansdown, interactive investor and Evelyn Partners’ Bestinvest all told Investment Week they currently have 'no plans' to offer an IFISA.
This follows Chancellor Jeremy Hunt's Autumn Statement, which revealed LTAFs will be made available to retail investors via the IFISA, alongside open-ended property funds with extended notice periods, effective from April 2024.
AJ Bell, Hargreaves Lansdown, interactive investor and Evelyn Partners' Bestinvest told Investment Week they currently have «no plans» to offer an IFISA, but they shared mixed views as to whether retail investors should have access to LTAFs.
Autumn Statement 23: LTAFs to be included in ISAs amid sweeping regime overhaul
Jason Hollands, managing director at Evelyn Partners, said: «LTAFs are regarded by the FCA as higher risk products and are not suited to execution-only retail platforms like Bestinvest, given their focus on illiquid asset classes and longer redemption periods. Direct-to-consumer investments platforms will be especially mindful of this under the Consumer Duty framework.
»This is not to say there is not a place for fund structures that can provide greater asset class diversification, but decisions to purchase investments like by these should be accompanied by professional advice as to their suitability, unless the buyer meets the criteria of being classified as a sophisticated investor."
Tom Selby, head of retirement policy at AJ Bell, echoed Hollands, arguing that while LTAFs may be suitable for institutional investors, «it is hard to see the case for making them available to ISA customers».
Open-ended property fund closures fail to spark platform provider interest in LTAFs
He noted the mismatch between the illiquidity of
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