View more on these topics

AS 2012: Adviser verdict on Govt proposal to include AIM stocks in Isas

George Osborne 450

Advisers say they do not see many benefits in the Government’s plans to consult on expanding the list of qualifying investments for stocks and shares Isas.

In today’s Autumn Statement, the Government announced it will consult on including shares traded on small and medium enterprises equity markets such as the Alternative Investment Market and comparable markets.

Philippa Gee Wealth Management Philippa Gee says the inclusion of AIM stocks would be irrelevant for most people.

She says: “I feel that the Autumn Statement is full of red herrings, which would make people think it is a powerful and positive event. One example is the ability for investors to hold AIM shares within an Isa – this is frankly ludicrous as they would be relevant for only a small proportion of investors given the much higher levels of risk involved.”

Parsonage Financial Planning director Flora Maudsley-Barton says: “To enable people to invest in AIM stocks via Isas is borderline crazy. The vast majority of investors do not understand ‘illiquid’, but they will do so very quickly if they go down this route.

“Everyday investors should be going nowhere near a niche sector designed for typically higher-net-worth individuals with highly diversified portfolios.”

Chelsea Financial Services managing director Darius McDermott says investors need to be aware of the much higher risk of the AIM market.

He says: “Including them should give a boost to the AIM market, however AIM is a much more volatile place. It does have some very small and immature businesses. I would say it is essential that you use a fund to access this market, rather than an individual going in and picking their own AIM stocks.”

Informed Choice managing director Martin Bamford says he does not see much investor appeal for the move.

He says: ”The ability to invest in AIM listed companies within an Isa is very unlikely to boost investment into these companies. The majority of investors we speak to prefer to stick with mainstream investments so AIM companies will not appeal.”

Pilot Financial Planning director Ian Thomas says: “AIM in Isas has limited appeal because most investors looking to invest in a diversified portfolio will not wish to allocate a significant proportion of their investment to volatile, micro-businesses with less liquidity than the main market.”

Adrian Lowcock 200

But Hargreaves Lansdown senior investment manager Adrian Lowcock says a move to allow AIM stocks to be used in Isas would be attractive.

He says: “Adding AIM to the list of what is allowed to be included in an Isa would be good news. Investors would be able to invest in smaller, entrepreneurial businesses whilst benefitting from the same tax breaks they get for investing in larger companies.”

Jonathan Davis Wealth Management managing director Jonathan Davis also welcomes the move.

He says: “I have no problem with Isas holding AIM investments. In fact, after a sharp fall in AIM, I would welcome the opportunity to get in and obtain tax free growth from smaller fast growing companies.”


News and expert analysis straight to your inbox

Sign up


There are 4 comments at the moment, we would love to hear your opinion too.

  1. Greater investment choice is welcome especially the fact the AIM shares have an IHT advantage. Would be attractive for elderly investors looking to shelter some assets albeit at a higher risk level. Pity most adviser aren’t licenced/qualified to advise on them though.

  2. Astonishing – a whole article on AIM possibly being made open for ISAs (this is only being consulted on Osborne said) and there’s no mention at all that there could now be IHT exemption benefits for ISA investing as a result of this (BPR?).

    Don’t know if this is the case yet but certainly it could be.

  3. What’s the chance of your PI insurers covering this risk? Not a chance.
    Any IFA daft enough to recommend it to the average punter – or not warn them off if they ask whether it’s a good idea – will be looking at a massive liability the first time values plummet, which they do periodically.
    You’re on your own with this one Mr Osborne.

  4. AIM shares in Isa vs Aim shares in EIS?

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm