Isa sales plummeted by 20 per cent in January as sales by tied agents overtook IFAs, according to Autif figures.
Autif is predicting that total sales for this Isa season could be a third lower than last year.
Tied agent sales were up by £8m to £266m in January from £258m in January 1999 while IFA sales slumped by £45m to £225m from £270m.
Net Isa sales fell by 20 per cent to £517m, down from £646m. Gross sales dropped by 5 per cent to £637m from £673m last year.
The fall comes against a background of market uncertainty and the hangover from exceptionally high levels of investment in technology stocks last year.
The best-selling retail funds in January were UK all companies and Europe excluding UK. UK money market and UK equity income funds were the worst sellers despite good performance.
Institutional purchasers preferred Far East excluding Japan and global emerging markets funds, with UK smaller companies and European smaller companies selling the least.
An Autif spokeswoman says: “We think that Isa sales will be down by about one-third over this Isa season. The markets are not going the way people would be hoping and there is no single theme to lead the way like technology last year.”
Hargreaves Lansdown investment director Stuart Louden says: “We would expect direct sales to do better. Intermediary sales are more a reflection of confidence in the market. Direct sales are reflected by the number of salesmen knocking on doors.”
Falcon Group chief executive Alan Rosengren says: “The serious longer-term investors are still tucking away Isas.A lot of the hot money last year was in the discount market.”