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Bowes warns of dangers in plan for Isa equity switch

AWD Chase de Vere says the Government is being “duplicitous” with its Isa reforms and risks massive consumer detriment by not allowing a switch back from shares to cash.

Investments manager Anna Bowes says the danger in the reforms, laid down last week, is that people are much more likely to take advantage of the move from cash to shares when the markets are high.

She says for the majority of investors it would be a “terrible idea” to use the switching option and those that believe they have built up too much cash should seek advice before making a decision.

Bowes says the changes to allow the switch from cash to shares but not the other way “smacks of a ploy to actually reduce overall cash holdings in Isas as they have a vested interest in seeing this happen”.

She says: “We feel that the Government is being duplicitous by allowing investors to switch from cash into stocks and shares but not to switch back at a later date if required. There is really no clear message with these new rules.

“The danger of allowing the transfer out of cash is that people are far more likely to take advantage when stockmarkets are at a high rather than when things have taken a tumble.

“Basically, even though this option has been introduced, we feel that for the majority of investors it would be a terrible idea to utilise it. However, if they feel they have built up too much cash over the years, it would be wise to seek independent financial advice before making the switch.”

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