View more on these topics

Fund firms delay booking their season tickets

Fears have been growing since the terrorist attacks of September 11 that next year may not see an Isa season.

After Isa sales plummeted to £376m in September – a drop of more than 45 per cent on the same month last year – the industry is facing up to the fact that investor sentiment has been hit hard by market conditions, including the 19-month bear market.

Fund managers can usually be counted on to remain optimistic, no matter which direction the markets are heading. But, last week, M&G announced it is effectively writing off January and focusing its Isa marketing efforts on February and March.

Aberdeen also fears that sales are unlikely to pick up until March. Sales and marketing director Jonathan Polin says: “There does not seem to be a lot of advantage to coming out early into the market in January. I think you will find you have got a more narrow sales base this year. Instead of December until March, it will be the middle of March until the first few days of April. It will be a much more concentrated Isa season.”

Although most investment professionals would agree that January is likely to be a better time to get into the market than the start of 2001, their message is unlikely to be appreciated by many investors who bought Isas a year ago and are now sitting on losses of more than 30 per cent.

Investors who let themselves be convinced that the technology market had bottomed out a year ago will be the worst off. A £1,000 investment in Edinburgh&#39s technology fund a year ago, for example, would now be worth around £300.

Perhaps some comfort can be taken from the fact that some fund managers still believe there will be an Isa season, albeit a shorter one. M&G managing director of UK retail Phil Wagstaff is confident that, once the deadline approaches, people will realise that their Isa allowance is too valuable to waste.

“The closer we get to March, the more people will realise that if they do not use their allowance now, it is gone,” predicts Wagstaff.

While Fidelity marketing director David Cowdell agrees the Isa season will come late, he sees no need to wait until the last minute before launching an advertising drive. “I would not be surprised if a lot of investors leave it to the last minute to invest but a lot of decision making will be going on before that. I think you need to be getting out into the market early,” he says.

Although most IFAs try to distance themselves from the usual end-of-Isa-season rush by encouraging clients to invest when the time is right rather than at the last minute, most still do a large chunk of their Isa business in the first three months of the year.

Furthermore, in a tax year which has seen few signs of recovery, many investors may be sitting on cash and waiting for the right moment to put it back into the market. For those who have not used their Isa allowance by the end of the year, IFAs will no doubt be able to make a strong case for at least £7,000 of their cash to be put back into the market.

Plan Invest joint managing director Michael Owen is not ready to write off the beginning of 2002. He says: “I have never enjoyed the Isa stampede. I know people like deadlines but I have always thought Threadneedle had the right approach when it tried to convince people that Isas should be taken out all year around and not just left to the last minute.

“Unfortunately, the mass population is probably not quite ready to invest in Isas yet but I am surprised the managers are writing off January. In years gone by, January has been the best month of the year for sales. There are a lot of people who will be nervous but a fund manager like M&G, which has a good range of fixed-interest products, could be pushing its bond funds. We will definitely be trying to sell Isas in January.”

If several of the big fund management names do decide to take a back seat for the early days of next year, it is possible that newcomers may move into their place. New Star is certain to advertise heavily, while First State is starting a major campaign to boast of its rebranding. Some Isa big names such as Jupiter are also set to continue to advertise as they have done in the past. But the ultimate key to the success of the Isa season probably still rests in the lap of the markets.

Recommended

Find your path in payments maze

There has been a great deal of publicity in recent years over the issue of mortgage repayment. There are two main methods – interest-only and rep-ayment or capital and interest mortgages.Interest-only mortgages involve a borrower in making payments of interest to the lender with no repayments of capital.The loan is instead repaid at the end […]

The rules of the race

The FSA&#39s new mortgage rules should be underpinned by the principle that regulation is appropriate only if it provides benefits to the consumer and does not place an unacceptable burden on the industry.It should seek to provide “baseline” protection for consumers while still allowing providers and brokers the freedom to compete in the services and […]

Savings and investments rising, says Datamonitor

UK savings and investment are increasing but the majority of consumers still hold savings in deposit accounts, according to research from Datamonitor.Its UK Savings & Investments 2001 survey shows that share ownership by consumers has increased in the past five years. Between 1995 to 2000, the UK savings and investment market grew by 9.7 per […]

Swell your Income stream

Financial advisers are finding it increasingly difficult to secure adequate income from mortgage advice alone. It is important that they not only expand their client base but also the products they offer.But what is the best way to go about broadening a product portfolio?Expanding into products associated with the mortgage sale gives brokers the opportunity […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    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

    Email: customerservices@moneymarketing.com