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IFAs boosted by Isa complexity

IFAs have cornered the market for selling certain types of Isa at the expense of tied agents and company representatives, according to new research.

Marketing analyst Mintel International says IFAs are now the preferred distribution channel for unit trust and Oeic Isas.

In the last tax year, IFAs were the source of over a third of Oeic and unit trust Isa sales. A year later, they were responsible for over half of sales.

The research suggests it is the complexity of Isas which has led people to seek independent advice. Mintel says confusion arises between maxi and mini Isas and that consumers see Isas as more complicated than Peps or Tessas.

Mintel suggests the reality differs greatly from the Government&#39s original plan to sell Isas at supermarket checkouts.

Isas continue to gain in popularity but the majority of sales come from Pep and Tessa holders rather than new investors.

Finance consultant Brett Afshar says: “IFAs have emerged well as consumers arefinding Isas more compli-cated than Peps and Tessas and want their hands held when they are choosing them.

“The research shows the Government&#39s big aims for Isas have failed. It hoped to have 12-15 million Isa users but so far there are only nine million. It seems a vast proportion of cash Isa deposits have occurred as a result of investors switching their savings balances.”

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