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Independent View

The last-minute rush to subscribe for an Isa has come and gone and

hopefully we can all breathe a little more easily and plan our work


Despite their complexities, Isas have been a success. This has been

fuelled partly by the desire of investors to get into technology funds.

But there is no doubt that Isas are complicated. It will be interesting to

see how many people have taken out both maxi and mini Isas during the tax

year when the year-end statistics are revealed. I suspect that the

Chancellor may then consider giving an amnesty to such investors. More

important, I hope he will listen to the industry and simplify Isas by

giving us just one arrangement to invest in next year.

It is inevitable that commentators have started questioning whether

investors should be buying technology. I have to say I was slightly alarmed

to read such an article from an IFA the other day.

Whereas I agree with saying you should sell to your client what they need,

not necessarily what they want, sometimes these are one and the same. It

may be right to be looking at value stocks now as opposed to high-flying

technology stocks but I wonder how many IFAs were recommending technology

funds to their clients two years ago when bond funds and trackers were all

the rage?

Many people have recently invested in technology funds for the first time

and who is to say that this is the wrong thing to do? Technology is here to

stay and improve. Businesses and individuals will be looking at ways of

making life easier, more economical and efficient.

The internet, as well as various software and hardware developments, will

be fuelling this. Investing in companies which specialise in these sectors

will provide some losers but without doubt there will be some huge winners.

Any investor who does not have technology in their portfolio should

certainly look to correct this position as they may well regret it in the


You cannot afford to get carried away with technology but you certainly

cannot afford to ignore it either.

It is unfortunate that the current technology bubble appears to have burst

and prices are very volatile as I write. Having said this, it is not

unexpected and clients should be reminded of the old adage that, although

timing of investment is important, it is the time that you hold it for

which is more important.

No one should have invested for the next five months but the next five

years and clients must be reminded of this fact if they start to moan about

the short-term volatility and perhaps the fall in their unit prices.

Technology is a wonderful thing, as the Stock Exchange discovered on April

5. I find it incredulous after all the prompting, pestering and persistent

reminders we received from the FSA about potential 2000 problems that an

institution such as the London Stock Exchange should not have adequate

back-up procedures.

Why was there nothing in place within the Stock Exchange which would allow

some form of manual procedures to kick in? It always used to run on people

talking to one another to place deals. Are we now too advanced to talk,

agree and then write things down?

Unit trust dealing has always been manual, or should I say archaic. I

therefore welcome the advent of EMX as long overdue and something which all

IFAs should look to support. It is far from the finished article but

anything which makes the placing of a deal and the receiving of the

resulting documentation quicker and less prone to human error has to be


Despite the problems incurred by the Stock Exchange, the sooner we can all

deal in unit trusts or Oeics in the same way as we do with stocks and

shares the better.


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