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Isa sales fall and IFAs lose ground to direct rivals

The 2000/01 Isa season ended disappointingly, with sales in March falling to £1.3bn from £2.3bn in the same month last year, according to Autif figures.

Investors&#39 traditional end-of-year rush was muted, with total net sales for the year to April 2001 down by 13 per cent at £9bn from £10.4bn for the previous tax year as investors, burned in the technology stock bubble of last spring, stayed away.

IFAs&#39 share of Isa sales fell to 41 per cent of all sales in the year to April 5 compared with 50.5 per cent the previous year. IFAs lost market share to direct salesforces, whose share rose to 36 per cent from 26 per cent last year.

Industry sources attributed the fall in the IFA sector to investors seeking safety with bond and income funds more likely to be sold through direct channels rather than the high volumes of technology funds sold through IFAs last year.

UK all companies funds were the most popular with retail and institutional investors, with the retail sector also favouring UK other bond funds and institutional investors favouring North American funds.

M&G deputy managing director (UK retail) Phil Wagstaff says: “Last year, a lot of people invested when the sun was shining. This year, there is a bit of rain and people are staying indoors.”

Wentworth Rose managing director Philip Rose says: “I think we will see most people coming back once the markets turn. We know the smart money buys when markets are low but that is not the way human beings work.”

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