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10 Mar, 2008

Samantha Shaw - 10-Mar-2008

Advisers should still recommend equity Isas despite market turbulence and not just stick to cash, says Fidelity FundsNetwork.
The platform says there is an opportunity of over £123bn currently held in cash Isas that is eligible to transfer into a stocks and shares Isa from April 6.

FundsNetwork says if investors held the £3,000 limit in a cash Isa every year since their inception in 1999, their pot would be worth £29,619 compared to a UK equity Isa, which would have resulted in a fund of £37,214.

Head of sales and marketing Rob Fisher says looking beyond the UK, the average global emerging markets fund would have yielded £63,830 at the same amounts.

Fisher says the new rules next week should encourage more investors to switch at least part of their cash holdings into equities, despite market volatility.

He says: "Since the introduction of Isas, most equity markets have seen a bear and a bull phase. While cash clearly has its attractions, over time it has been a less effective means of managing for inflation than equities. To preserve the real value of your client's savings history investors should have at least some of their money in shares."

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