alanp
Member of DD Central
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Post by alanp on Aug 17, 2017 20:49:22 GMT
But an ISA is an ISA. The "ISAness" hasn't changed, so why should the name change? <snip> Having said that... Yes, I can certainly see the point about financial illiteracy - and agree wholeheartedly. I'm really not convinced that the correct answer to that is to restrict what's on the market, though, rather than try to increase literacy rates. But an ISA isn't an ISA ... not if you expand it so that it says "savings". This is where a lot of the confusion is arising. It's been a problem with Stocks & Shares ISAs (an oxymoron) and is now getting worse with an IFISA. I say "worse" because at least if you write "stocks and shares ISA" there is a small chance that the financially illiterate will see and react to the "stocks and shares" bit. But there is no clue in the IFISA title that there is anything at all risky going on. And, in response to the last comment, I don't think that restricting what's on the market is what we are discussing - it's more about accurately naming things. Not only is there no "Stocks & Shares" bit to react to, they will no doubt be marketed quoting an "expected" return rate and so will look similar to a Cash ISA advert - except "offering" a much higher percentage rate. BTW - I am not picking on any particular P2P platform here, but we all know how easily a "fool" and his money can be parted by slick marketing and "sales patter". You can foresee the day when less reputable "brokers or platforms" cold call someone who has just withdrawn all their pension cash and kicks off with "Would you like to earn 10% a year TAX FREE on that cash you have suddenly got hold of, safe as houses in an ISA?"
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Post by yorkshireman on Aug 18, 2017 10:07:21 GMT
Well said. I have been thinking along the same lines but thought I must be wrong as nobody else seemed worried. A new name would be useful. But it should spell out the tax-free advantage. But an ISA is an ISA. The "ISAness" hasn't changed, so why should the name change? Joe Average has always been able to take that ISA wrapping paper, and slap it around an investment in an equity fund - or even put the entire lot onto a single share... I'm not really convinced there's anything terribly new about IFISAs - they're merely extending the wrapper to yet another different investment. Joe Average has always managed to eschew the relatively-high-risk-high-return world of equity ISAs in favour of nice-cuddly-cash ISAs. You might as well point the finger at the very low base rate, leading to the very low cash account returns - while forgetting that that very low base rate means that the exact same Joe Average is getting similarly low APRs on all his consumer lending, his car lease, his mortgage... Having said that... Yes, I can certainly see the point about financial illiteracy - and agree wholeheartedly. I'm really not convinced that the correct answer to that is to restrict what's on the market, though, rather than try to increase literacy rates. I agree, improving literacy rates would help but where do you start? Schools would be an obvious place but how do you educate the rest of the population? IMO, to achieve increased financial literacy there has to be a fundamental change in the attitude to debt and an end to the “I want it and I want it now” mentality. Yes, mortgages, car finance etc. are a fact of life but I suspect that a lot of credit is for non essential / non urgent purchases which, if I am correct, should be financed by the good old fashioned method of saving regardless of the interest rates on savings accounts. Ergo, a better appreciation of the value of money should (I emphasise should), in time, lead to a more financially astute mind-set which, hopefully, is aware of the dangers of putting money into risky investments such as P2P.
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Post by cashedout on Aug 21, 2017 7:07:20 GMT
I agree with what the guy is saying ( and some other posters ) about investor ignorance, and people thinking ISA means safe. As with relaxing pension cash in rules , there should be more safeguards to protect the financially uninformed from them selves , to a point anyway. However I think he gets a bit carried away with the P2P doomsday scenario. If I was being cynical it could be that he doesn't like P2P as IFA's are reluctant to recommend it as the risk profile is uncertain, and they might get accused of mis selling. Also I am not aware that many P2P sites would pay an IFA commission for introducing clients. So means they get no commission from promoting P2P , so obviously they don't like it ! Actually IFAs don't get commission on any form of savings or investment product. That went years ago.
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