Scottish Friendly rethinks the ISA

Press release - 10th December 2012

    • Mutual organisation aims to make stocks and shares ISAs mass market
    • Research highlights lack of awareness on ISA investment allowance

Scotland's largest mutual organisation today officially launched a new approach to the design and development of the stocks and shares ISA.

My Choice (ISA)” from Scottish Friendly is set to change the investment and savings landscape, by offering ordinary people investment into stocks and shares ISAs from just £10 a month.

The stocks and shares ISA allowance (named your Investment ISA allowance by Scottish Friendly) has until now gone relatively un-noticed by the people who could most be benefiting from it.

For years, stocks and shares have been viewed as financial perks available only to the wealthy and well advised. “My Choice” is a real silver lining story opening up the privilege of owning an investment portfolio to the mass market, making them both affordable and accessible.

Neil Lovatt, sales and marketing director at Scottish Friendly explains: “We have conducted focus group research over a number of years and noticed a widespread pattern of customers only ever referring to ISAs as cash based investment. Clearly very few people had even heard of the other half of their ISA allowance."

“That's why we wanted to create a concept that allows everyone to set up an accessible Investment ISA to complement their cash ISA. The trouble is that right now the Investment ISA market is pitched at the high premium end of the market and is just not accessible for investors looking just to get started with a small investment, the kind we have been specialising in for 150 years.”

Scottish Friendly’s “My Choice (ISA)” offers a new approach to ISA design building on the award winning wrap technology developed by Scottish Friendly. Instead of clients holding a single ISA investment pot, Scottish Friendly's new ISA range breaks a client's investment down into manageable chunks.

This is achieved by giving the client the flexibility of investing their money through a life policy. And with no limit to the number of life policies that can be held within an ISA, customers can set up multiple policies wrapped within their ISA allowance, each one designed to meet a specific goal. Each life policy can be tagged or named by the customer to help remind them what each one is for - for example ‘a new car’ - and help them build a healthy regular investment habit.

Each policy held within the ISA allowance has exactly the same kind of flexibility expected from a direct investment so customers can stop, start, increase and decrease payments and make withdrawals or cash in whenever they like with no charge or tax penalty. Customers can also set their contributions to increase each year helping to build their regular investment habit over time.

Again, building on its experience in the advised wrap market, Scottish Friendly is also launching “My Plans” - an online space which allows the customer to be fully in charge of their own investment. Within My Plans customers will be able to view and manage all of their life plans within their ISA allowance.

By highlighting the flexibility of holding separate life plans all wrapped within their Investment ISA allowance, customers now have a more accessible and simple method of utilising the other half of their ISA allowance.

Scottish Friendly will initially offer a choice of tracker and actively managed funds including: UK Active Growth, UK Tracker, UK Ethical, Government Bonds and International Company Bonds fund, all with simplified stakeholder-style charging. It also expects to launch a range of other funds early in 2013 including with-profits.

Lovatt continues: “The launch of My Choice (ISA) is the first of several new products we are planning to launch highlighting the flexibility we've facilitated in the Investment ISA market. Using life plans within ISA is a dying art form, but we've taken a radical approach to the design and with My Plans, we've been able to build a wrap for everyone.”

My Choice (ISA) and My Plans is the first part of a significant shift in Scottish Friendly's product range designed to make the Investment ISA a truly mass market product.

The value of stock market investments can go down as well as up and investors may not get back their original investment. Overseas investments are subject to currency fluctuations.

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