Investing in Innovative Finance ISAs

The FCA published a warning on 1 April about how some firms are promoting Innovative Finance ISAs (IFISAs). The FCA has seen evidence that IFISAs are being promoted alongside cash ISAs.

This is problematic because investments held in IFISAs are generally high-risk. The money is ultimately invested in products like mini-bonds or peer-to-peer investments. 

In addition, these types of investments may not be protected by the Financial Service Compensation Scheme so customers may lose the money invested or find it hard to get it back because of liquidity issues.

Important Note: ATEB news is intended to provide general information ONLY. The content, including any views expressed or guidance provided, does not replace the need to comply fully with FCA Rules and Guidance. Unless you have discussed news article content with ATEB, and specifically how it relates to your circumstances, then ATEB disclaims all liability and responsibility and actions arising from any reliance placed upon it. For the avoidance of doubt therefore, any reliance you place on such information without our consultation is at your own risk.

ATEB Compliance offers compliance and regulatory advice.

ATEB Suitability provides report writing software for the financial services market.

Our View

Anyone considering investing in an IFISA should carefully consider where their money is being invested before purchasing an IFISA. This includes advisers promoting IFISAs, who need to explain the nature of the risks involved very clearly.

Action Required By You

For information.

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About the Author

Technical Manager - Often referred to as the Oracle or the Sage, Alistair has a wealth of financial services experience. He is our go-to Technical Manager and enjoys nothing more than a complicated conundrum. Feel free to test his renowned knowledge by getting in touch.

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