Contractors who are looking forward to building their own war chest should be more cautious when they are about to place shares in AIM-listed companies inside Individual Savings Accounts, so says a renowned financial advisor.
Hargreaves Lansdown says that the wider choice of investors is a result from the recent proposal. However, in his opinion, SME equities should have the opportunity to hold shares and stocks in Individual Savings Accounts. The firm’s response is forwarded to the Autumn Statement 2012. The company is in the opinion that the goal of the recent proposal is to stimulate investors to inject funds in SMEs.
The company’s statement continued with: “Giving investors an opportunity to access over 1,000 AIM stocks in Individual Savings Accounts also gives them the choice to efficiently invest in SMEs.”
Danny Cox, head of advice at Hargreaves Lansdown added: “Investors should know that these shares are higher risk than blue chip stocks, so they are not a good choice for many investors.”
If the proposal is accepted, then it is very likely that contractors will take advantage of the opportunities it provides. However, we are yet to see if the higher risk shares and stocks will prove to be an efficient way to make the most out of ISAs.
Tony Harris, founder of IFA Contractor Money, is in the opinion that if this proposal is accepted, then ISAs will become very popular among contractors in 2013. He said: “The proposal will introduce new flat rate state pension the value of which will be approximately £140 a week, compared to the £107.45 value at the moment. Despite the significant increase, the pension is still relatively low when compared to the average earnings of most contractors.”