ANZIO Digital Isa Give You Poor Advice

by Patricia Montgomery, LincsMag Writer.
Date: 01 March 2011

Isa Give You Poor Advice - Lincolnshire Magazine -

It seems that Banks and building societies are giving shockingly poor advice to consumers with cash Isas, claims a leading Consumer Champion.

In an undercover investigation, just three out of 104 calls to cash Isa providers resulted in correct answers to all four simple questions about cash Isa transfer rules.

In November and December 2010 mystery shoppers called the 13 top cash Isa providers as held by Which? members, eight times each to test how well bank and building society staff explained cash Isa transfer rules.

In just three of their 104 calls did they receive correct answers to all of their four simple questions, which were (along with what should have been the correct answer):

1) How do I transfer my Isa?

The key thing to remember is to always ask the new cash Isa provider to arrange the transfer; never close your old one yourself and open a new one, as you’ll lose the tax advantage.

2) How much I can transfer?

The fully correct answer to this is that you can only pay into one cash Isa in each tax year. So if you want to transfer your current year’s subscriptions you must transfer all of them, not just part of them. But you can transfer as much or as little as you like of any previous year’s subscriptions.

3) Can I leave some money with you and transfer the rest to a different Isa?

The answer they wanted to hear was yes. You can transfer all or part of any cash Isa subscriptions from previous years.

4) Can I transfer my money to a stocks and shares Isa?

Since 2008 it has been possible to transfer money in a cash Isa to a stocks and shares Isa. If you transfer your current year’s subs you are treated as though you never subscribed to the cash Isa, which means you can go on to take out a new cash Isa later in the current year without breaching rules that say you can only have one Isa of each type in a tax year.

And The Response

HSBC answered the fewest questions correctly (scoring an overall average of 32% for the four questions), followed by the Royal Bank of Scotland (35%), The Co-operative Bank and First Direct (both with 38%).

Most advisers (97%) gave conflicting and incorrect information about how much consumers could transfer and 43% were unaware that you could move money from one type of Isa to another (stocks and shares). One clueless HSBC adviser even suggested that the more money people had, the longer a transfer would take.

Which? chief executive, Peter Vicary-Smith said, “We were genuinely shocked by this Isa investigation. Cash Isa transfer rules aren’t that complicated and cash Isas have been around since 1999 – surely 12 years is long enough to learn the rules?

“We last looked at Isa transfers seven years ago; how disappointing that training for staff doesn’t seem to have improved since then. Surely banks and building societies have the resources to ensure their frontline staff are properly trained?”

Which? believes that customers should be able to get clear and correct advice and wants the industry to train their frontline staff. Which? is also calling for the industry to introduce electronic transfers for cash Isas to speed up the transfer process.

Who answered the questions correctly?

This shows the overall average percentage scored by each bank and building society for the four questions that were asked.

To score full marks for a question, the adviser had to give the information Which? were expecting, with no wrong or unclear advice. They made eight calls to each provider.

Nationwide – 69%
Barclays – 63%
Yorkshire Building Society - 63%
Santander – 60%
Britannia – 60%
NatWest – 51%
Halifax – 47%
Lloyds TSB – 44%
ns&i – 41%
first direct – 38%
The Co-operative – 38%
RBS – 35%
HSBC – 32%

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