ISA decisions are only worth a couple of minutes
Recent research conducted by Legal & General Investments shows that some investors only spend a couple of minutes reviewing which funds to invest in via their ISA.
The study reveals that most equity ISA investors remain largely inactive in managing their ISA holdings. Nearly one fifth (17 per cent) of investors spend less than half an hour choosing the funds in which their ISA is invested and for one in ten of ISA investors (8 per cent), only ‘a matter of minutes' is dedicated to making this decision. Even those with more at stake were revealed as inactive investors; more than half (68 per cent) of investors with over £50,000 in their ISA admit to taking just two hours or less to review their holdings every year.
The motivating factors for investor's attitude towards their investments vary, with one in ten (10 per cent) stating that they simply don't think that their investment is large enough to warrant checking. According to the research, the average value of the respondents' equity ISA was £27,712. It is surprising therefore, that many of these investors spend so little time reviewing the fund in which their ISA is invested.
Reassuringly, the research shows that a third (35 per cent) of investors rely on an IFA to take care of their investment decisions.
Claire Evans, Marketing Director of Legal & General Investments, said: "An equity ISA is a tax efficient way of investing directly into the stock market and for an increasing number of people, an equity ISA is the first step to feeling comfortable with the risk and reward nature of investment. There is no such thing as a ‘risk-free investment, yet a surprisingly large proportion of investors are dedicating less than half an hour to reviewing the fund in which their ISA is invested."
"Through utilising your yearly ISA limit, which sits at £10,200 per annum, investors can accumulate a healthy investment pot. They can make returns by regularly monitoring their investment, but they need to remain engaged."