Newstar Investments
Thu, 11 Feb 2010 22:16:34 +0000
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By
James Salmon
Last updated at 6:51 PM on 11th February 2010
Around 70,000 investors with stricken fund manager New Star have until Monday (February 15) to decide what to do with their Isa. The looming deadline has raised concerns that some investors - holding around £900 million in New Star Isas - could lose some of their Isa allowance forever by withdrawing their money. New Star was bought out by Henderson last January in a rescue deal worth £115 million.
Quick decision: New Star investors have just a few days to decide what to do with their Isa funds
Last month New Star investors received a letter informing them their Isa money would be switched to Henderson on February 15, unless they opted to transfer elsewhere.
Experts complain investors haven’t been given long enough to make a decision, particularly as the new tax year is almost two months away. Investors who do switch to Henderson New Star’s Isa will remain in the same funds, with the same chargesBut discount broker Willis Owen says it has been inundated by calls from confused customers. Alan Easter, director of Willis Owen says: ‘Our clients are confused and worried about what to do. Part of the problem is that while New Star was relatively well known by investors, Henderson has less of a presence. A lot of investors don’t know which way to turn. The main issue is that if people take out their money, they lose out on the tax benefits of an Isa wrapper.’Easter says although his firm has experienced record sales of funds since January, a third of redemptions have been Henderson New Star funds. He adds: ‘Given the level of confusion and impending deadline, we think Henderson should give investors more time to consider their options.’A Henderson New Star spokesman says it was forced to send this letter by the Financial Services Authority and is unable to extend the deadline. It says around 80,000 investors have given the thumbs up to the switch but 70,000 have yet to reply.’We apologise for the confusion and recognise that Henderson is a less prolific brand. But there will be no change to underlying investments.’He adds: ‘There have been net inflows in our funds.’ Henderson New Star recently announced it will ditch the New Star brand.Find free investment advice with our online search
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