There are a few fundamental questions when considering the suitability of investments:

  • What are the investment objectives?
  • What are the circumstances of the individual on whose behalf these investment are being made?
  • What is the purpose or end game of these investments?
  • What is the timeframe for investment?

When we try to apply these considerations to LISA as an investment vehicle, you can see the problem immediately as at the start of its journey the LISA is potentially trying to do two things at once; save for a house in the short term and/ or save for retirement in the long term.

It's no surprise then that on 25 January, the FCA has just closed a consultation on regulating the promotion and distribution of the LISA, particularly seeking to address the risks that it may present to The FCA's objective to protect consumers. The results of this consultation are expected to be published in March 2017, just in time for the Spring Statement.

This statement from the PTL, the Independent Pension Trustees, are calling for LISAs to have a similar investment governance as pensions, the independent governance committee model. This would they argue, bring some consistency between LISAs and pensions when considering these investments for retirement savings purposes.

Since the announcement of the creation of the LISA in April 2016, there has been much debate about its role in the savings arena. Some (large) providers have gone on record to say they won't be providing a LISA. Due to concerns about the possible impact of LISA on pension savings, there have been calls from the Labour Party to delay its launch until after all companies have completed auto enrolment.

The LISA has certainly stirred up strong opinion and speculation is sure to rise in the run up to April 2017, as we approach the launch of the LISA and the Spring Statement.