Schroders Personal Wealth has launched a Junior Isa which, according to the company, can help start up conversations with children about the importance of saving.
The Fusion Stocks and Shares Jisa, which is available to clients receiving advice through SPW, will invest in the recently launched SPW Portfolio Funds.
Marcus Brookes, chief investment officer for SPW, said: “We want to encourage conversations about planning for the future and hope the launch of our Junior Isa will help more families start talking about the importance of money and savings with their children.
"Money and finance are an important topic to discuss with children from an early age and we believe more families across the UK should be talking about their finances."
Mr Brookes added that investing for children as early as possible was a "great way of saving each year to build a sizeable amount in the long term".
The SPW Portfolio Fund range comprises six risk-rated, multi-asset funds. Each fund is managed to a specific level of risk and combines different investments and asset types including equities, bonds and alternatives. The SPW Jisa comes with fund manager fees of 0.65 per cent and a platform fee of 0.2 per cent a year.
IFA Tim Morris agreed one of the benefits of saving in a Jisa was to help younger children understand the merits of investing.
He commented: "For me, a key benefit of a Jisa is to start saving for children while young. This is twofold. Firstly, as Einstein said, compound interest is the 8th wonder of the world and those 'who understand it, earn it'. If it’s good enough for Einstein it’s good enough for me.
"Secondly, having some savings from a young age tends to encourage good habits. All being well, they may continue to save themselves. I know it encouraged me.
"And it’s a good way for older generations to save for their children/grandchildren without spending it along the way. Plus it can count towards inheritance tax gifting exemptions."
The Jisa has to be opened by a parent or legal guardian, but once it is opened, grandparents, other family members and friends can contribute, giving greater flexibility for families to save for their children’s future.
In April 2020, the Jisa allowance increased from £4,368 to £9,000 a year. According to the latest government statistics, in the 2018-19 tax year, around 954,000 total Jisa accounts were subscribed to, up from 907,000 in 2017-18.
Earlier this year, an FTAdviser podcast highlighted the importance of using children's savings accounts and investment vehicles such as the Jisa to encourage good savings habits from a young age.
At the time, podcast panellist Claire Walsh, head of advice strategy at SPW, said there was a need to learn more about budgeting and managing debt, and young people needed to know how to make money work for them and have financial education skills taught from an early age.