Providers warn lack of rules preventing Lisa launch

Steven Cameron said product providers would need to see the FCA's final rules before they could design their product, because the Lisa had "unique aspects" that would require "unique regulations".

This, he said, meant there would be a "very limited" number of products available when the Lifetime Isa market opens in April 2017, as providers struggle to get their propositions ready in time.

The FCA has yet to begin its consultation on the Lisa. When asked when it planned to start, an FCA spokesperson told FTAdviser it would begin "in due course".

Given the standard FCA consultation period is three months, that would mean even if it began today (26 September), the deadline for comments could run until the end of the year.

Mr Cameron said that meant the final guidelines were unlikely to be out before February 2017 at the earliest - two months before the launch date.

Elaborating on the "unique regulations" required for the Lisa, Mr Cameron said: "We very much hope the FCA will require certain risk warnings to be issued by anyone who is promoting a Lisa."

We very much hope the FCA will require certain risk warnings to be issued by anyone who is promoting a Lisa.Steven Cameron

These, he said, would include warnings that opting out of a workplace pension in favour of a Lisa would mean losing the employer pension contribution.

That, he said, was because the guidelines stipulated individuals could only contribute their own money to a Lisa, not their employer's.

The rules could also include the requirement for clear warnings that consumers who withdrew their money early would not just forego the 25 per cent bonus; they would therefore lose 25 per cent of their total pot.

In other words, if they contributed £4,000, and received the 25 per cent (£1,000) bonus on top of that, and then withdrew that money early, they would only get back £3,750 - i.e. 75 per cent of £5,000.

But Mr Cameron said waiting for consumer protection regulations of this sort was not the only factor holding product providers back. He said details from HM Treasury were also incomplete. 

Earlier this month, HM Treasury released some details of the design of the Lisa in its Savings Bill and a supplementary design outline.

However, FTAdviser understands the draft legislation is not due to go through its second reading until 17 October, and will not be enshrined in law until some time next year.

With just six months to got before the launch of the Lisa, very few product providers have committed to having a product ready for April 2017.

HM Treasury's recent release of details has made little difference to this.

Of the providers FTAdviser spoke to, only Hargreaves Lansdown were confident they would have a product ready. 

Danny Cox, financial planner and spokesperson for the Bristol-based firm, said they expected to meet the April date "subject to there being no curve balls". 

Zurich however, which had previously stated they would offer a Lisa by April, said they were "reviewing the technical details carefully to assess whether we will be able to achieve this by April 2017". 

Royal London were in a similar position to Aegon, saying their decision on a launch date depended upon the FCA's regulations. 

“Although we’ve had more detail from the Treasury there is still more information required, particularly on the consumer protection requirements, so it is too early for Royal London to decide whether it is appropriate to offer a Lifetime Isa or whether we could have one available by April next year should we decide to go ahead," a spokesperson for the firm said. 

"However, again dependent on having more detailed specifications, we are looking to offer a Lisa wrapper on the Ascentric platform,” they added.

Building society Nationwide, meanwhile, has already ruled out offering a Lifetime Isa.