James Hay has revealed it is banning a long list of Non-Standard Investments for new customers.

The decision comes after an internal review and consultation with advisers, the firm said, adding there was dwindling demand and risk appetite.

From today, James Hay will no longer allow new customers to buy an NSI in a James Hay product (with the exception of SSAS).

But the platform said it will continue to fulfil its obligations with regard to existing NSIs, though it was “not appropriate to continue allowing the purchase of further NSIs”.

A list of NSIs which will no longer be permitted includes:

· Intellectual property
· Land banking
· Overseas commercial property
· Peer to peer lending
· Unconnected loans (whether secured or unsecured)
· Carbon credits
· Storage pods
· UK unquoted shares
· Overseas unquoted shares
· Unquoted loan notes and bonds

· Second Hand Endowment Policies

· Fractional property investments, including property syndicates and other fractional ownership structures

· NMPIs, including:

o UCIS such as Offshore unregulated funds and EPUTs
o closed-ended investment companies not realisable within 30 days (e.g. no active secondary market)
o Other SPV and pooled investment structures meeting the FCA definition of NMPI




Mark Fleet, James Hay chief commercial officer, said: “During 2016 we saw a dramatic reduction in the demand for NSIs. Because of the complexity and risk in many of these asset types of investments many advisers are no longer prepared to advise on them, instead preferring to streamline their investment solutions with simpler investment propositions.

“NSIs now account for less than 1% of our AUA and this figure will continue to fall. Combined with our risk appetite for such investments, we have concluded that restricting the ability to invest in NSIs is a sensible course of action.”

The changes mean for Modular iPlan the specialist investments module will not be available to new customers from this date.

From May, James Hay will not allow existing customers to purchase new NSIs in a James Hay product (with the exception of SSAS).

Gold bullion will no longer be treated as an NSI in James Hay products and will continue to be allowed for new investments (where available as a permitted investment on a product).

The policy for NSIs held by third parties (such as investment managers) is currently under review.