Moret says too much FSA focus on pension wrappers
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Suffolk Life director of marketing John Moret has warned that the FSA may be focusing too much on the cost of pension wrappers and not enough on the investment performance of the assets within them.
Moret says an over emphasis on costs could result in a paralysis in the transfer market which could be detrimental for investors who are left in underperforming funds.
He says: “I think that will be bad news because we have a lot of dogs in these legacy funds - we might get a backlash in five years as a result with lots of people asking why they were not advised to transfer.
“There is still £400bn or £500bn swimming around insurance company funds but the FSA is making it difficult for advisers to make transfers. The focus on costs is understandable but if you go back to the Nineties, there was a debate around costs as opposed to investment performance and that never got played out.”
Bestinvest senior investment adviser Adrian Lowcock says: “Investors can get a lot be-tter performance by selecting their own funds or getting an adviser to help them to get the right asset allocation and the right sector exposure as when you are in a big pension fund the size becomes restrictive.”
Moret is interviewed in this month’s Retirement Strategy
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Readers' comments (2)
Ian | 6 May 2010 3:34 pm
I agree, plus absolutely no interest at all where the client's final destination will be if they remain on the course they are currently on.
Advisers who have no experience of an audit may not agree with the above.
We all know that funds with similar asset splits should perform in a similar way, unfortunately reality shows they do not.
The client's future relies on it, the FSA's careers do not, not short term anyhow.
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How funny!! | 6 May 2010 4:44 pm
OMG, it's taken JM/SL this long to realise that ... jeez!!
Sadly the FSA operatives are generally too thick to realise that charges are NOT the be-all-and-end-all ... comparison should with be the 'net-of-charges' performance ... and eg the salient details relating to the fund manager/team and how he/they deliver/s, surely?? (viz eg Geffen, Chatfield-Roberts who have been strong performers over medium/long term)
And what about asset allocation and macro/micro economics??
Intelligence/common-sense doesn't generate fines/penalties, though does it?? Ooh, almost sounds like the 'hard-sell' that the FSA are trying to remove from 'IFAs' ... how funny!!
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