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&#3915% of trusts set to pay out nothing&#39

One-third of split-cap investment trusts stand to lose everything or offer only minimal returns, AITC director general Daniel Godfrey told the Treasury select committee last week.

Testifying before the committee on the same day as Aberdeen chief executive Martin Gilbert and FSA managing director John Tiner, Godfrey estimated that as many as 20 out of 136 trusts will not return anything to investors.

He said 20 will offer reduced returns and another 20 will probably recover despite their exposure to bank debt.

Godfrey told MPs the AITC was concerned about possible collusion between split-cap managers as early as 1998 but had not yet seen any definitive evidence.

Godfrey said he believed the real problems began in 1999 when bank debt began to be introduced as a means of allowing gearing.

Unlike Gilbert, who was reluctant to accept blame, Godfrey apologised repeatedly for marketing zero-dividend trusts inappropriately and not providing investors with sufficient information. He said: “I am not going to use the word hindsight, I think we made a mistake. I want to apologise to shareholders who have lost money.”



“Yes. But thank goodness these are only proposals. There are some very sensible proposals but the terminology needs a sanity check. It doesn&#39t seem workable that tied agents who may give very good advice can&#39t be called advisers. I like the idea of remaining independent and want to be called an adviser so in theory […]

LSE shuns equities for its own pension scheme

The London Stock Exchange is itself avoiding the equity markets by transferring its own pension scheme is to move out of equities in favour of fixed interest. Speaking at its AGM last friday LSE chairman Don Cruickshank accepted the decision was ironic. The closed fund will gradually sell the remaining 25 per cent in equities. […]

Kensington takes direct route with TML buy

Sub-prime lender Kensington Group is buying direct-toconsumer non-conforming specialist The Mortgage Lender for £15m to diversify its distribution.Kensington says it will have three distribution channels – intermediaries through packagers, partnerships with national chains such as Prudential Mortgage Services and to the public through TML.Southampton-based TML, set up in 2000, employs 139 people. It generated revenues […]

Standard Life replaces individual personal pension with flxxi plan

Standard Life has designed personal pension flex, an individual personal pension that replaces the company’s existing individual personal pension.Personal pension flex is designed to offer more flexibility than the previous product in terms of contributions. The previous product enabled policyholders to make annual or monthly contributions, whereas the new product allows contributions to be made […]


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