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&#3950,000 lost split cash as IFAs did not know risks&#39

Up to 50,000 investors have lost money through the collapse of split-cap investment trusts because most IFAs were una-ware of the risks involved, according to Labour MP and chairman of the Treasury select committee John McFall.

Writing in this week&#39s Money Marketing, McFall attacks some of the “leading firms” involved in marketing the trusts for refusing to acknowledge the crucial role they have played as the crisis deepens.

The all-party committee has been holding a high-profile inquiry into the roles played by fund managers, brokers, the AITC and the FSA into the implosion of split caps.

Referring to splits as “Frankenstein&#39s monster”, McFall says those who created it were simply interested in pro-fit, not the welfare of investors&#39 money.

He says fund managers are guilty of producing a “lethal cocktail which blew up in people&#39s faces while they walked away with their millions in bonuses earned on the back of a disastrous performance”.

McFall says: “If the industry does not introduce measures to clean up its act, legislation or some kind of FSA regulation might be necessary. It is critical that the need for swift and effective action is impressed upon the industry.”

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