Two leading IFAs are calling on the FSA to clamp down on Isa broker guides issued by many discount brokers, claiming they are misleading investors.
Torquil Clark says the FSA needs to tackle the “highly questionable” fund selection process used in many of the guides.
In a letter to FSA chief executive Howard Davies, Torquil Clark managing director Don Clark attacks what he calls pseudo-guides being distributed with national newspapers.
He says that, although the guides may comply with FSA rules, fund managers are subsidising a broker's business in what is effectively a multi-tied relationship.
He is concerned that the guides only feature best-selling funds, use the words “independent” and “impartial” without qualification and seem connected to the newspapers.
Hargreaves Lansdown claims many of the guides are effectively advertorials for the fund managers and and it is often not clear who has produced them.
Hargreaves Lansdown managing director Peter Hargreaves says: “These guides are duping the general public. They should clearly state they are advertising features and which broker they are produced by.”
FSA spokesman Rob McIvor says: “We are doing nothing specific about the guides. But PIA rules do specify what proportion of a guide a product provider can fund through advertising.”