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40% of IFAs would still recommend US funds

Despite the collapse of Enron and Worldcom, over 40 per cent of IFAs say they would still recommend US investment funds, according to George Street Research.

Its latest research, conducted for Money Marketing in July among more than 200 IFAs across the UK, found that only 17 per cent would be a lot less likely to recommend US funds following the scandals.

The research also found that 134 IFAs claim their PI premiums increased over the past year but only 10 per cent have noticed a serious impact on their business. Sixty-six per cent said they have experienced no serious adverse effects at all from the increase.

Informed Choice managing director Nick Bamford says: “In 2001, our premium was £2,750. In 2002, it went up to £8,400 and our excess doubled. These are pretty bleak numbers. It will not have a serious impact on business but looking at PI premiums in isolation does not give the whole picture. It is part of an overall trend of increasing costs and seems an excessive burden to cover risk in a well managed business that has never had a claim.”

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