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Ainsworth Says Sandler review is biased

Threadneedle deputy chairman Alan Ainsworth has launched a scathing attack on the Sandler consultation, saying it is misfocused and biased.

Speaking at Cadogan International&#39s annual unit trust and investment fund conference on Tuesday, Ainsworth said the Sandler consultation had focused on three examples of market inefficiency – lack of consumer experience, IFA domination and obscure products.

But Ainsworth said he disputed that these were comprehensive, accusing Sandler of painting a “patronising view of consumers” and of missing important points such as the relevance of taxation benefits when recommending higher-commission products.

He said buying investment funds was relatively simple compared with much more common consumer activities such as buying a PC or understanding mobile phone tariffs.

The Sandler review questions the UK&#39s reliance on the intermediary channel, suggesting that consumers seek advice because they lack time and expertise to shop around. But Ainsworth said all the world&#39s most sophisticated markets contradict this as they are moving towards advice-dominated channels.

He said: “Having convinced themselves of information asymmetry, they say that direct buying is lower than it should be. I think this is based on an out-of-date view of the US.

“Direct buying in the US is decreasing very rapidly and advisers have emerged as the main channel. All the international information I have suggests advice is growing.”

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