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Baillie Gifford and AITC in stakeholder CTFs plea

Baillie Gifford and the AITC have issued an eleventh-hour plea to the FSA for investment trusts to be made eligible for inclusion in stakeholder child trust funds.

Baillie Gifford chief executive Chris Fletcher wrote to the FSA urging it to allow investment trusts to be inclu-ded in the CTF stakeholder option on the basis that many trusts are significantly chea-per than funds eligible for stakeholder CTFs.

Fletcher argues that many global generalist trusts such as the Baillie Gifford-managed Scottish Mortgage trust have annual management fees of 0.4 per cent or less, which is well within the charge cap.

The regulator is formulating its CTF rules this month for publication on December 1. The FSA has asked Baillie Gifford if it can put the letter on the regulator&#39s website but is not expected to allow investment trusts into stakeholder CTFs, at least not at the product&#39s launch.

AITC communications director Annabel Brodie-Smith says almost a third of the member trusts have AMCs under 1 per cent and the AITC will continue to lobby for their inclusion.

Research by the AITC reveals that 62 per cent of parents and grandparents have not heard of CTFs and among low-income families – social group E – this figure is 70 per cent. Among AB parents, there is a 45 per cent awareness.

Fletcher says: “Our trusts would be cheaper than any stakeholder options, particularly with a 1.5 per cent charge cap. The rules are still being debated but the FSA has taken the unusual step of putting my letter on the web.”


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