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CTF is complaint waiting to happen

Ever since the child trust fund was announced, I have been trying to work out how my business can afford to take any profitable interest in this new product and Government benefit.

I now conclude that, irrespective of the lack of any real prospect of sufficient remuneration to make it worthwhile, this is a future misselling nightmare waiting to happen.

I am driven to this conclusion on reading a summary of the regulatory notes on this government invented product. 1) It must be predominantly an equity investment, 2) the child&#39s risk profile must be assumed to be reasonably cautious.

I can just see the complaint to the ombudsman in the future and the adjudicator&#39s response.”You were clearly told this was to be a low-risk investment, yet you recommended an equity-based product – case ruled against your firm, compensate the client”.

I suggest that as IFAs we cannot afford to accept the compliance contradictions of the child trust fund. The Treasury`s invention is a non-compliant event – and consequently a complaint waiting to happen.

Alastair Lyon

Alastair Lyon Credenda& IFA Direct

Horsell, Woking, Surrey


Dawney Day Quantum – Protected China Fund

Type: Capital-protected fund Aim: Growth linked to the performance of the FTSE/Xinhua China 25 Index Minimum investment: Lump sum £5,000-no maximum, Isa £7,0007 Investment split 100% linked to the performance of the FTSE/Xinhua China 25 Index Term: Six years Return: Up to 70% growth Guarantee: 90% of original capital returned regardless of performance of index, […]

Heed the warnings

In my last article, I started to look at some of the ways in which IFAs can learn from the various regulatory reviews and legal judgments affecting financial services. I considered first a series of recent judgments from the Financial Ombudsman Service which shed a great deal of light on the way in which single-premium […]

McGinn says only Abbey can drive wrap market

Abbey director of intermediaries Ambrose McGinn has hit out at suggestions that its wrap platform is struggling, claiming that its rivals do not have the experience and res-ources to make their propositions succeed. Dismissing the firm&#39s competitors as “pretenders”, McGinn says only Abbey has pockets deep enough – and the requisite critical mass – to […]

AMI concern over complaint plans

Treasury plans to transfer mortgage complaint handling to the Financial Ombudsman Service could leave many borrowers without protection, warns the Association of Mortgage Intermediaries. The AMI believes there is a loophole in the proposals so anyone claiming against a broker who becomes an appointed representative after N4 will not be covered by the FOS. The […]


Britain's “Forgotten Army”: The collapse in self-employed pension membership – and what to do about it

Pension scheme membership among employees has risen by more than five million in the past four years because of the policy of automatic enrolment into workplace pensions. But Britain’s army of 4.4 million self-employed people, who account for one in seven of the workforce, are not covered by automatic enrolment. Pension coverage among the self-employed […]


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