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Debate highlighted misunderstanding of with-profits

It was good to read your lively debate on with-profits (Money Marketing, April 15) but it strikes me that most of the people on the panel would not know with-profits if it jumped up and bit them on the nose although at least Prudential gave a good account of itself.

I conclude that the only reason you give Mick McAteer so much space in your columns is to elicit letters from people like myself. If the Consumers&#39 Association conducted accurate research and was truly representative of the consumer, it would do more to promote savings rather than destroy the infrastructure.

I leave your readers to judge what comes before a McFall. I can only say that, as the chairman of the Treasury select committee, having read all the evidence and noted the balance and expertise of the witnesses, his particular reference to endowment mortgages left a lot to be desired. Yet another individual who fails to understand the workings of with-profits funds.

Do the public understand? You bet they do. Those who stay the course invariably see the benefit of with-profits funds, particularly over the long term.

The continual barrage of criticism of with-profits, as the Pru&#39s Mark Wood points out, is totally disproportionate when you consider how many people have lost huge capital sums in the last few years, with not a column inch dedicated to their cause.

What you should remember is that it was Hargreaves Lansdown and Best Invest who advised clients to come out of with-profits funds (particularly those with Standard Life who did not have an MVA) halfway down the slippery slope to the bottom of the market.

Perhaps your next debate should be whether those policyholders ended up with more or less of their investment capital in March 2004 after a 50 per cent recovery in the 250 and 350 indices and upward of 30 per cent on the FTSE 100.

Needless to say, Standard Life was forced to invoke an MVA because of the outflow of funds by irresponsible advisers. IFAs? I don&#39t think so. Valid independent comment? Not in my experience. Churners? Well, that is a completely different topic. Perhaps you should have a debate on that as well.

Thank you at least for organising the debate. The report in your paper made very interesting reading, even if the two sides of the argument were rather unevenly matched.

Terence O&#39Halloran Chartered insurance practitioner, O&#39Halloran & Co, Lincoln


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