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Dickie in counterparty challenge to providers

Barclays Wealth director Colin Dickie has challenged other structured product providers to reveal the underlying counterparty rather than simply stating it is a firm rated A by an agency.

Dickie believes that the IMA was right to question structured product providers over their lack of transparency but for all the wrong reasons.

He says Barclays has been disclosing itself as the underwriter for the past couple of years and that it would help the market tackle the opacity issues that have recently damaged its reputation if other firms were to do likewise.

He says: “The rules were changed to allow groups to name their counterparty and no one has except us.”

Dickie also says that as the backdrop of Lehman’s continues to unfold for structured product providers, culpability issues are also being raised.

“With neither promoters or administrators acting as the counterparty in some cases, the question of where to turn if things go wrong also needs to be raised. Surely these are questions advisers need to know from a TCF perspective from point of sales, particularly as it appears many clients will not be eligible for compensation.

“These problems all circle around transparency and it is that curtain that needs to be lifted if the market is to continue to flourish and stop its detractors.”

As for the IMA, Dickie questions the trade body’s own motives, claiming the problem that it faces is that structured providers are moving in on business assets that have been traditionally bound for IMA member funds.

He says: “The IMA’s decision to question structured products leaves me bemused. They raised performance issues which were highly selective given that an index tracker could have performed in the timescale it provided while their own issues on trans- parency focused on charges and gives the impression that AMC is all you pay in retail funds making them wholly transparent.”

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