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Dross that passes for knowledge

Having been spurred by the great and the good, I have added my tuppence-worth to the Sandler review. Mr Sandler feels that perhaps IFAs do not have sufficient invest-ment knowledge. There may well be justification for this.

However, I hope he also looks at some of the dross that we have to contend with which sometimes emanates from investment houses and insurance companies. They have at their disposal almost limitless resources but nevertheless come out with statements such as “Given the strong performance in quarter four 1999, some consolidation is expected but the FTSE should hit 10,000 before any sustained bear phase.”

This was distributed in early 2000 and was from a director of UK equities. Also, in early 2000, you get a statement asserting that “a total return of 9.5 per cent per annum based on strong economic growth driving corporate profits” is expected. If that is not enough, we get a pronouncement this August that “buyers are still out on strike, which is generally a good time to be getting into the market”. Obviously, no one is infallible. This is just meant to show that those with the greatest expertise can make just as big a “town halls” of matters than the uninitiated. Indeed, I would refer Mr Sandler to an experiment made several years ago with a chimpanzee, a pin and the FT.

What is the correlation between expertise and invest-ment success? I am sure there is one but I wonder how high it is? Isn&#39t it important to ensure that people keep investing? After all, the Government seems to think tracker funds are the place to be.

I pity those poor individuals that took this option over the last few years although now might well be the time to revisit that particular subject. Does Mr Sandler really think that further arcane syllabuses set by the CII (who appear to have difficulty balancing their own books) is going to change the environ-ment significantly? Stock-brokers have to take the SFA exams and we all know that if you wish to make a small fortune with a stockbroker, you have to start with a large one.

Harry Katz

Norwest Consultants

Edgware, Middlesex

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