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FSA may do more harm than good

The latest FSA commandment on past performance is a ban on its use in adver-tising in all but name. Perhaps some cunning copywriter will circumvent the regulations and actually advertise what a fund manager does but most managers will resort to brand advertising.

The main thrust of the FSA&#39s proposals is that past performance cannot be used in the main text of an ad and, where it is referred to in the main text, it must be accompanied by a risk warning. This is arguably more onerous than cigarette packet health warnings. The move also outlaws the linking of past performance by a fund manager to future performance.

Like so many FSA interventions, Money Marketing sympathises with the FSA&#39s intentions because past performance has continued to be abused, even in the last limp Isa season. The regulator is grappling with an age-old regulatory dilemma, balancing the need to protect investors with the need not to stifle the market but its solution is not balanced at all.

It is sticking, almost ideologically, to the belief that past performance is no guide to future performance despite having little or no evidence to back the claim.

It is also of concern that yet another intervention appears to help the bigger players against the smaller ones, a trend that will inevitably harm competition.

It would have been infinitely better to have intervened against spurious ad claims precisely because they were spurious, perhaps by working with the Advertising Standards Authority.

These FSA proposals will stop many abuses but may also prevent fund man-agers selling what they do, so that many investors will not buy and that will not get the British public saving again.


New chairman and chief exec for BAM

Baring Asset Management has appointed David Brennan as chairman and chief executive.Brennan is chief executive of BAM&#39s investment management group and his position will be taken by Peter Wolton who was head of retail at Schroders until 2001.Wolton increased Schroders&#39 Tokyo-based asset management business to become the biggest foreign-owned adviser for pension funds in Japan.Present […]

Hartley-sas – Self-invested personal pension

Tuesday, 9 April 2002 Type: Full Sipp Minimum investment: £1 Investment choice: All Inland Revenue permitted investments Administrator: Hartley-sas Charges: Annual fee £750, property purchase fee £390 Commission: Subject to negotiation Tel: 08705 673319

Royal Liver chooses new chief executive

Royal Liver has announced it is appointing Steve Burnett as its new chief executive, replacing Brian McCaul who is retiring after 42 years with the company. Burnett is leaving rival Swiss Life, where he has been managing director since 1997. He will be the first chief executive appointed from outside Royal Liver in its 152 […]

Yorkshire says gazumping is returning

Gazumping is set to make a comeback to the UK housing market according to Yorkshire Bank.Its quarterly house buyers survey finds a buoyant market in which one in ten people are prepared to gazump to get the home they really want.Yorkshire, Cornwall and Devon are the hot spots for the ruthless practice. It also finds […]


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