View more on these topics

FSA told the public that zeros were lower risk

The FSA told consumers on its website that zero dividend preference shares were lower risk than other shares as late as May this year.

IFAs say the FSA is accusing them of misselling split-cap investment trusts when its own website was providing misleading data.

The site&#39s consumer education section described zeros as “relatively lower risk than shares” and “lower risk than the other shares in splits”. There is no mention of cross-holdings or high levels of bank debt which affected many trusts.

The information was withdrawn when the FSA launched its investigation into split caps in May.

By then, AITC director general Daniel Godfrey had warned the industry about the “magic circle” of crossholdings, the Quilter global trust had suspended its shares and some funds were believed to be in trouble with share prices tumbling.

The Guernsey regulator warned the FSA in December 2000 about the risks of cross-holdings and repeated it in early 2001 when it said it was stepping up its focus on splits.

Michael Philips proprietor Michael Both says: “The FSA has been misleading the public to a far greater extent than any IFAs. Perhaps they should be more careful of the accusations they make against us.”

Whitechurch Securities chairman Kean Seager says: “By May 2002, you should not have been giving out statements saying zeros are lower risk. From the middle of 2001 onwards, advisers had amended the advice they were giving to investors, why did the FSA not act earlier?”

FSA spokesman Rob McIvor says: “The information on the website is not designed to tell people how to invest. We would not want to dismiss an entire class of investment based on a minority of problems. We have now amended it because people generally view zeros as high risk.”


Baillie Gifford – Childrens&#39 Savings Plan

Wednesday, 27 November 2002 Type: Investment trust savings plan Aim: Growth by investing in six Baillie Gifford investment trusts Minimum investment: Lump sum £250, monthly £30 Maximum investment: No maximum Investment split: Choice of the Scottish mortgage, monks, Mid Wynd International, Japan, Shin Nippon and Pacific horizon investment trusts Types of share: Ordinary Isa link: […]

Bradford & Bingley International – Base Rate Notice

Tuesday, 26 November 2002 Type: High interest account Minimum-maximum investment: £10,000-£1m Place of registration: Isle of Man Interest rate: £10,000-£24,999 Bank of England base rate, £25,000-£99,999 0.1% above Bank of England base rate, £100,000 and above 0.25% above Bank of England base rate Term: Until March 31, 2003 Offer period: Until further notice Withdrawal penalties: […]

Berkeley Berry Birch aiming to self-insure

Berkeley Berry Birch is seeking approval from its board to self-insure over concerns about the state of the professional indemnity market.A rule in the FSA&#39s interim prudential sourcebook states firms with a stockmarket capitalisation of more than £50m do not need to have PI insurance.The group, which has a stockmarket cap of £64m, says the […]

Double indemnity

As the PI crisis escalates, advisers are still desperately seeking cover but the FSA has suggested a possible rescue plan for those struggling to get cover on their own.Speaking to the Treasury select committee recently, FSA chairman Howard Davies said the regulator&#39s analysis of the PI situation indicated that an industrywide mutual fund might be […]

Introducing Trevor Greetham

Ryan Medlock, Investment Proposition Manager, Royal London Royal London Asset Management’s (RLAM) new head of multi-asset is officially up and running. I want to look at what expertise Trevor brings to the table and how this affects the Governed Portfolios (GPs) and Governed Retirement Income Portfolios (GRIPs). Trevor Greetham joined RLAM in April 2015 from […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm