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Fund industry digs in heels on disclosure

Investment professionals are backing IMA resistance to disclosing both reductions in yield and total expense ratios in literature.

The IMA has criticised FSA moves to require disclosure of both figures, which it claims will cause unnecessary duplication and confusion.

It says RIYs are a potentially misleading measure of the costs associated with funds and TERs are a simpler and more transparent means to express costs.

Artemis product and communications director Nick Wells says fund management companies retain very little at the front end these days, with discount brokers and supermarkets refunding many of the charges to investors.

He argues that since charges have changed, the way that charges are measured should also change.

Wells says TERS are simpler to understand and operate in the spirit of regulation, as they are a more transparent measure that does not assume a rising stockmarket.

FSA spokesman Robin Gordon-Walker points to consumer research showing that 93 per cent of potential customers find RIYs to be useful, with 78 per cent finding them very useful.

IFA Mark Scott director Mark Scott says: “I personally think the TER is more appropriate. It is a bit excessive to require the use of RIYs as well and it amounts to more work for the investment firms. I am not sure that it actually achieves anything for the general public.”


Demand for FSA to suspend endowment misselling cases

IFA Defence Union chief Evan Owen is calling on the FSA and Financial Ombudsman Service to suspend all endowment misselling cases against IFAs until the confusion caused by Lautro projections is resolved.

A consumer’s view – Lorna Bourke

With the election out of the way, we can concentrate on the issue which dare not speak its name – pensions. Labour refused to be drawn on its intentions during the pre-election period but the subject is now the biggest and most pressing issue that the Government faces.

Man Investments diversifies opportunities

Man Investments has expanded its Man Global Strategies structured product range with the introduction of the MGS diversified opportunities fund.


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