Holding a mirror to transparency

One of the supposed watchwords in financial services is transparency.

According to almost any politician, regulator or consumer advocate, there should be transparency in charges for funds, transparency in what and how IFAs are paid, transparency in any extra costs associated with a product, and in the status of an adviser.

In this week’s Money Marketing, we feature what might be described as two row stories on the subject of transparency.One is a spat between Skandia and Selestia on the subject of mirror funds and on just how much of an extra bite may or may be taken out of a fund when it is sold through a life wrapper. In this instance, quite a bit, from Selestia’s point of view, while, in essence, Skandia says its rival is not comparing like with like nor properly including costs.

The other is all about depolarisation. Influential IFA Nick Bamford is up in arms about the way that Barclays describes the way it has picked providers to sit within its multi-tie offering. The phrase which gets Bamford’s goat is “we searched the whole of market to seek out the best providers for each product”.

We can see how this raises the hackles of many IFAs who see former banks and former building societies that once offered independent advice seeking alternative offerings with some relish. They believe what they are seeing is tied financial advice dressed up to look as much as possible like independent advice.

In both instances, the row over fund costs and the row over advisers’ status we suggest the FSA applies a consumer test.

In both cases, is the consumer being informed about what is on offer with such transparency in disclosure documents and menu that they can make their own mind up?

Recommended

Survey shows public-private DB divide

More than twice as many public sector workers have access to final-salary pension schemes than people in the private sector, according to research from the Chartered Institute of Personnel and Development.

New Star to Manage Exeter Fund

New Star has bought the Exeter Financials Fund and its manager from Exeter Asset Management. It has paid Exeter to release both the fund and Nick Brind, the funds manager, from his employment contract. The board of the fund is expected to change the name of the fund, with Brind joining New Star in early […]

B&B launches new mini cash Isa today

Bradford & Bingley is today launching a new e-savings Isa with a tax-free interest rate of 5 per cent a year.With only two weeks to go before the cut-off date of April 5, B&B is encouraging investors to make the most of their tax-free allowances, but says there is still time yet.Last March saw 340,000 […]

F&C begins to stem outflows

F&C grew its operating profit by 16.4 per cent in 2004 despite a third consecutive year of net outflows that have seen the fund company lose 19bn of assets.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment