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IMA chief blasts fund firms over past performance ads

IMA chief executive Dick Saunders has sharply criticised his own industry, claiming fund companies have used past performance in advertising in a way of which “no one can be proud”.

Speaking at the Investment Management conference in London this week, Saunders said the industry had to acknowledge where it could do better.

He said: “The industry needs to be ready to behave with responsibility when it comes to advertising its products. A lot of the current focus on the use of performance data in advertising stems from past practices of which nobody in the industry can be proud. It is right that this should be regulated to provide a level playing field and I believe the great majority of the industry would endorse that.”

Saunders said the IMA has “presented strongly” to the FSA that there should be standardised terms for the use of past performance in advertising.

Only if the industry showed willingness to change would it get the Government on its side, Saunders argued, adding that mutual funds were the natural vehicles to meet Sandler&#39s requirements.

New Star marketing director Rob Page says: “It is incredible. Used sensibly and in a clear way, past performance has been and will be integral to the sale of investment products. To say it has been a terrible issue for the industry is wrong.”

Threadneedle marketing director Richard Eats says: “There have been a wide range of uses of past performance ranging from responsible to irresponsible. An agreed basis for past performance would help intermediaries.”

Camp Chipperfield Hill Murray chairman Lucian Camp says: “Mismanaging expectation is extremely dangerous. The Noughties are unlike the 90s and we have to do things differently.”

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