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Investment View

You read it here first. Last week, the Government published details of the

Individual Pension Account, mentioned in this column several weeks ago. The

possibility of such a savings animal being set loose was first mentioned at

a conference on self-invested personal pensions, to which I contributed, in

June. IPAs will replace pooled pension investments (although I am not

convinced they are the same thing at all) and take their place alongside

stakeholder next April.

The aim appears to be to replicate the success of 401(k)s in the US.

Indeed, the Treasury briefing paper says as much. Not that an IPA will be

the same as a 401(k). For a start, it would seem that only collective

investments and gilts are eligible for inclusion. It is not an Isa with tax

relief on the way in.

Having just come back from yet another AITC roadshow, this time in

Glasgow, I confess to being cheered by the fact that the investment trust

industry at least should benefit from yet another savings package into

which its products can be dropped. Yet I remain saddened at the lack of

understanding shown by members of the public over savings in general. On

this occasion, I was not haranguing a gaggle of IFAs but answering

questions from members of the public who had presumably been coaxed there

by the offer of free tea and biscuits and the opportunity to receive free


Believe me, advice is what many of them needed. I know I am preaching to

the converted when I say good advice should not be free but the public

remain reluctant to pay for someone to tell them how to organise their

financial affairs. On a phone-in programme for the Money Channel, a teacher

asked for advice on how to build her pensions and other savings to ensure

she will have an adequate income on which to retire in eight years time.

Hers was a solvable problem (not all of them are) yet there is a limit to

how precise you can be in these circumstances. After giving some general

pointers, the panel came up with the wholly sensible suggestion that she

should consult a pension IFA. What will it cost, was the immediate retort.

It was the suggestion that she would be ripped off by someone offering

financial advice that emphasises how much more has to be done to gain

public trust, despite the vastly increased professionalism of this


At least the Treasury accepts this – apparently – by referring to the

FSA&#39s new responsibility for educating consumers in their own financial

interest. “If people have a lively grasp of what their pension savings

really are,” the document says, “there will be a better prospect of people

getting decent pensions and less chance of misselling.” Well, that&#39s all

right then. Except that I have yet to be convinced that the Treasury, let

alone the Government, really understands what it is doing.

Meanwhile, the rush to look after high-net-worth individuals around the

world continues with UBS, already committed to upping its profile in the

private investor market in this country, buying retail broker Paine Webber

in the US. Just looking at the numbers is positively mouth-watering. More

than 8,500 brokers operate from nearly 400 offices, looking after literally

millions of clients with assets of close to $500bn. It is hard to imagine

that the whole of the European private investor market is worth much more

than that. But it will become most valuable. You mark my words.

Finally, with the integration of Capel Cure Sharp and Greig Middleton

moving closer, my own role in this great combined operation is undergoing

some change. Instead of being chairman of the investment strategy

committee, I find I have a new role. Does the change really mean anything?

Well, it is important to some people, so I thought I should mention that,

in future, I will be styled slightly differently.


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