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No solutions meet client aspirations

There are no solutions that meet the aspirations of our customers. Just because investors want a combination of no risk to capital, a decent income and prospects for capital growth, it doesn’t meant there is a solution.

There are no anti-ageing creams that work, but there’s a whole industry to service the demand for them.

Likewise, there are no investment solutions that deliver what most investors want, but an industry has developed that manufactures purported solutions. We have funds described as “low-risk” simply because their prices have historically shown low-volatility, we have bond-based income funds for low risk investors with terrifying redemption yields and the biggest investment scandals in recent years haven’t been offering 20 per cent p.a. returns, they’ve been offering 7-8 per cent p.a. – it’s the easiest way to attract the most money.

The solution is to educate investors properly and explain that risk and reward are inextricably linked. With base rates at 0.5 per cent, investors seeking returns of 5 per cent or more need to understand the risks they’re running. Marketeers need to be reined in by companies to prevent investors having unrealistic expectations, and marketing agencies need to ensure their staff have at least a modicum of understanding of how their clients’ businesses work.

Investors are currently facing the looming “disaster” of increasing interest rates, and the effect that will have on bond values and liquidity, but I doubt any of them have the slightest idea their “low risk” corporate bond fund could soon turn into something very different.

The response to investor demand to have their cake and eat it should be to tell them that they can’t and explain why. Then explain what their options are and allow them to make an informed decision. But I somehow feel our industry will still manage to develop the next “solution” – Secure High Income Trust anyone?

Clive Moore


Question marks-confusion-puzzle

Gambling, steak and milk deliveries: The crazy questions lenders are asking borrowers

Brokers have revealed some of the oddest questions they have come across when processing applications ahead of the mortgage market review’s formal introduction today. The regulator’s focus is establishing affordability, but in the intense scrutiny of applicants’ spending some curious questions have popped up. Here we outline some of the stranger questions lenders are asking […]


Tom Kean: The tyranny of change

Despite the recent Budget revelations, which proved to be the most radical changes seen since pension simplification,  I still live in hope that one day we will all be allowed to live in peace from the tyranny of change. While a sportsman says: “The older I get, the better I was”, an IFA says: “The […]


Ex-Whitechurch MD Ian McIver joins IFA Compliance

Former Whitechurch Network managing director Ian McIver has been appointed as managing director of support firm IFA Compliance. McIver quit Whitechurch last month after its parent company On-Line Partnership Group was taken over by Russell Investments. He has also been appointed a director of adviser firm Nexus. IFA Compliance is owned by Charlie Palmer who […]


Govt urged to clarify how charge cap applies to complex legacy schemes

Pension experts are urging the Government to clarify how the automatic enrolment charge cap will apply to complex legacy charging structures. Last month, pensions minister Steve Webb confirmed a 0.75 per cent cap on default fund charges will be in place for all auto-enrolment qualifying schemes from April 2015. The cap will relate to funds […]

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Survey looks at the challenges facing businesses post auto-enrolment

A survey conducted by Johnson Fleming at the Pension & Benefits Show 2014 highlighted the key challenges faced within organisations post auto-enrolment. The results showed that communicating the changes and the value of them to staff, and receiving timely data from the payroll provider proved to still be the most challenging aspects of managing an auto-enrolment scheme.


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