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Online comments from last week

Online comment related to article: FSA set to ban Ucis promotion to retail investors

Whilst I would not advocate pre-approval as NICE does for drugs, I do think it would be better if the regulator could spot something toxic before it has had a major effect on investors.

If the regulator moved more swiftly to ban ‘toxic’ products we would all see our FSCS levies reduced.

David Trenner

There is an element to this that needs thinking about. With banks withdrawing from many elements of traditional lending – who is going to fill the gap?

I am currently consulting for a well established property developer who is constantly approached by similar developers for bridging loans. They have gained an excellent reputation for doing this and now wish to expand their activities by borrowing cash at good rates.

The High Street banks have either withdrawn from the market or take so long they might have well done so.

If we are to see growth in the market this type of investment must be allowed – how do we square the circle?

Garry Heath

This is a clear case of “if I do not understand it: Ban it

Garry, I could not have put it better, or used a better example.

There is danger in every financial investment decision. When the fixed interest bond market value drops like a stone will the FSA or its successor regulators ban fixed interest funds from other than sophisticated investors?

A perfect world does not exist. An imperfect and out of touch regulator certainly does exist – at a huge cost to everybody.

Adam Smith was right in that the markets will sort themselves out if they are left to do so.

The regulators would do well to heed his words.

Terence P. O’Halloran

As a distributor of UCIS to IFAs I cannot see what all the fuss is about. Having read the document it is consulting on a change in round terms to the regulation COBS 4.12 only to allow promotion to investors that would qualify under the old PCIS rules as sophisticated high net worth investors. … but that was always the case or should have been, the issue was only that COBS 4.12 was being misapplied (or ignored) and now it can’t at least not after this is put into practice.

Mike Mayoux

Online comments relating to article: The myth of ‘the myth of free banking’

Well done Tom – a bit of truth. I was astounded to hear that there was no such thing as a free bank account when I know full well that I have two of them, from two different banks. Who cares if the banks charge heavily when client go overdrawn without permission? Serves the clients right. Loss of interest on my account? That does not stop it being free and I can not think of anywhere else I can put my money where I can have standing orders, withdraw at a moment’s notice and as often as I like, make cheque payments and all at no charge. I reckon my bank accounts are jolly good value for money. Long may the current system continue.

Michael Wainwright

I agree completely with you Tom- I know exactly that each time I go into my overdraft it will cost me £1 per day- so I do not go into it full stop. It is only there for absolute emergencies. I realise that it can sometimes be hard to money manage, but I have everything set up with one bank and never pay any charges, and as a bonus get a (small) reward at the end of each month. It is fairly simple! People really need to start looking at themselves rather than trying to pass the blame on and making excuses.

Charlie Cooper

As a mere consumer, I too fail to see how making me pay for something that I currently receive without charge protects me from detriment.

Perhaps “Which?” should be renamed “What?”

Peter Turner

Just stop and think for one moment. In an era where many UK banks are heavily indebted [bust] and without profits being generated by the high risk investment bank activity, how on earth can retail banking ever be ‘free’?

I grant that if you don’t buy any other product and keep your cuurrent account in the black, there is no direct charge but…How many people do this, or rather how many people don’t?

Free banking is a myth, the banks expoit the data they derive from your account activity to cross sell whether in the red or black, just as Tesco does when using its reward scheme.

Nothing is free, someone always pays.

Duncan Carter

All this argument on current account fees and charges misses the main point. If anyone thinks the charges for overdrafts and insurance pays for the staff, buildings, computer systems, cash handling etc they are misinformed.

If I have £3,000 paid into my account per month and spend it all by the end, my average balance is £1,500. They can lend £1,200 to others five times over, or even invest in loan stock and still retain a safety margin. Think of the income from those loans and investments. That’s why the ex-building societies have been buying current accounts for years, and moan that people rarely switch.

If in credit, the facilities provided by a current account are free. The reason banks now are pushing for fees is because they are greedy. They have been hit in the pocket by product misselling and now want extra income to compensate.




FSA steps up probe into wealth management firms

The FSA is interviewing wealth management firms about how they are seeking to address problems with record keeping and suitability of advice as it launches a second thematic review into the wealth management sector. The regulator sent a Dear CEO letter to chief executives of wealth management firms last June. The letter highlighted “significant, widespread […]

Richard Verdin MM blog

Richard Verdin: Advisers should embrace simple product plans

Since the publication of the Sergeant Review of simple financial products I have followed the observations in the trade media with interest. Having been very much on the inside of the initiative (chairing the working group on protection and attending the steering group meetings) it is interesting to contrast the hard work and good intent […]

Standard Life axes trail commission to SJP introducer

Standard Life has terminated its agency agreement with the IFA firm which administers the legacy assets of clients moving to St James’s Place. Policy Services takes on the legacy assets and trail commission of clients moving to SJP advisers, with the firm splitting the ongoing commission with the adviser. However, Standard says it is axing […]

Colin Batchelor Legal & General

Case study: Auto-enrolment and salary sacrifice

There has been much debate about the use of salary sacrifice and its interaction with the requirements of auto enrolment. HMRC has recently clarified some of the finer detail regarding those employees who choose to opt-out. In the regulations for auto enrolment contained in the Pensions Act 2008 there is no reference to salary sacrifice; […]


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