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Provider risk equally important as counterparty, says Barclays Wealth

Barclays Wealth director Colin Dickie says the demise of Keydata has highlighted the importance of understanding ‘provider risk’ when assessing protected investments.

Dickie says Lehman Brother’s failure centred concerns on counterparty risk but few warnings were given about provider risk.

He says Keydata’s enforced move into administration and the unravelling of its financial affairs has emphasised the need for better understanding of the roles the various associated parties play and what protection is available at each stage of the product development and marketing process.

He says: “It is a sub-optimal situation when a product’s promoter, provider, administrator and issuer are all different companies, a situation that can also be found in the fund arena. It is little wonder that some protected investments are perceived to be overly complicated.”

Dickie says the FSA recently concluded a consultation period on the regulatory status of structured products and included a number of proposals to improve the hygiene factor around the assembly of structured products.

He says: “In my view the industry should embrace any change which improves the overall transparency and therefore the reputation of products which could, and should, have a much bigger role to play in investor portfolios.”


Judge questions Government claim

The Government failed to back up its claim that the state does not pay compensation for regulatory failure at the Equitable Life judicial review last week, according to the Equitable Life Members Action Group.

Tax year-end planning for annual allowance

Last tax year-end there was a lot to think about in relation to planning. The introduction of the tapered annual allowance and the implications of moving to a fixed pension input period, the reduction in the lifetime allowance and potentially applying for protection, and the concern about changes to tax relief, to name a few. […]


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