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Risk policies are not a sure bet

With regard to Graham Carver’s letter (Money Mark- eting, April 14 ) concerning risk profile and the FSA and FOS’s latest dictum, I think current policies are far too general (numbers do not mean anything) and loose (expressions mean different things to different people ).

In my experience, very few people have a unilateral risk profile. The attitude towards money spent on a lottery ticket or 5 on a horse in the Grand National is usually very different to the attitude regarding the investment of life savings.

On a realistic basis, a client could be quite speculative regarding a 100 a month contribution into an Isa while the same person would probably be ultra-cautious concerning a pension fund worth several hundred thousand pounds.

If each reason why/suit-ability letter/report set out the specific attitude of the client to the amount of money involved, then the position would be correctly documented.

The downside potential of the business should also be clearly set out in quantitative terms and the client should sign to acknowledge respon-sibility for accepting the potential risk.

Surely if the above steps are taken, full knowledge of the situation will be known and accepted by the client.

David May

David May Limited,

Dronfield, Derbyshire

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