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Skandia clash with Selestia over mirror funds pricing

A row has broken out between Skandia and Selestia over the pricing of Skandia’s mirror funds.

Skandia regional director David Stead has written to IFAs, claiming that Selestia salespeople have used “sensationalised” press coverage concerning an FSA review of unit-linked products to justify their wrap approach and he has contacted Selestia which he says has agreed to stop this communication.

Selestia says it sent out inf-ormation about Skandia products, including extracts from Skandia literature, and performance statistics from Financial Express comparing the pricing of mirror funds with the pricing of underlying funds. It says it will continue to communi-cate with IFAs on the issue.

Skandia chief investment officer Jim Roberts says Selestia has misunderstood the comparison between the life fund price and the external fund price of mirror funds and that there is a danger of IFAs coming to a similar misunderstanding by comparing net-taxed funds with gross-taxed funds.

Selestia marketing director Bill Vasilieff says: “In response to enquiries from IFAs about how the RIY on Skandia’s mirror funds is calculated, we have given some information. We have not agreed to stop communicating with IFAs, nor have we agreed that the information we have been providing is inaccurate. This looks like a very defensive letter to me.”

Roberts says: “The whole industry has been using the net pricing method since the early 1970s. I would have thought Bill Vasilieff would have understood this. To imply that there is something suspicious about our funds being net of capital gains tax is simply unacceptable. Furthermore, any implication that the FSA investigation into unit pricing has got anything to do with this is misleading.”Comment, p39

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