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Small mercies Call banks to account

An elderly gentleman telephoned us asking for information on corporate bond funds. Naturally, I probed. It turned out that he had been recommended to invest in one by one of the banks. I asked how much – £56,000 plus his and his wife&#39s Isa allowances.

I thought that was an awful lot of money to be investing in one fund, let alone one type of fund. Why was he telephoning us to ask for information? Well….

But I dropped him a line with our standard text explaining fixed-interest funds, suggesting the benefits of diversification in as many ways as possible and, of course, including some discussion of structured products.

Upon phoning him a few days later to find out what he thought, I was surprised to learn that he had already made his investment before having phoned us.

“Well,” I said, “You do have 14-day cancellation rights and, if you feel uneasy about what you have done, then you certainly ought to consider exercising your right to cancel.”

“Oh,” he said, “I did raise this with the representative after the first time I talked to you but he said that if I cancelled the investment I would lose £2,000 or more.”

The question this raises in my mind is this – why is the FSA kicking the IFA sector when practices such as this on the part of the banks and building societies are so commonplace that virtually every IFA in the land could recount a similar tale?

Julian Stevens Partner, WDS Independent Financial Advisers, Kingswood, Bristol


Verity&#39s view

Four years ago, I received a telephone call from one of that small but powerful clique of people who really run the life insurance industry. He asked me to meet him at one of his favourite pubs to talk off the record about something he felt was dramatically wrong. The company where he had worked […]

The final straw for pension credibility

The Government&#39s pension reforms will lose all credibility if Cabinet ministers escape the planned £1.4m limit where a pension pot becomes liable for 60 per cent tax.Any idea that ministers&#39 and Whitehall mandarins&#39 pensions should be exempt simply because there are no funds set aside and their pensions come straight from taxpayers&#39 pockets is spurious.The […]

ScotEq ends guarantees on stand-alone cover

Scottish Equitable Protect has stopped offering guaranteed premiums on stand-alone term and critical-illness policies.The move follows the introduction of reviewable rates across its range of policies in January.Guarantees will still be available on combined term and critical-illness policies but they will face an average increase of 20 per cent, with further gradual increases predicted.Unlike other […]

EIS provides chance to invest in rising F1 star

Formula 1 racing fans can invest in the career of an up-and-coming driver, Justin Wilson, through an enterprise investment scheme. The Justin Wilson EIS was established to raise the $1.5m contribution needed by Wilson to secure his 2003 contract with the small Italian F1 team Minardi. Many drivers who move to Formula 1 bring sponsorship […]

Healthcare regulation amalgamation predicted for Gulf states

While Dubai is leading the way in terms of legislating for expat healthcare in the Gulf, Qatar, Abu Dhabi and others are watching and learning – that’s according to Jelf International’s director of international services, Doug Rice. He believes the pace of change in the Gulf states will continue and that some level of unified healthcare system will be introduced across the region.


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