View more on these topics

Split probe shakes IFAs&#39 faith in trusts

The Treasury select committee split-cap inquiry has not only scared advisers from recommending split caps but has also weakened their confidence in the investment trust sector as a whole, according to latest research.

The annual Money Marketing/One Account State of the IFA Nation poll reveals that 80 per cent of IFAs questioned said they were now less likely to recommend splits following the crisis.

Confidence in the £50bn investment trust sector as a whole has also wavered as a result of the inquiry, with 46 per cent saying the split-cap debacle had made them less likely to recommend investment trusts in general.

The results show that despite measures from the regulator to address the splits&#39 situation through increased disclosure and transparency, the inquiry has shaken advisers&#39 views on the entire investment trust sector.

The poll asked 215 IFAs their views on the industry during January.

LibDem Treasury spokesman Lord Newby says the results indicate that IFAs will remain wary of recommending splits in the future.

Newby says: “The problem with splits were the cross-holdings, the misselling and the high gearing which need not be problems in the future or the whole investment trust sector.

“I think, while the FSA has now got a grip of the situation, John Tiner has to address the issue of informing the public, who are still largely ignorant of exactly what a split is.”

The Association of Investment Trust Companies spokeswoman Annabel Brodie-Smith says: “Obviously, the split-cap problem has had an impact on the entire sector. But it is vitally important to recognise that only about a third of splits have problems and the rest have been marked down as a result. In the future, I hope that IFAs can keep an open mind and give investment trusts the opportunity to deliver their great potential, splits are just a small part of the sector.”

Recommended

FSA is way off the mark in estimating cost of key facts

Another thumping read (all 276 pages of consultation paper 170) from the FSA will have arrived on the desks of most compliance directors across the country by now. As Money Marketing reported in its February 13 edition, the proposals look set to cost the industry £110m but I suspect I am not alone in believing […]

All wrapped up

Wrap accounts have received much publicity in recent months but there is confusion about what precisely is meant by wraps and what the customer proposition actually is.In simple terms, a wrap account is not a product or an investment in itself. Instead, it is a system for administering a portfolio of products from a number […]

Towry Law offering hybrid loan with fix and discount

Towry Law Mortgage Services is offering an exclusive hybrid mortgage combining an initial fixed rate followed by a discount.The product has a one-year fix at 3.59 per cent followed by a 1 per cent discount off the standard variable rate – giving a current rate of 4.75 per cent – for the following year.The IFA […]

Building society lending up 27%

Building society lending is continuing to grow, with gross advances up 27 per cent to £3.3bn in January from £2.1bn last January, according to the Building Societies Association.Net advances, representing total mortgage balances outstanding, grew 134 per cent to £1.3bn in January 2003 from £569m in January 2002.Approvals of loans agreed but not yet made […]

UK: mid-year review and outlook

By Mark Martin, manager of the Neptune UK Mid Cap Fund, and Scott MacLennan, manager of the Neptune UK Opportunities Fund H1 2014• Equity markets continued to show strength: despite a strong rally in 2013 driven by a market-wide re-rating, equity markets continued to generate positive returns for investors. Economic activity continued to be stimulated […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com