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Split trusts may quit AITC

The AITC has been accused of unfairly distancing itself from the split-cap investment trust sector.

The backlash follows director general Daniel Godfrey&#39s speech at the AITC directors&#39 conference in London last week, where he told the splits industry to admit it had made mistakes in the past five years and said the trade body would not “act as an apologist for bad practice”.

Christows head of investment trusts Nick Greenwood says Godfrey&#39s words had come too late and appeared to be politically expedient.

Several leading fund managers warned that they may advise the boards of their split trusts to resign their membership of the trade body.

However, almost all have been unwilling to speak out against Godfrey in a week in which the FSA is conducting regulatory check-ups at all split-cap investment trust houses.

Aberdeen saw more than £100m wiped off its market cap in less than two days last week after FSA managing director John Tiner told the conference that the regulator would be carrying out a thorough investigation into the split sector.

Greenwood says: “It seems to suggest that the AITC now believes that bad practice is widespread. It would not surprise me if one or two boards resigned from the AITC but I am not sure if there will be a widespread move.”

Britannic Asset Management sales and marketing director Francis Ghiloni says: “It is fine if they want to raise concerns but they cannot distance themselves from these problems.”

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