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TV probe slams Aberdeen and Brewin over split-caps

Aberdeen Asset Management and stockbroker Brewin Dol-phin were taken to task last week in a BBC documentary investigating the crisis in the split-capital investment trust sector.

The Money Programme&#39s The Men Who Wiped Out Billions interviewed several investors in Lincolnshire who claimed to have lost their life savings because they invested in Aberdeen split-caps on the basis of advice given by Brewin Dolphin. One investor claimed the stockbroker told her that investing in zero shares carried only minimal risk and assured capital growth while another said he lost almost £150,000 when shares were suspended in Aberdeen&#39s leveraged income trust.

The programme claimed there are over 300 similar investors in Aberdeen split-caps in the Lincoln area where Brewin has an office, around 10 times what it believes the average should be for an area with a population of 650,000.

When the stockbroker was asked for an explanation, it refused, even when presenter Michael Robinson revealed that Aberdeen&#39s preferred income trust was designed by David Thomas, Brewin Dolphin&#39s investment trust technician.

Aberdeen head of investment trusts Chris Fishwick, who resigned last week, came in for most criticism, with Robinson accusing him of sparking the trend of splits investing in other splits.

Simpsons partner Andrew Merricks says: “The situation is going to cost Aberdeen dearly but it had to have some brokers onside. They lost sight of the unthinkable – that splits could lose so much money.”

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