View more on these topics

Who can beat the returns on with-profits?

If Ron Sandler, former chief executive of Lloyd&#39s of London, knows so much about investments, perhaps he can tell us how Lloyd&#39s of London have fared over the last 50 years with investing people&#39s money? What sort of returns have you made for your investors, Mr Sandler?

And if Greig Middleton, a fund manager, is so critical of with-profits funds, perhaps they would be pleased to publish reports of how they have fared over the last 10, 15 and 25 years by way of returns on monthly contribution contracts for those investing in their funds?

Or perhaps some of the national brokers, such as the one we are just bailing out for £20m through the compen-sation fund, can tell us how much they made for their clients in fund management over the last 20 years?

Can any of them compare with the 10, 15 and 20-year returns recently published on with-profits funds? I doubt it.

Hey, if you have got so much to say in public about how bad a deal with-profits funds are, lads, how about putting your money where your mouth is?

While we are talking about fair deals for consumers, perhaps we can ask the Treasury how fair their deal is for the consumer when they take £3.2bn out of charities every year? What about the £44bn that went missing over 20 years from Serps funds? They reduced the benefits but what happened to the money?

Fair deals? I think you had better look to your own laurels before you start the diversionary tactics.

To cap it all, Foreign & Colonial now want to do with-profits lookalikes for Isas and Pep funds. What historical evidence have you got for the past 20 and 25 years on regular savings to justify that move?

Come on, let&#39s have some real figures. Put up or shut up.

Terence O&#39Halloran

O&#39Halloran & Co,Newland, Lincoln

DECO:

DOCB:

SRCE: Money Marketing

PDAT: 160801

SCTN: Comment

PGNO: 25

RANK:

HDLN: Letters to the Editor

SBHD: A question of ethics

BYLN:

TEXT:

Lenders are not alone in their condemnation of certain parts of the FSA&#39s impending mortgage regulations (Money Marketing, August 9).

IFAs and other mortgage intermediaries – certainly all the ones I have spoken to – are becoming equally concerned about some parts of the regulations, in particular, the pre-application illustrations which must be handed out toall mortgage applicants, with the first few paragraphs saying: “The FSA cannot tell you whether this particular mortgage (or any other mortgage) is right for you. The FSA provides useful guides on choosing a mortgage and comparative tables to help you shop around. You can get them free through the FSA website www.fsa.gov.uk/consumerhelp or by calling 0845 606 1234.”

Having spent some time with their clients and in most cases having recommended a particular mortgage product, intermediaries (and lenders) will hardly be enamoured with the duty to then effectively tell their clients to look up information elsewhere.

I am not against the FSA&#39s comparative tables per se and I agree with the sentiment of their press officer who says: “The tables will help consumers to make better informed decisions.” But then, so have the tablesin consumer magazinesover the past 10 yearsmore.

Are intermediaries also expected to hand out copies

of a magazine at the endof each client interview? The important principle at issue here is that practitioners in the marketplace are being forced by the FSA into doing some-thing that is against all normal and ethical business practice.

Lenders are expected to publicise products from rival mortgage lenders. Intermediaries are expected effectively to tell their clients to look elsewhere for information before making a commitment.

If the FSA wishes to promote the tables and their general consumer education material, fair enough, but surely they should do it themselves and not expect lenders and intermediaries to become some charitable arm of a Government organisation.

I have spoken to a number of parties, mainly lenders, who are in the process of responding to FSA consultation paper 98 on mortgage regulation.

The general comment is that for such responses to get serious consideration by the FSA, there must a reasoned argument why consumer interests would be served by any final changes to the draft regulations rather than a “I just don&#39t like it” comment.

But surely the FSA must recognise there are wider issues which should temper a solitary focus on consumer interests.

In addition to their customers, lenders and intermediaries also have responsibilities to their shareholders and their employees and all business practices have to maintain a fine balance between disparate interests.

I would be interested to hear of other views on this particular issue and any formal legal viewpoint as to why the current regulation may

conflict with other obligations incumbent on mortgage lenders and intermediaries.

Richard Griffiths

Managing director

Network Data,

Reading, Berks

richard.griffiths@network data.co.uk

Recommended

Govett launches IFA marketing drive

Govett Investments has launched an IFA marketing drive for its Govett US Opportunities Fund.It says the fund which has just reached its three year anniversary has been top quartile in each year to date. Over the period it has provided a total return of 103.5 per cent compared with the average sector return of 28.5 […]

Proportion of upheld pensions complaints down

The Pensions Ombudsman Dr Julian Farrand today publishes his report for the year ending 31 March 2001, the last of his seven year tenure ending on 31 August 2001.The report identifies continuing high productivity of over 600 cases investigated and determined in a reduced average time of under 5 months per case an unrelated drop […]

Clerical chief Walther set to retire

Clerical Medical chief executive Robert Walther is retiring before the end of theyear. He will be replaced by managing director John Edwards. Walther has been overseeing the integration of Equitable Life with the Halifax group after Edwards was made MD in February.Walther, 57, has been with Clerical since 1965 and was made chief executive in […]

Skipton Guernsey grows up

Skipton Guernsey has introduced a five-year guaranteed growth bond aimed at offshore investors.The bond is linked to the FTSE 100 index for five years and returns the original investment plus at least 26 per cent growth, even if the FTSE 100 index falls during the term. The maximum growth investors get is 50 per cent.It […]

Don’t play chicken with the Bank of Japan

By Josh Ausden, Head of Client Investment Strategy, Neptune Short-term yen strength has hurt the Neptune Japan Opportunities Fund but recent events have only added weight to our conviction that the Bank of Japan will act to ease policy, boosting multinationals’ profits and weakening the yen. In recent weeks the performance of the Japanese stockmarket […]

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