If Ron Sandler, former chief executive of Lloyd's of London, knows so much about investments, perhaps he can tell us how Lloyd's of London have fared over the last 50 years with investing people's 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's have some real figures. Put up or shut up.
O'Halloran & Co,Newland, Lincoln
SRCE: Money Marketing
HDLN: Letters to the Editor
SBHD: A question of ethics
Lenders are not alone in their condemnation of certain parts of the FSA's 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's 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't 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.