Investment trusts 4 all?

I do sometimes wonder just what the FSA knows about investments! Investment trusts are often recommended to clients, but only if they fit the clients' risk profile. I am concerned that the FSA thinks by bringing in the RDR scheme IFAs will recommend ITs more. That is just not the case! If an IFA advises a client to use an Invetsment Trust and it loses a lot of value will the client be able to complain the advice was not appropriate? If so, why should an IFA risk this kind of action which the FSA feels can be made against an IFA for life!? Get real FSA and talk to IFAs who can let you in on what is right in our marketplace.

Posted by: Derek Vivian

Another scandal in the making?

What short memories this regulator has. How long it is since the organised a miss selling review in respect of split capital investment trusts? Only a few years after the personal finance press had been calling split caps the “best kept secret in personal finance”!

Posted by: Ian McKenna

Ignorance is bliss

Yet again I’m afraid the FSA demonstrates its woeful ignorance of ‘on the ground’ matters. Investment trusts are often recommended, but to achieve parity with unit trusts (or OEICS) the Investment Trust industry has a long way to go as far as admin is concerned. Some of the administrators (trustees) are a nightmare to deal with. E.g. The Halifax, Capita and Lloyds. Access also needs to be easier. That is of course when buying directly. I guess it would all be a lot easier if those awful platforms that the Regulator wishes to disrupt were to offer them.

Posted by: Harry Katz

Consideration

Agree with the previous comments. It does appear that the FSA don't quite get it! All efforts seem to be concentrating on CHEAP investments, i.e. ETFs and ITs - no regard for how these actually work! Yes we will "consider" both (as we do now), but unless there are drastic changes to both, my personal view is unlikely to change: ETFs (considered) - cheap (good) passive (not so good) counterparty (bad) - result: unlikly to be suitable (why have counterparty risk in a passive?) ITs (considered) - cheap (good) price doesn't reflect NAV (bad) volatility down to both market prices AND sentiment re IT itself - result: unlikely to be suitable (why buy something with potentially increased volatility?) There we go - both considered,both rejected... simples!

Posted by: You must be joking