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A gamble that failed
Has saving into a stock market-based pension really been a waste of time? This is the central assertion in a paper by Dr Ros Altmann.
So any compensation or redress from new mis-selling cannot come from the with profits fund, but for all past misdemeanours they can still raid policyholders' cash.
The Financial Services Consumer Panel describes this as a "backward step" and says that "having uncovered unfairness, the FSA should resolve it".
Predictably, the FSA has allowed intense lobbying from the powerful insurance industry to override consumer fairness. Reading through the comments from respondents in this consultation paper illustrates how many insurance companies are still living in the dark ages.
Some argued that policyholders have no interest or rights in any inherited estate that might exist in with profits funds. Others referred to previous consultation papers without appearing to have noticed that these have been overtaken by clarifications and later statements.
So once again the dinosaurs have outwitted the FSA and consumers will be left to pick up the bill as insurers continue to raid their savings to pay mis-selling bills.
Don't let go
The fund category merry-go-round organised by the Investment Management Association has left Invesco Perpetual looking green around the gills. Its flagship income funds now languish at the bottom of the income and growth sector over the short-term, because Neil Woodford has steered clear of banking stocks.
Those tempted to engage in a bit of bashing should beware. Following previous period of underperformance Mr Woodford has gone on to outperform the market by some degree.
If anything, this illustrates how unhelpful these categories can be. I have never been convinced that they add anything to consumer enlightenment. And the decision to move the Invesco funds seems to have been prompted to some degree by the spite of rivals who are jealous of their success.
Mr Woodford might not have been fulfilling the precise criteria for an income fund but he has certainly added more to the incomes of his investors over the years than most other fund managers. I will be sticking with him no matter what category the IMA puts him in.
- Email: t.hazell@gmail.com
