Until every last investor is given an amnesty from these investments and charges the financial industry cannot claim to have cleaned itself up.
__________________________________________________________________________________
Cut down the range of funds
Could a cull of investment funds finally be on the horizon? Many of us have long felt that there are far too many investment funds.
Often they seem to have been launched to satisfy the latest fad rather than because the firm had any special expertise in a market or sector. Marketing has regularly taken precedence over investment sense.
Now Ernst & Young’s ITEM Club has suggested that asset management houses could cut down their fund ranges to improve efficiency.
Rising stock markets have helped to disguise many out-dated business models but flatter markets could force a rethink as profits are squeezed. And that would mean closing underperforming funds.
I see no problem with this. Competition is good for consumers but this market has been so saturated with funds that the only possible result can be confusion.
And if fund managers concentrate on what they are best at, it might just help their performance figures.
_________________________________________________________________________________
Disguising costs for clients
No matter how hard regulators and the industry itself tries there will always be some who attempt to buck the spirit of honesty and openness.
In its six-month review of RDR the FCA put its finger on some decidedly dodgy practices by some advisers.
Sadly it is a fact that many people struggle to understand percentages. So why are firms using them to describe charges rather than putting these in cash terms? It can only be to cause confusion and to disguise how much the client is paying.
And what of those who describe themselves as independent while only offering a limited number of providers or products? This is plainly lying – and if you cannot operate in this business openly and honestly perhaps you are in the wrong business.
As for those not clearly explaining what service their customers will receive: well let us hope this is an oversight. It should certainly be easy to rectify.
But the only conclusion to be drawn from this report is that the FCA still has some work to do.
Tony Hazell writes for the Daily Mail’s Money Mail section. He can be contacted at t.hazell@gmail.com
