Opinion  

Safer route for non-advised investors?

Kevin Moss

I am writing in response to the story where Danny Cox said that people going down the non-advised route would have been less likely to be drawn into the Arch Cru disaster (FTAdviser, Arch Cru proves advice is not always the answer: Hargreaves, 30 December).

Would it be a safer route because fewer investors would have purchased dogs such as the Arch Cru funds? I do find this a somewhat misleading line of argument, based on the reasons given in the article. First, companies such as Arch Cru targeted the intermediary advice market to promote its products, rather than DIY platforms, so it is therefore logical that the exposure to the problem would be higher in that sector.

Second, the following line of reasoning simply will not work: “That’s why non-advised services like HL’s work hard to ensure investors have the right information and risk warnings before decisions are made.” The misleading information supplied to advisers, upon which they relied as the basis for their advice is, presumably, the same misleading information that the DIY platforms have access to. All of us “work hard” to obtain the “right information” and I suspect in practice that, in this particular context, the non-advised investor would find himself in exactly the same boat for exactly the same reasons.

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So long as investment providers are able to issue opaque and misleading information which only loosely reflects reality, then there are no grounds for purveyors of the non-advised model to crow.

Kevin Moss

Director

ValidPath

Cardiff

South Glamorgan