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Your Shout: Letters to the editor

Financial Adviser Letters

Financial Adviser Letters

This week...

FCA too focused on box-ticking

I see the need for the Financial Services Compensation Scheme, but the increasing cost really reflects on the failure of the Financial Conduct Authority to regulate the industry properly.

The FCA seems to be more concerned with the ticking of boxes rather than actually getting to the crux of the problems.

Alan Kendrick

Oakwood Financial Services

 

Favour gone too far

I have just read an interesting article on property funds (‘Regulator questions set up of property funds’, Jan 15).

If the European regulator raises concerns about the structure of the funds, it needs to look at the risk and illiquidity warnings.

All will clearly state the asset class is illiquid and that, in times where outflows exceed inflows, the fund manager/administrator can suspend withdrawals (usually for up to six months) so all investors receive fair treatment.

To then say of retail investors: “It is not credible for ordinary investors to understand the liquidity position of funds they invest in, which are constantly changing.

“They should be entitled to redeem their investment at any time on the same basis they were promised when they bought the fund” – I’d suggest on deferred withdrawals they are getting exactly what they were promised when they bought the fund, because the warnings are clearly there.

If the ordinary investor does not understand the liquidity position, the warnings are obviously not clear enough, or the ordinary investor should perhaps not be investing in something they haven’t read the fund particulars of, or are incapable of understanding.

Although I recognise that the regulator’s job is to protect the interests of the consumer, surely by putting in writing a warning that the fund may become illiquid in certain circumstances is giving them all the information they need?

If they invest through an adviser, the adviser would also have made this perfectly clear.

If they are not through an adviser, they are responsible for their own decisions so should be reading all the product literature before they make an investment decision.

It seems regulation can move too far in favour of the consumer.

This is quite different from the dubious investments accepted by some self-invested personal pension providers on the instruction of their members, because the asset is a legitimate asset class, albeit with certain features of which the consumer should have educated themselves.

Martin Tilley

Hurley Partners

 

Misleading consumers

Regarding the FCA’s recent ‘Dear CEO’ letter to advisers (‘FCA readies for fresh crackdown on advisers’, Jan 21). May I suggest the FCA first deals with the TV advertisement that is misleading 6.5m people into thinking their pension is now sorted.

I refer to Nest. If I were to mislead my clients in such a way, I would be looking for a new job.