Cavalier govt is not looking to the future
Regarding your article ‘Industry cautious about PM’s 95 per cent mortgage plans’ (Oct 5).
I am really wondering about this government’s accounting skills.
Our national debt, at more than £2tn, is now higher than our GDP.
Then we have the scheduled expenditure for HS2, predicted to be well in excess of £73bn. And then we have the wind turbines.
Boris Johnson wants to commit £50bn to build one wind generator every weekday for 10 years.
Furthermore we have the unknown costs of Brexit and how much more will be needed to further combat Covid-19.
And now he wants the government to stand as a guarantor for 95 per cent mortgages. I shudder to think what this will cost.
Then further into the future we will have a pretty hefty slug of student debt, which won’t be repaid and will fall onto the exchequer.
I have left out all the other large items of expenditure. Of course we will need at least two new atomic power stations once the government stops prevaricating. These cost in the region of £20bn each.
The numbers are mind numbing and this government is just spraying money around with little or no thought to the future.
Heaven knows what our tax burden will be like in three or four years’ time and what inflation will look like.
But then it seems likely that this won’t be the current government’s problem – so no wonder they are cavalier.
Harry Katz
HA7 Consulting
Advice solution
Following you article ‘Advice “marketplace” solution pitched to FCA’ (Oct 8).
This is a good idea. Most people don’t need ongoing advice, which would involve paying an annual fee.
Nice annuity income for the adviser but often not needed by the investor.
I am a finance professional, having spent my career in asset management and so manage my own self-invested personal pension, and I work on this basis.
For example, pensions are of Byzantine complexity and I am not a pensions expert up to date with the latest twist invented by whichever chancellor happens to be in post.
So when I want to make a small change I consult someone I know to be really expert and I’m happy to pay a couple of hundred quid for advice that is going to prevent me falling into some arcane tax trap.
If more people who had been offered buyouts from defined benefit schemes had simply given their age, state of health and basic details of the DB scheme they were in, most of them would have been told ‘don’t take the actuaries’ shilling: stick where you are’.
Name and address supplied
Crypto ban
Regarding your article ‘FCA bans crypto derivatives to save investors £53m a year’ (Oct 6).
The real crypto risk is not just to consumers.
While the £53m saved by retail consumers from the recent Financial Conduct Authority ban on crypto-derivatives is sure to draw headlines, the true potential of cryptocurrencies never lay with consumers in the first place.
Beyond the eye-watering price of Bitcoin or the amusing trading of DogeCoin, central banks are reviewing the potential of stablecoins to upend the regulatory system.
Indeed, considering only a few months ago the FCA launched a consultation proposing that cryptoasset promotion should be regulated, the watchdog’s weathervane is clearly set and the wind is blowing firmly in one direction.
From the threat that Libra may attract and hold so much capital as to equal the central banks, to the potential that internal stablecoins could make central reserves obsolete – expect the big cryptocurrency waves to come from the large financial institutions, rather than legions of retail investors.
Claude Brown
Reed Smith
Understanding the problem
Regarding your article ‘Is the FCA shifting its position on fees?’ (Oct 2).
Reading the annual report from the Financial Services Compensation Scheme, I was able to glean very little information on the type of companies who are the “polluters” before I fell asleep.
I read that 137 financial services companies failed last year, and the FSCS helped more than 250,000 customers recover money. London Capital & Finance has been one of the most significant cases with more than 7,000 complaints – but this raises questions around how it could issue and market bonds without being authorised by the FCA.
There were also six credit unions that failed, leading to a further £5m loss, and of course Sipp providers who invested clients into their own high-risk investments or worse still, their personal holiday fund.
The majority of IFAs use platforms and mainstream providers to invest client’s money, rather than trying to invest the funds themselves.
Generally, if the IFA fails, the client would not lose money.
There are two types of people giving advice: those that have their client’s best interests at heart, and the polluters who try and make as much money as possible.
These firms rarely operate by investing client’s money into mainstream funds, so perhaps that is the issue?
For IFAs to be able to make suggestions, we need to better understand which firms were responsible for these losses and how the loss came about.
Jason Ball
Integrated Investments
