Commenting on F&C’s decision to levy a new annual charge on investors in its equity-based Child Trust Fund (‘CTF’), Gina Miller founder of the True and Fair Campaign said:
This is another example of the UK investment management industry acting in a shamelessly anti-consumer and opaque manner. It’s totally wrong that children are locked into expensive and poorly performing funds and that the only alternative is to switch to another CTF provider, which may face the same problems.
“One of the overriding principles of the FSA is supposed to be ‘treating customers fairly’. Surely, this is a perfect opportunity for the new FCA to rule that there is a default index or tracker product that customers can switch into, and that this cost is borne by existing providers?
“This is a major embarrassment for our industry and there should be immediate steps by policy makers and regulators to remedy the situation before we lose another generation of investors. Failure to do so will be acting against the consumer interest and will further undermine trust in the financial services industry.
“The Government needs to undo its policy and the FSA/FCA should make providers who are not able to deliver on their commitment return the money to investors or set up a structure for all the orphan money to be managed effectively and cost efficiently.”
The True and Fair Campaign (www.trueandfaircampaign.com) continues to call for all fund fees and costs to be disclosed, with 100% of the costs reported through a single number, via a common format used across the fund management industry. That way, savers will be able to genuinely compare performance and charges between different funds.
Gina Miller has children who have CTFs, and believes that children should not be subject to higher-level fund charges for CTF funds.
Posted By: True and Fair, 4:57 pm