GOVERNMENT PRICE CAP

“A COMPLEX STRUCTURE WHICH WILL POTENTIALLY HARM INVESTORS”

Responding to the Treasury’s announcement of the charge caps for new stakeholder investment products, Richard Saunders, Chief Executive of the IMA said:

“This proposal does not seem to us to have been thought through. Charging 1.5% to some retail investors and 1% to others would add to the complexity of the product for investors and to administrative costs for providers.

It is ironic that the simplest of all investment products, the investment fund, is made complex by these proposals.

It is also essential that consumers should be able to switch their investments and not get locked in to a poorly performing fund. These proposals contain clear disincentives by setting the clock back to zero when investors switch – this will work against their interests.

We will address these points in our response to the consultation. The net result runs the risk of creating a complex structure which will potentially harm investors. This simply highlights the fact that the government should not try to design financial products.”

-Ends-

For further information, please contact:  

Helen Stephenson, Communications Officer, IMA, 020 7831 0898

Out of hours contact:

Mona Patel, Head of Communications, IMA, 07834 089332 

65 Kingsway London WC2B 6TD 

Tel: +44 (0) 20 7831 0898 Fax:+44 (0) 20 7831 9975 

www.investmentuk.org 

Investment Management Association is a company limited by guarantee registered in England and Wales Registered number 4343737.  Registered office as above.