Dod101 wrote:It seems to be one of those situations where the FCA would be better not to be involved because to an unsophisticated punter/investor if something has their approval then all is well. I do not know why people should be protected against themselves. It is no more complicated than the old story 'If something looks too good to be true.....' That seems to me to be the first rule of investment planning. If you make the first rule capital preservation that rules out most investments.
I slightly agree, however a working life dealing with smaller clients re their tax and accounts has led me pretty firmly to the belief that a lot of otherwise reasonably intelligent individuals are financially semi literate .
I have a brother in law with an IFA charging quite a lot of money (relative to the funds) to manage some investments yet despite his being professionally qualified to the nth degree in his own field (very impressive long list of professional qualifications) he cannot see that effectively paying this individual 1% of the asset value every year is over the long term having a fairly significant impact on his investments- he does though get a very nice investment report every six moths that he frankly does not understand.The catch is that I am strictly disbarred from offering him any investment advice.
My son is another, smart, high earning but he understands software development not investment, with him it is a slow painful process trying to subtly steer him to where he ought to go (First time house buyer ISA and pension scheme, I am getting there but only because I see him every day and can keep nagging)
The fact is the average member of the UK public does not understand very much- I recently attended a Club meeting where I failed to convince other members that the dividends companies paid did not off themselves directly link with the current market price, they continued to argue that if we bought Investment Trusts initially say yielding 4% and the share price dropped the Club's income would also drop, they in effect viewed dividends like bank interest.
The catch with boards such as these is they are a self selecting sample of individuals whose presence here in effect indicates their interest in their finances, my professional experience is that with the large majority of the UK population at large their ignorance re financial maters is staggering, and that, at the end of the day, is why these sorts of things happen.
(Next rant will be why the UK population cannot see past residential property as an investment medium)