PIA cracks down on `broker funds'
Tuesday 18 February 1997
The PIA said that advisers who sell "broker funds" must inform clients that the extra fees levied may lead to the funds performing no better than than traditional funds operated by unit trust and life companies.
Advisers will also have to explain to potential investors in writing that there is a conflict of interest between independent advice and placing money in a broker fund.
The PIA's crackdown covers almost 300 advisers who manage pounds 2bn in funds on behalf of about 130,000 clients.
There are more than 1,300 broker funds covering a multitude of areas. They are set up by advisers, who use a life or unit trust company to act as the manager. The adviser creates the fund, picking and choosing between different assets.
Advisers receive payment for investment "expertise", while the fund management company is also paid to look after the portfolio, sometimes leading to investors paying more than twice the going rate.
Yet PIA researchers found that between January 1990 to November 1996 life funds grew by an average of 7.3 per cent compound each year. Equivalent broker funds grew by 6.1 per cent annually.
- 1 Michelle Rodriguez: Fast & Furious actor apologises after telling 'minorities' to stop taking on 'white' roles
- 2 Raif Badawi, the Saudi Arabian blogger sentenced to 1,000 lashes, may now face the death penalty
- 3 PornHub turns masturbation into energy in bid to save the planet
- 4 Robert Mugabe eats a zoo for 'obscene' 91st birthday party
- 5 The remarkable archaeological underwater discovery that could open up a new chapter in the study of European and British prehistory
New theory could prove how life began and disprove God
This is what it's like to be dead, according to a guy who died for a bit
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Ukip would cut billions from Scottish budget to fund English tax cuts
Russia's roadmap for annexing eastern Ukraine 'leaked from Vladimir Putin's office'
Ukraine crisis: Top Chinese diplomat backs Putin and says West should 'abandon zero-sum mentality'
iJobs Money & Business
£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...
£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...
£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...
£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...