FSA to consult on lowering investment projection rates
The Financial Services Authority (FSA) is to consult on measures ensuring investors receive a realistic indication of potential future returns and charges from providers.
New rules will strengthen existing regulation, compelling providers to always use appropriate rates of return.
The regulator has made the move after discovering that providers often fail to comply with current rules, whereby they must project on three different rates, revising downwards where a product is unlikely to achieve these.
Sheila Nicoll, director of conduct policy at the FSA, says: “Investors need to be able to trust information they receive and any suggestion as to how their investment might grow in future must not be misleading.
“We are proposing lower growth rates which firms may use but we are reinforcing the fact that these are maximum levels.
“Providers and advisers need to take a long, hard look at the rates they use, taking account of the underlying assets they are dealing with.”
Will Dale Nicholls do a better job than Anthony Bolton running the Fidelity China Special Situations trust?