industry cries out for clarification, say L&G

The findings come from Legal & General Investment's What Matters Investment Index which investigates IFAs' views of the market over the coming year.

Given the recent IMA debate around the classification of sectors, L&GI's What Matters Investment Index reveals that UK IFAs are unconvinced by the proposal to rename the active, balanced and cautious sectors.

When asked who should be responsible for providing further classification, 54% of IFAs named the FSA, (or the future combined body) while 48% suggested that investment providers were responsible.

Given the industry's response to the FSA's recent consultation paper, Assessing Suitability, surprisingly, almost a quarter of IFAs (24%) believe that they should be responsible for this classification process.

Simon Ellis, Managing Director, Legal & General Investments, said: 

"The march towards RDR, combined with most consumers being very unfamiliar with probability theory, has increased the focus on the risks associated with managed funds.  Without further clarification in this sector, it is ultimately the consumer who stands to lose out.

"Legal & General Investments believes that the views and needs of the end consumer must be sought and taken into account more thoroughly.  Ultimately, they are the ones most at risk from poor definitions, and it is the lack of clarity at consumer level that has prompted the recent IMA review."