IFA Ian Lowes has hit out at Peter Hargreaves for attributing the hike in this year's FSCS interim levy to structured products.
Laying the blame on structured products devalues investments which deserve to be seen as useful tools in any client portofolio, Lowes told the Hargreaves Lansdown executive director in an open letter.
"Be sceptical by all means," writes Lowes, "but to dismiss a whole investment area simply because we do not understand it is far from acceptable."
Lowes was responding to comments made by Hargreaves linking the significant increase in the FSCS levy in 2011 to structured products.
The managing director of Lowes Financial Management says he fully supports Hargreaves' stand against the FSCS rate hike and agrees the inequity needs to be addressed.
But he urges him to "stop blaming this matter on structured products".
"The collapse of Keydata was not caused by structured products, rather it was precipitated by the Secure Income Bonds and Secure Income Plans, US Life Settlement schemes, which had no underlying defined measurement and so were not structured products."
Challenging Peter Hargreaves' assertion Hargreaves Lansdown had never promoted a structured product, Lowes goes on to say independent advisers are required to have a broad knowledge across a range of subjects to satisfy client needs. By definition, this should include structured products, he says.
Lowes adds returns achieved by structured product plans maturing in 2010 show IFAs who discounted the sector out-of-hand may have better served clients by taking a more "open minded approach".
Five weeks ago, the FSCS announced it would hit the whole investment industry (including advisers and fund managers) with a record £326m interim levy five weeks ago. This was to primarily help compensate investors for the failure of Keydata.
'The biggest game changer'
Appeal moved to February 2020