Jeremy Leach, managing director of MPL, which has an FSA-approved subsidiary, said: “IFAs need to understand a great deal about a lot of different products.
“The product provider should share that accountability with the IFA. We should be accountable for the information we give advisers, who should then assess suitability and pass it on to clients. It must be a positive for the provider to be authorised by the IFA. There is an enormous accountability for the information we provide IFAs, much more than if we weren’t accountable to the FSA.”
Leach said that, according to MPL’s own analysis, it was the only one of six TLP providers distributing in the UK which used a regulated subsidiary.
MPL, whose funds are Cayman-domiciled, said it had recently sponsored a debate with IFAs in which participants agreed that a “‘good’ TLP fund should be sold via a UK-regulated promoter, have an investment process that uses the right actuarial analysis of the underlying policies, that invests in a diverse range of policies to control risk and maintains a diligent control on liquidity and currency risk.”
MPL did not name the rival TLP providers it alleges are promoting their funds without using a directly regulated promoter.
Russell Golledge, an IFA with Essex-based Crystal Financial Management who took part in the discussion, said: “Recommending TLP funds is a minefield as they’re classed as unregulated. Working with a provider who is working with the FSA gives us comfort in that they are digging through the legislation like we are.
“Clients demand that we do due diligence. Investors like to see that we’re not just picking up any fund, especially an unregulated fund. We look for good names behind the fund, a good accountant, actuary, auditor, etc to ensure due diligence is being done.”
