Lautro sets out tighter rules for unit trusts
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.UNIT TRUST investors will have to be told what they might get back from their investment if they cash it in within five years, under proposals published by the Life Assurance and Unit Trust Regulatory Organisation yesterday.
The plan was attacked by the Unit Trust Association as regulatory 'overkill'.
Lautro proposes that unit trust companies quote returns after one, three and five years, assuming standard rates of growth minus the company's management expenses. These figures would be the equivalent of the early-surrender values that Lautro has ruled life insurance companies must quote to investors.
Philip Warland, director-general of the UTA, said this sort of projection was inappropriate for unit trusts. Investors were free to cash in their units at any time, unlike long-term life insurance-linked savings contracts, such as endowment policies, which were designed to run for many years, with investors incurring severe penalties for cashing in early.
Colin Hawtin, senior policy officer at Lautro, said that the Government, when demanding the overhaul of the regime for disclosure of investment expenses, had stipulated that investors be able to compare different types of product.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments