Drop ‘guaranteed’ term to improve reputation

The structured investment industry could improve its reputation by pre-empting regulatory guidance and dropping the term ‘guaranteed’ from marketing materials, according to financial services consultancy, The Investment Bridge.

The call to action comes in response to the Financial Services Authority’s (FSA) recent consultation paper CP11/11 proposing the introduction of guidance on the use of terms such as ‘guaranteed’, ‘protected’ and ‘secure’.

Although ‘guaranteed’ is only used by a minority of firms in the UK, Chris Taylor, managing director of The Investment Bridge, believes that the term “lacks necessity, merit, integrity or justification”.

“Actual use of the word ‘guaranteed’ is so minimal today that I would encourage the industry, via its trade body and/or the dominant providers, to proactively and of its own accord surpass the FSA expectations by asserting that it already no longer uses the g-word and therefore proposes that the regulator reacts to this industry position by prescriptively amending its rules and guidance to make this mandatory.”

©2011 funds europe

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