I always admire the role of the FSA which is the UK financial regulator. If I am not wrong, they are probably the first in the world to outlaw commissions earned by financial advisers. This meant to be good because financial advisers who no longer earn commissions can recommend anything else which previously did not pay commission. Exchange Traded Funds (ETFs) are the beneficiaries of this good thing. Unfortunately, what’s happening at the ETFs space isn’t all things good.
Synthetic ETFs have become more and more common. I am always against buying synthetic ETFs. But I thought I am alone until today. It was reported that the FSA considers these products to be an ‘emerging risk’ to the UK retail investors. In fact, the FSA did some audits on firms that recommended such products and found them to have poor practice. ...