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FSA sees synthetic ETFs as an emerging risk area
By Wilfred Ling, The IFA on Duty  •  March 24, 2012
Written by Wilfred Ling    Saturday, 24 March 2012

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. ...

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By Wilfred Ling, The IFA on Duty
Wilfred Ling is a Chartered Financial Consultant with Promiseland Independent Pte Ltd. He is a fee-based financial planner by profession.
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