Beware pricing 'tricks' when buying Unit Trusts

cepheus

The point is, whether it was income or accumulation units, the Framlington UT was soft closed. That is the higher potential costs of purchasing these units could have been made known to me when I enquired about this fund back in July.

cepheus

After several exchanges with the ombudsman I have had no joy with this. He refuses to investigate if the spread was untypical, and he doesn't think it is the ombudsmans responsibility to control spreads of UTs anyway.

In other words managers can increase UT spreads at a whim and require no justification for it. Whilst other classes of equity can do the same at least they have to declare it in advance of the sale, with UTs you write out a blank cheque, surely that is unacceptable! UTs should be phased out completely in place of OEICS which they almost have been.

It's not only the BOE who can print their own money!