I’m no Gerald Ratner, thanks

George Pitcher (MW February 6) suggested I held investors responsible for the damage to their portfolios. This was not a fair reflection of my views.

I agree that the financial services industry has been damaged by short-term thinking and lack of consumer focus. However, my point was that some vendors have been at fault – not the public.

Nick Ferguson of Schroders was right when he said “greed and fear⦠are very powerful forces”. They drive markets and can cause us all to make wrong decisions, which can be very costly.

The investment industry feels compelled to make a living by throwing petrol, not water, on the fire lit by basic human greed. The history of retail fund sales is dis-spiriting in that it has a disappointing correlation with market peaks. Product launches and promotions encourage this rather than making people think about sensible diversification of risk.

I understand the temptation to do this. The contrary argument to mine is that you should always offer what the consumer wants. With financial services, however, this can only create long-term problems. This is one of the main reasons that good financial advice is so important.

The FT compared my comments with those of Gerald Ratner. This is the reverse of the case. If Threadneedle had launched a Technology Fund or a split-capital investment trust three years ago, this accusation would be correct. In fact we took a conscious decision not to promote such high-risk products.

Rest assured that I have complete faith in the product we offer: all my investments are via Threadneedle group funds. I happily consume the product we offer.

Simon Davies

Chief executive

Threadneedle Fund Management

London EC3

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