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Split Capital
Split Capital
Precipice Bonds
Standard Life		  

Did someone
'split'
With your money?

 

  

Split Capital trusts started life as the humble 'Zero', nice low risk stuff, even the FSA said so until 2002! Then higher 'gearing' was introduced, this meant that the trusts borrowed more to support their performance. he manufacturers didn't understand how this affected the risk!!

What was the problem?
Interest rates were plummeting, everyone wanted more 'income' from their investments, just like 'Precipice Bonds' the magical income was too good to be true. Let's list the issues:

Low interest rates.
People greedy for income.
Misrepresentation of risk.
Hysteria wiped out the face value.

What can you do?
It depends on all sorts of things:

Who sold it to you.
How you bought it..
The manufacturers.
The documentation.

We have actuaries and lawyers poring over provider literature, they know what they are looking for.

  

Why did they fail?
Where do we start?
 

Why did FSA fail
They didn't know what they were looking for. They don't have the necessary experience to regulate properly.
 
 

 
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