It's become increasingly evident that highly-processed, high-sugar foods are simply bad for us.  A stroll down the aisles in Asda when the place is not jammed with bodies and you can actually see what's on the shelves, very quickly reveals just how much garbage there is, masquerading as something which the manufacturers euphemistically call 'food'. 

Of course, a lot of it is far from being that.  It's Type 2 Diabetes in a bowl.  It's Instant Obesity for our kids.  It's the beginning of a lifetime of poor dietary habits.

Sometimes, you wish that someone (the FSA/Food Standards Agency?) would just place a blanket ban on the products which feed this kind of substance abuse.  Open a box of this stuff, and you might as well post off an advance request for an insulin injector.  Perhaps manufacturers should include the paperwork in the box?

Well, it looks like the FCA has actually done something a bit like that.  

I may live in a strangely enclosed little bubble, but I had never heard of 'CoCos', or, to give them their full name, Contingent Convertible Instruments.  You can read more about them by clicking here, but suffice it to say that these are regarded as risky and highly complex products, entirely unsuitable to 'ordinary' retail investors.  You can bet your bottom dollar that there would have been some clever-clogs out there who were planning to do just that - you know, a bit like UCIS, or Credit-Swaps, and all those other horribly over-engineered investment schemes, advanced incarnations of the Art of Financial Obfuscation.

And, for me, here's the great thing.  The FCA has announced its ban before some bright spark of an intermediary woke up one morning and thought that it would be a jolly good wheeze to sell this stuff to unemployed Miners in Merthyr Tydfil, or something similar.  How brilliant is that?  Long before anybody got suckered into buying some unregulated tourist property investment, built on foundations of composting brochures for failed CoCos, even the mere temptation has been removed from the marketplace.

I'm not suggesting that any ValidPathers would have bought the idea - they're all far too bright for that!  But, we'd have all ended up paying for it, through our FSCS levies, and our PII premiums, and additional FCA product reviews, and the general level of non-specific market angst that we carry with us every day of our professional lives.

Every self-respecting IFA and financial-planner should send up a prayer of thanks to the Almighty that the FCA have banned the things.  Our world would be a much better place if they'd started this habit a few years back.

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Investment Fund Due-Diligence (July/Aug 2014 Updates)

Kevin Moss, 05/08/2014