Fund managers and their sponsors.

The latest financial scandal seems to involve a pyramid scheme, a type of fraud that is so well known it should deceive only the most naive and inexperienced, yet it seems to have deceived the fund managers of numerous institutions, not only relatively soft targets like local authorities and pension funds, but even Santander, the supposed saviour of much of the British banking system.

The poor performance of fund managers is a matter of public record. Their funds usually under perform stock market indices, so that they do worse than they would if they invested at random. Why then is so much money entrusted to them ? Part of the answer is that our government recruits many of their customers, or perhaps it would be better to say conscripts them.

Most people are required to place savings in pension funds, where, of course, someone 'manages' them. Not only does the government thus prevent people from managing that part of their savings themselves, it goes further and places obstacles in the way of any who try to manage the remainder. The principal obstacle in Capital Gains Tax. Any investment policy accumulating sufficient assets to replace a pension would incur some liabilities under the tax, and as that is based on money value not real value there could be a tax liability without there being any gain. Even when no tax is liable, it would be necessary to keep complicated records and to perform involved calculations to prove that, probably requiring employment of an accountant, whose fees would further diminish the fund saved.

Don't believe the people who say our financial ills require more regulation by government. Government regulation has long been part of the problem.