For example, the increasing acceptance by European governments that equities can play a major part in providing growth in pension assets, previously dominated by a requirement to hold an overwhelming proportion of bonds. The advent of EMU has now taken this one stage further - encouraging investment outside the domestic market into foreign equities and bonds. Risk is the final topic I want to touch on today. Risk, and our attitudes to it, lie at the heart of many of the developments in investment management - risk of fraud, risk of systems failure, risk of poor performance. It has been suggested that the burden of risk has passed from the customer to the manager - perhaps explaining why so many firms are avoiding active investment management and becoming closet index trackers.
Risk is always present in investment.
The challenge is to manage it effectively, by taking risks that are appropriate to your circumstances and to your time horizon. I note your concern as expressed in the newspapers this morning over speculative behaviour in the hi tech sector. Merrill Lynch Mercury recently undertook some research with MORI to assess this - and with surprising results. One in five of those we spoke to chose a building society ahead of equities to deliver the best returns over five years. I believe we all have an enormous responsibility, and by we, I mean we the industry, you the regulators and the government to educate, particularly those leaving school, about the financial choices available.