programme aimed at reducing the amount of money spent by investors on commissions paid to brokers and investment managers.

FBS managing director Mr. Joseph Taussig said in a statement the programme -- which he admitted had met with some resistance from local investors -- could improve the investment portfolios of Bermuda based companies by between 0.2 and 0.4 percent.

The programme is aimed at local companies with more than $10 million in marketable securities.

And the company claimed that there are at least 10 companies with portfolios with more than $1 billion in marketable securities.

"For each of them, the recapture could exceed $2 million a year,'' the statement said. "At the level of $10 million in assets, the recapture is still at least $20,000 per year, which means that the IRP should clearly merit consideration by any of the targeted companies.'' Mr. Taussig said the scheme had raised some concerns because it seemed similar to "soft dollaring''.

"Soft dollars are a controversial practice in the US and the UK whereby brokers rebate commissions and dealer mark-ups to investment managers, who then use the rebates to defray expenses that many people should be covered by their management fees,'' the statement said.

It said recapture programmes were devised to mollify customers who questioned the practice. The programme meant an asset-holder was able to effectively negotiate a discount based on the volume of the portfolio.

Mr. Taussig said some Bermuda-based businesses already took part in asset management programmes.

But he claimed if they joined FBS's scheme, they would benefit because it offered increased margin discounts depending on volume.

"In test marketing the programme, FBS has encountered some resistance on two fronts,'' he said. "Many of the companies are so large, that they believe that either their or their investment managers have such immense buying power that their pricing is the best possible already and how could a small Bermuda-based company like FBS deliver.'' The statement said FBS could reduce costs through its relationships with major US and UK brokers.