Money Marketing
11 September 2002

A consumer's view

12 Sep 2002

Benefits consultant Mercer has put the cat among the pigeons by spelling out two unpalatable truths which will upset many in the pension industry as well as the Government. The ABI has been promoting its members´ interests, pushing hard for an increase in the 1 per cent charge cap on stakeholder pensions. The argument is that a 1 per cent maximum does not provide enough for salespeople and other intermediaries to be remunerated to give advice. Not so, says Mercer partner Dick ...

ABI warning on NHS costs

13 Sep 2002

The Department of Health’s proposals to recover costs for the NHS in personal injury cases will add significantly to the costs of employers’ liability insurance, warns the ABI.

Aegon axing up to 600 staff as it buys IFAs

12 Sep 2002

Aegon UK is shedding around 600 of its staff in proportion to the number of IFAs it buys. It has already added 400 people following its deals for IFAs Momentum, Advisory & Brokerage Services and half of Wentworth Rose. Jobs will go at Aegon UK's and Scottish Equitable's headquarters in Edinburgh and Lytham St Annes for every IFA bought, so overall the firm's job tally will stay steady. The company says it hopes that most job losses will be voluntary or natural ...

Arrows off target for Rothschild

12 Sep 2002

Rothschild's decision to put its retail and institutional asset management arms up for sale has come as no surprise to an industry struggling to survive the worst bear market for decades. The fact that a business with £13bn under management is up for grabs has come as yet further evidence of how bad things have become, after the investment arm of Royal & Sun Alliance was sold off and Jupiter was put up for sale by Commerzbank and then taken off the market after failing ...

Baring gifts

12 Sep 2002

Baring Asset Management is holding a series of global investment seminars across the UK and Ireland. The seminars will feature presentations by some of the leading fund managers at BAM on the prospects for key global markets, including fixed income, emerging markets, the UK and Asia. The series will culminate with the flagship BAM global investment seminar and lunch on September 19 in London, when chief investment officer Michael Hughes will provide an introduction and round-up. Errol ...

Brain loan data guarantee will ease advisers' redress burden

12 Sep 2002

Mortgage Brain is set to guarantee the accuracy of product information on its sourcing system by the end of the year, shifting the responsibility away from intermediaries, according to industry sources. Brokers understand that Mortgage Brain is working on Project Trafficlight in a bid to become the first online sourcing service to take the burden of redress from the broker if mortgage information changes and a client is given the wrong details. One industry source says he is "totally ...

Britannic blames cross-sell failure for stakeholder exit

12 Sep 2002

Britannic Assurance claims that its failure to cross-sell products to stakeholder policyholders has forced it to pull out of stakeholder, even though it has a 5 per cent share of the market. It is ending its stakeholder project and axing 200 jobs after a 35 per cent fall in profits to £52m in the first half of this year from £80m last year. The company said its main problem was the failure of the worksite marketing project which operated alongside stakeholder, which it ...

C&G cuts rates

17 Sep 2002

Cheltenham & Gloucester is reducing the rates paid across mot of its investment rage but has held the rate on its Tracker account.

Closing bonus as online bank becomes a casualty

12 Sep 2002

Zurich Bank, the online service set up by Zurich Financial Services in January, closed to new business last week and will shut down completely in spring 2003. It claims the launch into internet banking in a joint venture with HBoS was "highly successful" but ZFS has decided to focus on its core insurance business after the group unveiled a £1.3bn loss. It says it is too early to say what will happen to the 200 jobs at the bank as existing customers will be serviced until next ...

Collins Stewart - Collins Stewart Balanced Fund

13 Sep 2002

Friday, September 13, 2002Type: OeicAim: Income and growth by investing in international bonds, equities, cash and other specialist investmentsMinimum investment: Lump sum £5,000Investment split: 100% in international bonds, equities, cash and other specialist investmentsIsa link: YesPep transfers: YesCharges: Initial 3%, annual 1.5%Commission: Initial 3%Tel: 020 7523 4575

Collins Stewart builds onshore

17 Sep 2002

Collins Stewart is aiming to establish an onshore track record with the Collins Stewart growth fund, an Oeic fund of funds.

Correspondent's week

12 Sep 2002

Last week, Money Marketing carried the front-page news that my sister Helen (Bates MD) and I have sold 33 per cent of the company to Asset Strategies and the editor wants me to talk about the run-up to the deal. We have actually been positioning ourselves for this deal for the best part of two years so it does not feel strange to no longer be the sole owners of the business we founded in 1993. We have been talking to Asset Strategies CEO Sean Ewing for about 18 months, during which ...

Days of swine and roses

12 Sep 2002

Spare a thought for the little piggies that are going to market to raise £1.6bn to save their bacon. Zurich Financial Services' promise that pigs can fly has succumbed to the laws of gravity and the company has announced the closure of its much-hammed-up banking operations with job losses of up to 4,500. Clearly, Zurich is hoping the people will not resort to their own piggy banks and instead put their money in its various insurance products. But the Diary wants to ...

Derbyshire Building Society - Derbyshire Dual Bond

17 Sep 2002

Tuesday, 17 September, 2002Type: Combined high interest account and Norwich Union portfolio bond HIGH INTEREST ACCOUNTMinimum-maximum investment: £3,000-£150,000Interest rates: 7% gross a yearTerm: One yearOffer period: Until further noticeWithdrawal penalties: No withdrawals permitted during termUNIT-LINKED BONDAim: Income or growthMinimum investment: Lump sum £7,000Fund links: Norwich ...

Don't look gift horse in mouth

12 Sep 2002

Advisers active in the inheritance tax planning market will doubtless be aware of the gift-with-reservation provisions as set out in S.102 and Schedule 20 of the Finance Act 1986. Generally speaking, if a gift is made, whether outright or via a trust, and some benefit is retained by the donor, the full value of the gifted property is deemed to still form part of the donor's estate on death. However, a recent case in the High Court has highlighted a loophole in the legislation which ...

Eurolife in legal threat to FSA

12 Sep 2002

Eurolife Assurance Company is consulting lawyers following a press release issued by the FSA detailing its investigation into the company and an out-of-court settlement. Eurolife is writing to IFAs to clarify its position, saying that all allegations by the FSA have been dropped and were only related to procedural matters. It also claims that the FSA over-reacted. EAC had been unsuccessful in a bid for its tribunal hearing to be in private and it settled before the case was heard. ...

Faith, hope and clarity

12 Sep 2002

Individual investors have had their confidence in investment markets and, by association, trust in product providers and advisers, severely tested over the last few years. As if it was not bad enough that markets have declined through three calendar years and touched five-year lows, there have also been accounting scandals and discredited product types to contend with. Sentiment is at very low levels. It is because of this that this year's Fidelity Investment Forum, which takes ...

Framlington discount deal as stars join funds

12 Sep 2002

Star fund managers George Luckraft and Nigel Thomas join Framlington this week with their new employer offering discounted Pep and Isa transfers into their funds. The managers were given permission in July by former employer ABN Amro to join Framlington months before their contracts expired. Thomas will run the UK select opportunities fund - previously the capital trust - and Luckraft will run the equity income and high-income funds, previously the extra income fund and UK bond ...

Free access to extranets

12 Sep 2002

Prudential, Norwich Union and Skandia have teamed up to offer IFAs free access to their extranets. The service is part of the Unipass individual digital certificate being developed by Origo, announced at the Advisertech conference in London last week. Origo says Unipass will revolutionise the industry by saving IFAs and providers time and money by ending the need for multiple passwords and user names and giving ease of access to the internet. Fifteen other major life companies ...

FSA's recipe is for an IFA mutual PI

12 Sep 2002

An IFA-funded mutual insurance scheme could be the answer to the PI crisis facing many advisers, according to the FSA. As the FSA looks at solutions to alleviate the problems IFAs are having with finding PI cover, head of investment firms David Kenmir says he has been informally approached with the idea of a collective pool funded and managed by IFAs rather than run by PI insurers. Kenmir says the proposal is one of many that the FSA is considering. Another idea would be for ...

Giving guide to charity tax relief

12 Sep 2002

The Giving Campaign, a charity established to encourage a culture of charitable giving in the UK, has published a free consumer guide to share giving and tax relief. The guide explains how people who are holding small amounts of shares or anyone who finds that the cost of selling their shares would be greater than their value can donate them to charity. Since April 2000, a change in regulations means that donors can claim tax relief equal to the market value of the shares on the ...

Good havens

12 Sep 2002

There was a time when it seemed that investors had it all - double-digit returns, stratospheric dotcom prices and remarkably bullish markets. Investing seemed easy and people were prepared to take enormous risks to net great returns. High-fliers ignored salaries and bonuses in favour of share options. Now the market has grounded with a bump. Equity markets have plunged. Poor-quality bond issues have led to plummeting bond fund values. Scandals such as Equitable Life, combined with ...

Hitchens Investment hires three from HSBC

16 Sep 2002

Hitchens Investment Management has recruited three senior managers from HSBC Private Clients.David Elliott and James Knowles join Hitchens, the investment management specialist, as investment directors, while Matthew Sharpe joins as an investment manager.The latest appointments come just a few months after Adam Side and Darrell Mercer were appointed from HSBC as investment directors.

IFAs take more term sales at expense of bancassurers

12 Sep 2002

IFAs increased their share of the term insurance market at the expense of bancassurers last year, according to the latest sales figures from reinsurer GE Frankona. Overall, the market for term increased by 28 per cent year on year to 1.35 million policies from 1.05 million policies in 2000. For level term, IFAs strengthened their market position from 37 per cent in 2000 to 40 per cent in 2001 while bancassurers lost 6 per cent of the market, with a drop to 29 per cent. The ...

Inside Edge

12 Sep 2002

There is a new set of social political and economic pressures facing our industry and the traditional drivers and virtues that formed the basis of providers business plans in the latter part of the 20th Century have been consigned to the history books. There is a growing consolidation of providers and intermediaries through mergers and acquisitions and this is likely to continue in the short term with or without depolarisation. Indeed, it could be argued that polarisation was an ...

Inter-Alliance appoints legal director

11 Sep 2002

Inter-Alliance has appointed Michael Burne, a former head of marketing at St James's Place, to the board as legal director. Burne worked as a solicitor in Allen and Overy's intellectual property team before joining St James's Place in 1998. He become head of legal in 2000 and more recently head of marketing, where he was responsible for strategic development..

Investment view

12 Sep 2002

There have been some very interesting and contrasting scenes to be viewed from the windows of my office over recent weeks. One of the two office blocks immediately adjacent to our London headquarters is being demolished. The other site is now at the heart of a frenzy of activity as the building that was cleared away earlier during the year is re-erected to house - according to the advertising hoarding outside - a prestigious London headquarters. The City may be experiencing tough times ...

Jupiter - Emerging European Opportunities Fund

12 Sep 2002

Thursday, 12 September 2002Type: Unit trustAim: Growth by investing in Eastern European emerging marketsMinimum investment: Lump sum £500, monthly £100Investment split: 100% in Eastern European emerging marketsIsa link: YesPep transfers: YesCharges: Initial 5.5%, annual 1.5%Special offer: 1% discount on initial charge on lump sum investmentsOffer period: Until September 16, 2002 Commission: Initial ...

Just 3% of life and pensions sold online

12 Sep 2002

Less than 3 per cent of life and pension transactions are conducted online, even though providers are predicting rapid take-up of online services by IFAs. Research from Focus Solutions, covering 60 per cent of the life and pension sector, shows that online transactions now account for only 2.8 per cent of business, yet providers' targets across the sector average take-up of 80 per cent by 2007. To monitor progress of e-commerce take-up, Focus is establishing a benchmark - Focus ...

Lessons in gaining media support

12 Sep 2002

David Barnett (Money Marketing, August 29) should take heart from the success of the campaign to curb new regulations on care homes and apply the lesson to financial services. The campaign to head off the closure of care homes through rigid application of new regulations relating to the size and amenities of rooms got widespread media support. News and TV pictures of 85-year-olds being thrown out of care homes caught the public eye and won support from Liberal Democrats while the ...

Liverpool Victoria imposes 14 per cent MVA

11 Sep 2002

Liverpool Victoria has imposed an MVA of up to 14 per cent following increased levels of withdrawals from its with-profits funds. The MVA affects single premium policies taken out between September 1998 and June 2002 where the original premium was over £10,000. It says the action was necessary to protect the fund and hope to lift the temporary measure as soon as conditions change. It was previously one of the only companies along with Standard Life not to impose an MVA.

Manor Park offers protection scale

12 Sep 2002

Guaranteed investment specialist Manor Park has established a guaranteed growth bond that is linked to the performance of the FTSE 100 index for five years.

MLP chief sacked in row over reports leaked to media

12 Sep 2002

The man heading German IFA giant MLP's exp-ansion into the UK has been sacked following rep-orts that he had passed on sensitive information to the media. MLP divisional board member in charge of international activities Dorian Simon was dismissed last Thursday. One report said the company had found evidence of Simon passing documents on his computer's hard drive to the German press but German magazine Der Spiegel quoted Simon denying these allegations. Director of life insurance ...

Mortgage Brain and Mortgage 2000 merge trading platforms

17 Sep 2002

Multi-manager options from ScotWidows Intl

12 Sep 2002

Scottish Widows International is linking with the Frank Russell Company to offer four multi-manager funds through its private portfolio bond and international investment bond. The move follows Scottish Widows' link with Russell for onshore business last year. The funds are offered in four risk profiles - cautious, balanced, progressive and opportunities - to suit different requirements. The Frank Russell Company invests funds with more than 60 fund companies, which means ...

National Counties Building Society - National Counties Fourth Issue Savings Bond

12 Sep 2002

Thursday, 12 September 2002Type: High interest accountMinimum-maximum investment: £2,500-£25,000Interest rates: Three year term - 4.55% gross a year, 4.3% gross a month, existing customer of two years or more 4.8% gross a year, 4.55% gross a month. Five year term - 4.75% gross a year, 4.5% gross a month, existing customer of two years or more 5% gross a year, 4.75% gross a monthTerm: Three or five year termOffer period: Until further ...

New building methods bring fears over value

12 Sep 2002

Huge demand for new affordable homes and a shortage of conventional building skills are adding to the drive to use non-traditional construction methods, according to research by the Council of Mortgage Lenders. The CML says although lenders are taking a positive approach to new techniques, they are concerned about whether these buildings hold their value in the long term. It sees this as an important issue as a number of commentators have identified a crucial role of prefabricated ...

Newcastle bond links to five funds

11 Sep 2002

Newcastle Building Society has created a guaranteed equity bond that is linked to the performance of five funds from different fund management groups.

Ninth life for Irish bond

12 Sep 2002

Irish Life International has introduced the secured growth bond 9, a guaranteed equity bond that is linked to the performance of the FTSE Eurotop index over a five-year term. The FTSE Eurotop Index consists of 100 of the largest companies in Europe, including Abbey National, Volkswagen and Swedish clothing retailer Hennes &Mauritz. Investors can choose to have their bond denominated in sterling or euros and can also have two capital protection options. Protecting 90 per ...

Northern Rock is adding three fixed-rate bonds

12 Sep 2002

Northern Rock has introduced three fixed-rate bonds and a combined fixed-rate and equity-linked tracker product linked to the FTSE 100. The fixed-rate bonds have the option to guarantee returns for one, two or three years on a minimum opening balance of £500. Additional deposits can be made up to a maximum of £2m. The one-year bond has a fixed rate of 4.05 per cent until October 1, 2003. The two-year bond is fixed at 4.4 per cent until October 1, 2004 while the three-year ...

NU tells clients you're on your own with shortfalls

12 Sep 2002

Norwich Union is mailing its 1.3 million mortgage endowment policyholders, telling them to make their own arrangements over shortfalls despite its much vaunted guarantee. NU is predicting that 75 per cent or 975,000 policies face shortfalls. In January 2000, it pledged to make good deficits as long as it achieved investment returns of 6 per cent. Returns have been -8 per cent and NU says it will only make up the difference on the originally predicted shortfall. It is telling policyholders ...

Our survey shows 80% of public will not Pay fees

12 Sep 2002

Eighty per cent of people are not prepared to pay fees for financial advice, according to a survey carried out for Money Marketing by market research firm Nunwood. The firm asked 1,000 people across the country if they would be prepared to pay an up-front fee for independent financial advice and, if so, how much. The results are at odds with the FSA's research in CP121, which concluded that all consumers would be prepared to at least consider paying fees. The FSA based its research ...

Pegrum leaves M&G

11 Sep 2002

M&G has lost its British Opportunities fund manager Neil Pegrum, who is understood to be moving to Insight Investment.Pegrum will be replaced by Tom Dobell, currently manager of M&G's recovery fund.

Platform and Verso combine sales teams

17 Sep 2002

Platform Home Loans and Verso have completed the first stage of a merger between the two mortgage companies.The newly combined sales team will be able to sell the complete range of mortgages on offer from both companies.From September 9, the new salesforce will be on the road under the leadership of Jeremy Duncombe, former head of sales at Platform.The new fully merged company, which has yet to be named, will be launched early next year.

Powers of persuasion

12 Sep 2002

One way to consider the Pickering report is to look at the list of recommendations it has made. The pension industry (and others) can then determine which of those recommendations it would like to see taken forward or it can try to work out which recommendations the Government will take forward. But there is another way and that is to think of it in the context of all the other work that is currently being done on pensions in particular and savings in general. This is an important ...

Property price rises plummet

12 Sep 2002

UK house price rises have fallen sharply, with an increase of just 0.2 per cent in August after a 1.9 per cent rise in July and 2.4 per cent in June, according to Halifax. Its monthly house price index shows the annual rate of price growth has fallen to 18.8 per cent from 20.8 per cent in July. Housing transactions in August remained at the June and July level of 132,000, down from 139,000 in May but 10 per cent higher than August last year at 120,000. The ratio of house prices ...

Prudential - Prudential Growth and Income Plan

11 Sep 2002

Wednesday, 11 September 2002Type: Guaranteed equity bondAim: Income or growth linked to the performance of the FTSE 100 indexMinimum investment: Lump sum £7,000Place of registration: DublinInvestment split: 100% linked to the performance of the FTSE 100 indexGuarantee: Capital returned in full provided the index does not fall by more than 25% in the last four years, or if the index does fall by more than 25% and recovers to its initial ...

Rate guarantee on B&W savings plan

11 Sep 2002

Bristol & West is launching a savings account with a lifetime guaranteed rate. The Easylife account gives an introductory rate of 4 per cent for the first six months before switching to a level no less than 1 per cent below Bank of England base rate for the rest of the life of the account. Minimum balance is £100. 

RJ Temple seeking backers

12 Sep 2002

National IFA RJ Temple is seeking investors to buy a share in the firm to fund its business expansion plans after recent management and salesforce restructuring. It has appointed KPMG to find suitable investors and plans to use the capital raised to expand its RIs by around 35 per cent from 220 to 300 by the end of 2003. It also hopes to complete a series of acquisitions and invest in back-office systems to boost efficiency and improve profitability. Temple says the process of ...

Rothschild chief executive to join Deutsche

11 Sep 2002

Rothschild Asset Management chief executive Paul Manduca will join Deutsche Asset Management in December in a move widely predicted by the industry.Manduca will become DAM's CEO for Europe after announcing last week that he did not expect to have a future role with RAM now the company was seeking a buyer or merger partner.He will replace Udo Behrenwaldt, who will become a vice-chairman and senior adviser to DAM, which is in the process of rebranding to DWS Investments.

Schroders gets diversified

17 Sep 2002

Schroders has established a multi-strategy fund of hedge funds that invests in a portfolio of between 20 and 30 hedge funds.

Service objections to post-retirement trail

12 Sep 2002

Positive Solutions' offer of trail commission for IFAs after retirement has been criticised by rivals. The firm will pay trail to a retired adviser or his beneficiaries, whether the adviser was with Positive Solutions or directly regulated and chose to join the scheme on retirement. Inter-Alliance corporate relations manager Charles Ansdell says: "Trail commission is merely one aspect of practice buyouts. The whole idea of practice buyouts is that client servicing continues. ...

SLI fund gives risk options

12 Sep 2002

Scottish Life International has set up an investment bond which it says offers investors the possibility of attractive returns for defined levels of risk. The select income & growth bond 3, available through IFAs until October 18, gives the choice of income or growth with the two risk options of opportunity and cautious. The opportunity option offers 10 per cent gross income each year for three years, or 2.4 per cent gross income per quarter, or up to 32 per cent gross growth ...

Standard Life deserves credit

12 Sep 2002

Is it not about time that the rest of the market adopted the approach of Standard Life over market value adjusters? Sensibly, they have realised that there is not a mass of people trying to cash in their investments - those who do mostly have reasons other than falling markets for doing so - and have decided therefore not to penalise the very few who do. All too often in our industry, there is a rush to impose such penalties when usually there is very little reason to do so. Rod ...

Talkback

12 Sep 2002

"Certainly. Transparency is a big issue for with-profits. I can't see any potential disadvantage for consu-mers in being honest as long as it does not frighten people and I do not think that is the intention." Amy Stockdale, Campbell Insurance Services "Yes. I think it is important to make everyone aware of the situation. People need to know what is happening in the marketplace." Colin Kent, Capitas "No. They need to comm-unicate the information to policyholders but ...

The public do not want to pay fees

12 Sep 2002

At times it feels like financial services policy can be summarised by the phrase "fees good, commission bad". The problem is that no one asked the public - or at least not very many of them. This week, research for Money Marketing by Nunwood Consulting shows four out of five people from 1,000 surveyed do not want to pay fees for advice. The modernisers argue we must move to a situation where IFAs charge a fee as a percentage of funds under management. Our view has always been ...

Three quarters of Chelsea customers to pay loans off early

16 Sep 2002

Nearly three quarters of borrowers plan to repay their loan early according to a survey from Chelsea Building Society.

Towry in loan link-up with Holdsworth

12 Sep 2002

National IFA Towry Law is setting up a specialist fee-based mortgage adviser in a joint venture with broker Holdsworth Financial Management to compete head-on with the likes of Charcol and Savills. The new London-based firm will be branded Towry Law Mortgage Services. It will absorb HFM and start trading in the middle of next month, headed by HFM managing director and former Charcol director Simon Holdsworth. Towry says the investment for the set-up is a 50-50 split. HFM will handle ...

Unifi drive to highlight union value

12 Sep 2002

Financial services union Unifi is planning to target the IFA market with a major initiative aimed at demonstrating the value of belonging to a union. Speaking to Money Marketing at the annual Trades Unions Congress conference in Blackpool this week, the 150,000-member union said it is planning a marketing campaign targeting RIs in IFA firms. Unifi says it would help IFAs with regulatory requirements and training and competence needs. Director of communications Dai Davies says ...

War fears keep investors out of the markets

12 Sep 2002

Fears over war with Iraq and job insecurity are the primary factors deterring more than a third of investors from re-entering stockmarkets, according to the AITC. Research by the AITC has found that 15 per cent of investors would be tempted back into the markets if the threat of war with Iraq were to recede while 19 per cent would feel more confident of investing if their job security improved. However, the research of 2,000 UK investors also found that 27 per cent of respondents ...

Wesleyan in deal with the BMA

16 Sep 2002

Wesleyan Assurance Society is buying Professional Affinity Group Services from the British Medical Association for an undisclosed sum. PAGS will continue to trade as British Mediacal Association Services.

Yorkshire arm to deal with non-member lending

12 Sep 2002

Yorkshire Building Society is setting up a subsidiary intermediary business next year, along the lines of Britannia's Verso division, to handle its non-member mortgage lending. The society says its team of 30 intermediary account managers, who will move to the as yet unnamed subsidiary, have identified a gap in the society's product range which concentrates on mainstream mortgages. But some in the intermediary channel, which accounts for around 60 per cent of Yorkshire's ...