Money Marketing
15 May 2002

59% of investment IFAs to stay independent

16 May 2002

Most investment IFAs will stay independent if CP121 is adopted as drawn, according to res-earch by Credit Suisse Asset Management The research found that 59 per cent will remain IFAs although one-third of investment advisers are undecided. IFAs were split on the issue of provider investment, with 70 per cent at least considering selling stakes to providers while 30 per cent want to retain their independence at any price. Adviser firms intending to multi-tie to a small number ...

Abbey National launches fund supermarket

21 May 2002

Abbey National has become the first high street bank to launch its own funds supermarket. It will be called FundsCentre and will carry 280 funds. Abbey National says the move is part of a strategy to boost its wealth management and savings business. It says it will demonstrate how a main high street name can successfully distribute other companies’ funds. It is also designed to take advantage of its existing 15.3m customer base.

Aifa warning on loan introducers

15 May 2002

Aifa is warning against too wide a definition of introducers in its response to the Treasury consultation on the regulation of mortgages. Aifa has raised concerns that some firms will want to become appointed representatives for a small amount of mortgage introductions and referrals, but will be unable to do so because they are authorised for another activity.  

Annuity bill finally runs out as time after three victories

16 May 2002

The Private Member's Bill looking to reform the annuity regime has had its last airing, as the House of Commons ran out of time before the bill had its second reading last week. The Annuity Reform Bill, which was sponsored by Conservative MP David Curry, has been a thorn in the side of the Government since it was published last December. It is now set to die when the House of Commons rises for the summer. While it was unlikely ever to become law, the Government has been ...

Bridging the gap

16 May 2002

The Diary is a mature organ that would never let petty rivalries or jealousy colour its thinking or coverage. As a Spurs fan, the Diary, of course, extends double congratulations to the nation's Gooners such as Mark Tierney, PR for Fishburn Hedges, corporate slogan - a strange combination of the sensible and creative (eh?). Tierney is a bit of a daredevil soul who has been known to attend the stadium of the third team in the capital, Stamford Bridge, on, we think a corporate ...

Britannia adds to bond flood

15 May 2002

Britannia Building Society has added to the current flood of guaranteed equity bonds with its 5-year guaranteed capital equity bond.

Britannial International - The Deferred Interest Account

21 May 2002

Tuesday, 21 May 2002 Type: Offshore high interest accountAim: IncomeMinimum investment: Lump sum £25,000Place of registration: Isle of ManYield: 4.75% gross a yearIsa link: NoCharges: NoneCommission: NoneTel: 01624 681100

Call for cash to start up free advice service

16 May 2002

Chairman of the FSA consumer panel Colin Brown is calling on the Treasury and the financial services industry to fund a generic advice service for all consumers. Speaking at last week's conference, Brown said a free hol-istic healthcheck should be available to improve consumer understanding of finance. He said money is needed to establish the service to tackle the problem of people not shopping around before making investment decisions and to help "consumers operate their side ...

Correspondent's week

16 May 2002

Writing Correspondent's Week after just five days in my new job is surely a poisoned chalice. Other former Money Marketing colleagues - who by tradition have been lumbered with the same task - have invariably managed to swiftly annihilate any good reputation that they had built up in their first week, and replace it with their first disillusioned glare from their new boss. Most recently, one former Money Marketing hack was reprimanded by their company's events division for ...

Dennehy Weller names "dud" investments

20 May 2002

EOC slams low annuity rates for women

16 May 2002

The Equal Opportunities Commission has entered the pension fray, saying that women will be put off saving for retirement because of the lower rates they face when buying an annuity. The warning comes as the Liberal Democrats start a campaign calling on the Government to conduct an inquiry into the "injustice that female pensioners suffer" at the hands of the pension system. The LibDems say women who opted to pay the lower married women's National Insurance rate are facing basic ...

Face the fee-based challenge

16 May 2002

Whatever shape the eventual changes to our industry take in the wake of the FSA's polarisation review, what is inevitable is that our world as we know it is going to change. Any sensible business entrepreneur must exercise leadership in charting a course through the uncertain waters ahead. We can no longer simply manage our businesses, we must now accept the challenge of defining our future strategies and informing our staff, colleagues and clients of what we are planning and why. Michael ...

Fear of multi-tie migration

16 May 2002

IFA Promotion considers the CP121 proposals will disadvantage consumers because they fail to distinguish between different sorts of authorised financial adviser and will result in some IFAs going multi-tied. In its response to CP121, IFAP warns that the proposals contain no distinction between distributors advising on the whole market and multi-tied distributors. It believes that multi-tie agreements will weaken firms' ability to react to poor service or declining competitiveness. It ...

Fixed rate options from Britannic Money

20 May 2002

Britannic Money is launching two new fixed rate buy to let products with flexible features.

Free annuity exchange to offer real-time rates

16 May 2002

IFAs are to get access to a free annuity exchange providing real-time guaranteed rates from the whole industry and allowing open market annuities to be bought online. The industrywide online exchange will provide IFAs with guaranteed quotations for conventional annuities, enhanced annuities for those who require individual underwriting as well as withprofits and investment-linked annuities. The top three rates for conventional and enhanced annuities will be given on a live and ...

FSA foresees fallout in adviser numbers

16 May 2002

It is unlikely that lenders will be forced to offer borrowers advice when taking out a mortgage, according to FSA director of high-street firms Sarah Wilson. Questioned by Council of Mortgage Lenders director general Michael Coogan at last week's Building Societies Association conference in Bournemouth, Wilson also quashed concerns over the impact of regulation on small lenders. She said: "There is no reason to believe regulation will have an impact on the number of lenders." But ...

FSA invites IFAs to interviews on CP121

16 May 2002

The FSA has asked IFAs to come in for face-to-face interviews to gauge attitudes towards how their businesses will look following depolarisation. The interviews will be conducted by research group Nera and will look to establish an idea of how many advisers will go fee-based and how many will look to become distributor firms. The exercise forms part of the cost-benefit analysis that the FSA pledged to conduct before it proceeds with its CP121 depolarisation proposals. A spokeswoman ...

FSA paper points to misselling of splits

16 May 2002

The FSA is issuing a paper this week in which it will state for the first time that there has been some evidence of misselling of splitcap investment trusts. The Feedback paper will say the FSA believes there has been misselling of the trusts although it will say it has not been as widespread as some have alleged. It comes in response to the discussion paper published last December and will outline the issues for further investigation by the regulator. In addition to looking ...

FSA warns Treasury on buy-to-let market risks

16 May 2002

The FSA is concerned about risks to investors in the buyto-let market, adding to pressure on the Treasury to regulate the sector. At last week's Building Societies' Association conference, FSA director of high-street firms Sarah Wilson said the FSA has warned the Treasury about potential problems in the sector. She said "people are tempted by low inflation and high ret-urns and forget about the risks". Top brokers believe the sector should be regulated like residential mortgages ...

Gledhill poached by New Star

17 May 2002

New Star has appointed James Gledhill from Morley Fund Management to help build up its retail corporate bond business.Gledhill will work alongside former M&G colleague Theo Zemek, who joins New Star in November, to launch the fund manager's first fixed income fund.He currently runs institutional funds for Morley - a position he assumed in January 2002 - and will join New Star in August.

Hargreaves Lansdown to offer its own simple Sipp in supermart

16 May 2002

Hargreaves Lansdown is to offer its own simplified self-invested personal pension using its Vantage fund supermarket platform. The firm claims the Sipp will not fall foul of the better than best rules and says it is aimed at a new market rather than competing with specialist providers such as James Hay. Managing director Peter Hargreaves says the launch is a sign of the increasing strength of intermediaries who are going from being corner shops to becoming supermarkets. The ...

IFAs may yet survive after the meddlers have gone

16 May 2002

I have yet to experience the regulator dealing with me in a straightforward, honest fashion although it lays these requirements down as its expectations of my behaviour. So for a short while I was bemused by CP121. I had believed that the IFA would always be left alone. I have long been convinced that because the IFA is the weakest in terms of assets in the life and investment spectrum, that his future was vital to the politicians to blame for any of their shortcomings. The ...

IMA and NAPF set up a new code for fund firms

16 May 2002

The IMA and the National Association of Pension Funds have set up a new code of practice for disclosing pension fund costs to improve transparency in response to recommendations by the Myners report. The code, launched last week ahead of the NAPF's annual conference in Brighton, has been designed to help pension fund trustees understand the charges and costs levied on pension fund assets and make it easier to discuss them with fund managers. Fund managers will now have to disclose ...

Independent view

16 May 2002

Yet again we are being bombarded with media articles on the pension crisis, triggered largely by the recent actions of defined-benefit schemes. Is such a negative portrayal of the situation damaging or does it provide a glimmer of hope in the wider context of the pension savings gap? The primary cause of the pension savings gap, it could be argued, is very simple - people are living longer and accordingly spending increased time in retirement. This needs to be paid for but by whom? Traditional

Inter-Alliance is fastest growing firm

15 May 2002

Inter-Alliance has been named the fastest growing company in the UK in the Deloitte & Touche/Independent 100 table of growth companies. The award was given for Inter-Alliance's 72 per cent increase in turnover to £45m in 2001 from £26m in 2000. Inter-Alliance tops the list of the 100 fastest growing independent public companies in the UK, prepared from research carried out by Warwick Business School. 

International strategy

16 May 2002

My client is a highly-paid international lawyer who has been asked to spend a period of time (probably up to five years) on an overseas secondment. He is 45 and has been working for the past 20 years for a big City firm. He has a personal pension plan with a current fund value of £450,000 and a portfolio of various unit trusts, Peps and Isas worth another £175,000, which he has accumulated over the years in a haphazard manner. Both these fund values have fallen significantly ...

Is the end nigh for defined payment?

16 May 2002

It appears that the FSA may finally be paying attention to the industry's collective criticism of its defined-payment system for IFAs outlined in CP121. At the recent annual LIA conference, FSA managing director John Tiner referred to the big number of alternative proposals put forward by the industry in its responses to CP121. He said that while the FSA had put forward the DP concept as a means of tackling commission bias, it was examining it to see if it was practical to implement ...

Kelly welcomes endowment ruling

15 May 2002

Treasury economic secretary Ruth Kelly has welcomed the FSA's ruling introduced in September which forces life offices to tell endowment policyholders all of the options available to them when surrendering a policy.

L&G launches IFA kit for populating stakeholder

20 May 2002

Legal & General has launched a new tool-kit to help IFAs populate and manage stakeholder and group personal pension schemes. The kit contains a range of targeted literature for the IFA to use with employers and a guide to help explain the benefit of joining the scheme to staff. It also has a scheme management disk for employers, which covers announcement letters, regular reviews and dealing with scheme leavers and joiners.

Lower tier of advice 'could harm clients'

16 May 2002

The defined-payment system is an unnecessary intervention in the market, according to specialist ethical investment IFA, the Global and Ethical Investment Advice Partnership, in its response to the FSA's CP121 paper. The Gaeia Partnership has questioned why the FSA has failed to publish any research into the difference, if any, between the types of products and providers recommended by feeand commission-based advisers. The firm says it generally recommends similar products, ...

Manchester Building Society - Gold Bond

17 May 2002

Friday, May 17, 2002 Type: High interest accountMinimum-maximum investment: £2,500-£150,000Interest rate: 5.15% gross a yearTerm: Until June 30, 2004Offer period: Until further noticeWithdrawal penalties: One penalty free withdrawal up to 10% of the balance allowed a year, thereafter 30 days' loss of interest on amount withdrawnTel: 08709 900810

Many towns too costly for first-time buyers

16 May 2002

First-time buyers face being priced out of the market in many of Britain's biggest towns, according to the Halifax. Its research shows that, in 451 towns, buying a home is beyond the reach of one-third of potential first-time buyers. There is a marked geographic divide, with house prices in Southern England unaffordable for four-fifths of average-earning FTBs while the same is true for only one-tenth of FTBs in the North. Sevenoaks in Kent suffers from the greatest disparity, ...

More woe for Equitable with-profits annuitants

16 May 2002

Equitable Life with-profits annuitant holders are still facing a bleak future as hopes of having their income levels boosted have once again been dashed. Chief executive Charles Thomson is writing to policyholders to tell them that att-empts to recalculate the growth rates on which their annuity is based will not improve their situation. With-profits annuitants have arguably been hit hardest by the company's financial troubles as they are unable to move their money elsewhere. Their ...

New Star International - Global Investment Fund

15 May 2002

Wednesday, May 15, 2002 Type: OeicAim: Growth by investing in New Star Asian opportunities, New Star European growth, New Star global emerging markets, New Star Japan recovery, New Star UK dynamic and New Star US opportunities fundsMinimum investment: Lump sum £7,000, Euro 10,000, $10,000Place of registration: DublinInvestment split: Choice of New Star Asian opportunities, New Star European growth, New Star global emerging markets, New ...

No credit for FSA handbook

16 May 2002

Had the IFAs who commented on our accreditation of the FSA website (Money Marketing, May 2) clicked on the Winning Website logo, they would have found the following text clearly displayed: "Exclusion from the accreditation: We have excluded from the accreditation the FSA Register and links to current and past publications." The FSA handbook - which was the focus of IFAs' criticisms - is a current publication. It is thus excluded from the accreditation. Were we to insist that ...

Northern Rock bond reaches issue 8

20 May 2002

Northern Rock has introduced the eighth issue of fifty:fifty, a guaranteed equity bond and high interest account packaged within one product.

Norwich Union looks to a sure future

20 May 2002

Considering the commission payable for the product, Both says: "Not excessive for the work involved, but in line with the market." Pack feels the single premium rate is too high. Moving on to the product literature, Colsell says: "Good, not too complicated, but I think some examples of premiums would be helpful." Pack feels it is clear and easy to read, and ideal for the age group at which it is targeted. Both says: "Generally ...

Norwich Union looks to a sure future

20 May 2002

Norwich Union Future Assured Type: Future needs long term care plan Minimum premium: £20 a month, £200 a year, £3,000 lump sum Minimum-maximum benefit: £200 a month, £2,400 a year - £3,333 a month, £40,000 a year Minimum-maximum ages: 17-80 regular premiums, no maximum for lump sum Cover provided: Blue - on failure of one ADL an independent living benefit of three times the monthly ...

NU leads the way on term cover

15 May 2002

Norwich Union has broken through the 300,000 barrier to become the UK’s largest writer of regular premium term assurance, according to Swiss Re Life & Health TermWatch. Its 313,444 polices written last year, up from 246,755 in 2000, give it 20 per cent of the market. Business from IFAs was up 12 per cent on the previous year to 203,548 policies from 181,795 in 2000. Overall, two thirds of the business came from IFAs. 

NU's MPPI can cover credit cards and bills

16 May 2002

Norwich Union is offering mortgage payment insurance which allows borrowers to extend coverage from their mortgage to other outgoings such as loans, credit cards and regular bills. The product replaces its MPPI offering and includes a 33 per cent introductory discount for claim-free customers. There is no qualifying period for unemployment cover for claim-free customers who take out cover at the same time as they arrange a mortgage. Customers can choose deferred periods of ...

Outside edge

16 May 2002

CP121 has quite rightly occupied most newsprint but CP132, the presentation of past performance and bond yield funds in financial promotions, is also controversial. I think the industry has played right into the hands of the FSA in asking for a slap on the wrists. It has been farcical to have companies advertising top performance over 45 months and five days or promoting the relative merits of their European fund when the manager responsible for that performance walked out months ...

Premier fund locks in capital

21 May 2002

Premier Fund Managers has introduced the second issue of the Premier income and growth plan, a Dublin-based closed-ended fund that is linked to the FTSE 100 index for four years.

Public give commission the thumbs-up

16 May 2002

Most consumers are happy to pay for advice through commission and understand that the word independent means getting advice on the whole market, a survey for IFA Promotion reveals. The BMRB research for IFAP shows 60 per cent are happiest to pay for financial advice by commission, rising to 70 per cent for families in the lower socio-economic income group D. Across the board, only 7 per cent preferred fees. Forty-five per cent of consumers say independent adv-isers not owned by ...

Raise state pension age to 70, says Axa

16 May 2002

Axa is calling for the basic state pension age to be raised to 70 in a bid to persuade people to save more for their retirement. The life office says drastic action is needed as the Government has run out of options other than raising the state pension age or making private contributions compulsory. Research from Axa suggests 40 per cent of people would save more if the state pension age was raised as they do not want to work beyond 65. Axa says the research indicates that ...

Regulate buy-to-let to plug protection gap

16 May 2002

Buy-to-let should be regulated. That is the view of the majority of mortgage intermediaries and many lenders. We suspect it is the view of the FSA following an expression of concern about the market by director of high-street firms Sarah Wilson. The failure to regulate leaves a dangerous gap in consumer protection. Many buyers-to-let are not commercial landlords but are using a buy-to-let property as their primary investment, often for retirement as well as for income. Buy-to-let mortgages ...

Savers unaware of rates

16 May 2002

Around 20 million savers have no idea how much they are earning on their savings. According to research commissioned by Halifax, only 40 per cent checked their account last year and older savers were more likely to check their rates of return than younger savers. A third of those questioned said they would take part in a savings review if banks or building societies set them up. It says a saver with £5,000 in a low interest account could get an extra £200 a year if they ...

ScotEq gets to boot of the protection problem

16 May 2002

Scottish Equitable Employee Benefits is promoting the "common-sense protection" offering on its employee protection menu with a pair of wellington boots. The £150,000 trade press campaign uses images of employees in everyday scenes to emphasise the importance of protection products. ScotEq estimates that as many as four in five households own a pair of wellies compared with fewer than one in five employees who have protection benefits offered by their employers. But ScotEq ...

Scottish Mutual - Income and Growth Plan 3

16 May 2002

Thursday, May 16, 2002Type: Guaranteed equity bondAim: Income or growth linked to the performance of the Dow Jones Eurostoxx 50 indexMinimum-maximum investment: £7,000-£500,000Term: Five years two monthsGuarantee: Capital returned in full at end of term provided the index does not fall by more than 20%Return: Choice of 8% gross income a year, 1.92% gross income a quarter or 42% growth at the end of the termClosing ...

Selestia Life & Pensions - Selestia Investment Bond

20 May 2002

Monday, 20 May 2002 Type: Unit-linked bondAim: Growth by investing in funds from 30 fund management companiesMinimum investment: Lump sum £5,000Fund links: 182 funds from Aberdeen Unit Trust Managers, ABN Amro, Artemis Unit Trust Managers, Baring Fund Managers, Britannic Asset Management, Close Fund Management, Credit Suisse Asset Management, Deutsche Asset Management, Dresdner RCM, Fidelity Investment Funds, First State, Framlington, ...

Setback for UBS launch as SGAM swoops for fund duo

16 May 2002

UBS Global Asset Manage-ment has been forced to rethink its plans for entry into the UK retail market after rival SG Asset Man-agement poached the two managers set to run its flagship funds. Hugh Sergeant and Hari Sandhu were set to run the UK growth and UK equity income funds respectively but will now bolster SGAM's UK team. Instead of a major splash into the market, UBS's entry will be more like a ripple with the launch two lower-profile funds in June with the rest delayed ...

Society cash is in the Baggies

16 May 2002

West Bromwich Building Society has renewed its sponsorship of Premiership new boys West Bromwich Albion Football Club. Newly promoted WBA signed a one-year sponsorship deal with the society which includes shirt sponsorship, affinity accounts and a football in the community programme. This is the fourth year the society's name has appeared on the Baggies' team shirt and it says the club's move to the Barclaycard Premiership will have added PR benefits and increase its TV ...

Student years blamed for debt

16 May 2002

Nearly two-thirds of 18-30-year-olds in debt blame their student years for their poor financial health, according to research carried out for Kensington Mortgages. The survey, conducted across the UK by research firm RSGB, asked 1,000 adults about the causes of their indebtedness. Sixty-three per cent of young people blamed their student years for debt, 12 per cent of all age groups said cre-dit cards were the main reason for their financial problems. Among 40-50-year-olds, the proportion ...

T&G enters Sipp market

21 May 2002

Teather & Greenwood Investment Management has entered the self-invested personal pensions (Sipp) market with the introduction of the TGIM Sipp.

Teather & Greenwood Investment Management - TGIM Sipp

17 May 2002

Friday, 17 May 2002 Type: Full SippMinimum investment: Lump sum £75,000Investment choice: All Inland Revenue permitted investmentsAdministrator: Wolanski & Co TrusteesCharges: Initial £350, annual £400Commission: Subject to negotiationTel: 020 7426 9003

The data dilemma

16 May 2002

Two weeks ago, Focus Solutions published some interesting research on the services being offered by life office websites. But the names of the life offices were not revealed. The reason for carrying out the research was, no doubt, to help draw attention to its web-based version of Goal: Proposal to submit business electronically to life offices. This technology means life offices can put electronic applications on their extranet sites as well as make them available via the various ...

The state of health

16 May 2002

Was it a broken pledge on tax or desperately needed extra funding for an ailing NHS? Maybe it is a bit of both? The recently announced increase in National Insurance Contributions has left everyone smarting. An employee on earnings of £25,000 a year will pay roughly an extra £4 a week in NI while an employee on £50,000 a year will pay nearly £10 a week more. An employer with a total salary bill of £1,000,000 will have to pay an extra £10,000 a year - almost ...

Threadneedle sews up property

16 May 2002

THREADNEEDLE INVESTMENTS THREADNEEDLE PROPERTY UNIT TRUST Type: Unit trust Aim: Growth by investing in UK commercial property Minimum investment: Lump sum £25,000 Place of registration: Jersey Investment split: 100% in UK commercial property Isa link: No Charges: Initial up to 7.5%, annual 1.25% Commission: Renewal 0.5% Tel: 0800 0684000 Suitability to market 6.7 Investment ...

Verity's view

16 May 2002

Flat stockmarkets do not make news. After a few days, the public does not want to hear that markets did not move about very much. But if they stay like that for long enough, flat markets turn into an agonising form of slow torture with painful results that only gradually become apparent. The most obvious impact is in areas where consistently high investment growth is a necessity. As IFAs know all too well, more than six million homeowners are not paying off their mortgages at all ...

Virgin on track for new pension sales

16 May 2002

Virgin Money is targeting its products at travellers on Virgin Trains through a dedicated team of advisers. The staff will be employed by Virgin Money rather than Virgin Trains and will initially sell credit cards at the sitting targets, with a view to extending to the company's full range of products, including pensions and investments. Virgin is also consider targeting other captive audiences on its transatlantic flights. Virgin says it has rejected ties with other financial ...

Warnings of property crash

16 May 2002

The housing market is in significant danger of crashing, according to leading economist Roger Bootle, a former adviser to the last Conservative Chancellor Kenneth Clarke. Capital Economics managing director Bootle warned last week's Building Societies Association annual conference in Bournemouth that people's earnings are not rising in line with house prices and that mortgage debt as a percentage of income is higher than in the 1980s. Mortgage experts have also expressed ...

Websites offer more investment trust data

16 May 2002

The Association of Investment Trust Companies has expanded its website and linked up with information provider Hemscott.net to supply more company data to investors. The AITC's website at www.itsonline.co.uk now offers statistics including a range of performance figures, geographical spreads, discounts, split share analysis and total expense ratios for individual investment trusts and sectors. For investors who want to keep track of managers, there is also a function which allows ...

Zurich chooses new chief exec officer

15 May 2002

Zurich Financial Services Group has appointed James Schiro as its new chief executive officer replacing former chairman and chief exec Rolf Hüppi. Chiro will take up the post on May 17 and is currently chief operating officer group finance. He is an American and was previously chief executive officer at PricewaterhouseCoopers. At the same time Zurich has appointed Swiss banker Markus Granziol to its board as a non-executive director.