Money Marketing
16 July 2003

910 jobs to go in NU back-office revamp

16 Jul 2003

Norwich Union is closing its Cheadle administration centre as part of a wide-ranging back-office restructure that will see the loss of 910 jobs. The life and pensions arm will lose 280 staff, with a further 630 to go from the company's general operation. Compulsory redundancies are expected to total 600. NU parent Aviva says the job losses are not connected to the opening of a 1,000 strong general insurance call centre in India, due to become fully operational by the end of the year. ...

A win and a prayer

17 Jul 2003

I have recently been given £2,500 by an aunt, who suggested that I consider investing it in premium bonds. I understand that premium bonds offer the potential to win prizes while not risking the original investment. But what, in reality, is the chance of me winning a prize or prizes? Is is a worthwhile investment? What else could I consider? Sales of premium bonds have recently increased dramatically and there are now around 20 billion £1 bonds held by 23 million people. Given ...

AITC offers free guide to saving for children

17 Jul 2003

The AITC is publishing a free factsheet on saving for children. It explains why investment trusts are worth considering when it comes to investing for children, how to go about investing for them, the tax aspects and inheritance tax planning. The AITC says that with the cost of school fees reaching an annual average of £7,188 and with students facing annual shortfalls of income of £4,388, according to the National Union of Students, it is not surprising that many parents ...

Bagger on the carpet

17 Jul 2003

As David Stonebanks does not appear to be a financial adviser, should not IFAs report him to the FSA for offering unauthorised advice on the demutualisation of Standard Life? (Money Marketing, July 10). Dr Philip Thomas Thomas Financial Planning, St helens

Bankhall birthday in Barcelona

17 Jul 2003

Barcelona is proving a popular location for Bankhall's 10th anniversary business convention being held from September 4-6, with more than 300 delegates and partners already pre-registering for the event. The convention includes product provider presentations and one-to-one meetings and Bankhall says demand is higher at this stage than ever before, with more than expected main event sponsors also confirmed. Bankhall's joint chief executive Simon Taylor says: "The early response ...

Bear fund necessities for rising markets

17 Jul 2003

A wise man once said of market analysts that "there are those that don't know and there are those that don't know that they don't know". If we are to accept this wisdom, then we will have to accept that there is no way of predicting market movements until after they have happened. However, there is one sure-fire indicator that the market has now turned and this barometer of change has now signalled the end of the bear market. So what is this definitive indicator? Is it ...

Boulger top pundit over long-term loan debate

17 Jul 2003

Media interest in mortgages saw Charcol senior technical manager Ray Boulger top Presswatch's pundit chart for June, with London & Country mortgage expert David Holl-ingworth in second place. Both pundits owe their positions to coverage of the future of long term fixed-rate mortgages in the UK. Boulger got 19 mentions and Hollingworth 16,edging out Chase de Vere savings and investments manager Anna Bowes on 15 and Hargreaves Lansdown head of research Mark Dampier on 14. Hargreaves ...

Broad brand

17 Jul 2003

When you buy a soap powder, there is little commitment to the product. Provided it washes your clothes effectively, you will probably be satisfied and are quite likely to buy the same brand again. But if you find that it is not available, you may be mildly disappointed but will buy another brand without a great deal of concern. But when it comes to investment, you are making a long-term commitment and your implicit expectation is that the company managing the investment is making the ...

C&G offers range of fixed loans

16 Jul 2003

Cheltenham & Gloucester is launching a new range of fixed rate mortgages. It is offering a two-year fix at 3.99 per cent, a three-year at 4.09 per cent, a five-year at 4.29 per cent and a seven-year at 4.49 per cent all are available up to 90 per cent loan-to-value. There is also a two-year fix at 3.89 per cent for loans less than 80 per cent LTV. It is also offering a 4 year capped rate mortgage at 4.49 per cent up to 80 per cent LTV. 

Capital rules tighten for non-life firms

16 Jul 2003

The FSA is moving to tighten capital rules for non-life insurers in a bid to help prevent future financial failures. The new regime aimed at general insurers and the Lloyds of London market will feature two key changes, including a new risk-based capital requirement based on capital charges to be applied to asset and insurance risks. Also individual capital guidance to firms based on the FSA’s view of how much capital individual firms need to hold, including firms' own assessments ...

CBA covers processes but not the products

17 Jul 2003

The FSA is to conduct a cost-benefit analysis of the implications of setting up the sales processes for Sandler's stakeholder suite but not for the products themselves. It says it plans to take the introduction of Sandler products as "a given" and the CBA will not include evaluation of the introduction of stakeholder products. This assessment will be based on the "current situation" and distribution model where products can only be sold as execution-only or face to face with full ...

Correspondent's week

17 Jul 2003

My life is hardly jet-set but the week starts off in Heathrow airport, fresh from a Warsaw wedding. Poland isn't what you think it is - no heavy agricultural machinery in hotels, or brown velour suits. No giant granite statues but instead a cosmopolitan city, replete with designer shops and swish cafes. Slough on a Monday morning, however, is a throwback to 50s communism. Monotone concrete slabs and magic-eye carpets is the first impression for visiting dignitaries. This, however, ...

Digest

17 Jul 2003

The International Planned Parent Federation is launching a fund-raising campaign that aims to raise money for free condoms and sex education in Africa. The Lust for Life campaign works on the office swearbox system but, instead of foul language, office colleagues are invited to donate a few pence for every smutty thought during the day. All you need to do is log on to www.lust-4-life.com from July 16. The Diary would like to hear from any readers who think their colleagues are ...

Emag wants judicial review

17 Jul 2003

The Equitable Members Action Group is seeking a judicial review of the Parliamentary Ombudsman report that exonerates the FSA from blame in the Equitable Life debacle. Emag general secretary Paul Braithwaite says it believes the report is a "whitewash". He criticises the ombudsman for basing the decision on one complaint while more than 500 written complaints were struck out. He has also hit out at the ombudsman's failure to take evidence from any policyholders to substantiate their ...

Fidelity disappointed at lifestyling omission

16 Jul 2003

Fidelity has criticised Treasury plans for Sandler suite investment products because they do not consider using the lifestyle approach. Head of IFA business Stuart Holah also feels that there will be consumer and investor confusion over the stakeholder brand. He says: "The 60 per cent limit is not a bad compromise but that's what it is - a compromise. And it is unfair to ask investors to compromise. We are disappointed that the FSA did not look into the lifestyling approach as we feel ...

First time buyer numbers continue to fall

18 Jul 2003

First time buyer numbers continue to fall

FSA should create central policy body - Apcims

21 Jul 2003

Gay members get their entitlement

17 Jul 2003

I am writing to query your article headlined, Gay couples' charter to hit pensions for £2.5bn (Money Marketing, July 3). Under a money-purchase scheme, the fund would be available to purchase whatever type of pension the employee wants and is therefore no more of a burden on the employer. For defined-benefit schemes, is it not normal practice when setting the valuation assumptions for pension schemes to assume that most, if not all, members are married? The funding rate ...

Glasgow Investment Managers - Glasgow Isa

16 Jul 2003

Type: Investment trust maxi IsaAim: Income and growth by investing in choice of three Glasgow investment trustsMinimum investment: Lump sum £200 a trust, monthly £20 a trustMaximum investment: Lump sum £7,000, monthly £583Catmarked: NoInvestment choice: Choice of Shires income, Shires smaller companies and Glasgow income trustCharges: Initial 1%, annual 1%Special offer: Initial charge waivedOffer period: ...

Goffee at full throttle

17 Jul 2003

The meek shall inherit the earth - and in this case the meek is Norwich Union's Louise Goffee. At a go-karting race event with journalists, Ms Goffee arrived well prepared in a pair of high-heeled sandals and spent the first half-hour telling the group how little she understood about driving because "my fiancé drives me everywhere". In a Charlie's Angels jumpsuit, the glamorous Yorkshire blonde was claiming to be more Driving Miss Daisy than Penelope Pitstop. But her ...

Govt kills off annuity and wind-up bills

17 Jul 2003

Two private member's bills, one aiming to overhaul annuities and the other to amend the priority in pension scheme wind-ups, were killed off by the Government last week. Conservative MP Edward Garnier said his Retirement Income Reform Bill, which called for the removal of the obligation to buy an annuity beyond the level of state benefits, got only 30 minutes of Parliamentary time because of Government blocking tactics. Labour MP Frank Field's Pensions (Winding Up) Bill, ...

House deposits have ring of commitment

17 Jul 2003

House deposits have overtaken diamond rings as the biggest sign of commitment that can be made by a man, according to research by the Woolwich. New research from the Woolwich reveals that 30 per cent of people believe that buying a house together is a clearer sign of long-term commitment than an engagement ring. Only 17 per cent preferred engagement. Women were more likely to prefer a deposit, at 34 per cent, to an engagement ring, at 13 per cent. Men were more traditional, with ...

Humble PI

17 Jul 2003

The news that Lighthouse has structured its takeover of RJ Temple's advisers so as to leave the individuals with £50,000 PI excesses is a clarion call to the rest of the industry (Money Marketing, July 3). I suppose it had to come sooner or later. The realisation of where the complaints come from may shock some but please others more. It is actually quite a sensible way forward and Lighthouse could justifiably question the motives of any adviser who was too reluctant to agree ...

Income product industry group launched

22 Jul 2003

An industry initiative aimed at the promotion of best practice within the income sector has been launched with the backing of IFAs and product providers.

Inside edge

17 Jul 2003

The UK market is just not ready to get excited about 25-year fixed rates. Most lenders, let alone consumers, cannot even tell you why the standard UK mortgage term is 25 years. Bank and building society software systems usually default to this now standard duration, yet few have a meaningful explanation for its universal acceptance. When lenders suddenly offered 30 to 40-year terms, commentators took a sharp intake of breath as if the 25-year term was somehow socially sacrosanct. Long-term ...

Interview: Adair Turner

17 Jul 2003

The decision by Pensions Commission review head Adair Turner's to include means' testing in his study of long-term savings has been well received by many who had thought the subject was a sacred cow for the Government. Turner's wide-ranging experience meant he was always going to look at the full picture. He was director general of the Confederation of British Industry and is vice-chairman of Merrill Lynch Holdings. As chairman of the Low Pay Commission, the independent ...

Investment view

17 Jul 2003

If you want to know what the monetary policy committee of the Bank of England is likely to decide on interest rates, check out what I have predicted to be the likely outcome, then assume the opposite will occur. Whenever I opine that rates will change - usually publicly, in front of a camera or microphone - the MPC sits on its hands. State that no change is in prospect, as I did - twice - last week, and a cut is guaranteed. In my defence, Simon Rubinsohn, Gerrard's chief economist, ...

It's not a gamble

17 Jul 2003

Most people would agree the insurance protection market should be based on products that meet the genuine needs of customers by developing products that do not guarantee failure. Critical-illness cover is an ideal example of a protection product meeting the needs of today's customers. Concern about the risk of suffering from conditions such as heart attacks, cancers and strokes is real and is perhaps among the greatest fear that the average person experiences. There are significant ...

Julian Gibbs

17 Jul 2003

Investment-grade bond funds have had an excellent run over the past three years or so and are now at dangerously high levels and on ridiculously low yields. You can get a better return on the best building society deposit accounts with no risk to your capital. Like tech funds after the boom, I believe that investment-grade bond funds are likely to give lousy returns over the next few years and could show big capital losses if interest rates rise again. On the other hand, I have ...

Keydata Investment Services - Dynamic Growth Plan 5

16 Jul 2003

Type: Capital protected bond Aim: Growth linked to the performance of the FTSE 100 index Minimum-maximum investment: £3,000-no maximum, Isa £3,000-£7,000 Term: Six years Guarantee: Original capital returned in full provided index does not fall by more than 40% and returns to at least its starting level, or index rises by at least 60 per cent Return: 5% growth for every 1% rise in the index at end of term up to maximum of ...

L&G and N&P sign protection deal

22 Jul 2003

Legal & General and Norwich & Peterborough Building Society have announced a link-up which will provide borrowers taking out a mortgage through N&P access to L&G's term and critical illness cover. In addition, the deal sees the society joining L&G's mortgage club. N&P branches will be using L&G's online term assurance facility which allows full transaction of protection business.

Life office assets drop for fourth year in row

17 Jul 2003

UK life insurance companies have seen their assets in excess of liabilities and solvency margins drop for the fourth year in a row as poor stockmarket conditions took their toll, according to research by Ernst & Young. Its fourth annual survey of UK life offices shows that excess assets have dropped to £22bn in 2002 from £34bn in 2001 and £80bn in 1999. The free-asset ratio dropped to 5 per cent in 2002 from 7 per cent in 2000. E&Y says this figure would ...

Market stalled

17 Jul 2003

The UK's listed IFAs are finding the going tough, with their problems coming under intense scrutiny because of stockmarket disclosure requirements. A leading fee-based IFA likened the impact of several listed IFAs' results hitting the market this month to watching the Titanic speed up to hit the iceberg. There are seven listed IFA groups. The dominant three are Berkeley Berry Birch, Inter-Alliance and Millfield, with smaller players Cavanagh, Kingsbridge, Lighthouse and Berkeley ...

MCCB chief warns on reversion regulation

17 Jul 2003

Mortgage Code Compliance Board chief executive Luke March has warned that even if home-reversionary schemes are regulated, similar products could spring up that do not fall within regulation. The mortgage industry has long been concerned over the FSA regulating life-time mortgages while passing over home-reversionary schemes and it welcomed June's announcement that the Treasury would consult on regulation of home-reversion schemes. But March's comments could stir up further ...

Merrill Lynch Investment Managers - MLIIF Corporate Bond Fund (Euro)

18 Jul 2003

Type: Sicav Aim: Growth by investing globally in Euro-denominated investment-grade bonds Minimum investment: Lump sum $5,000 Place of registration: Luxemburg Investment split: Financials 39%, telecoms 16%, utilities 16%, Government 16% industrials 7% cash 6% Charges: Initial 5%, annual 1% Commission: Initial 3% Tel: 00352 342 0101

Millfield gets funding of £9m despite losses

17 Jul 2003

Millfield Group has raised another £9m from the City despite releasing figures which show it was losing more than £1m a month as recently as march this year. Following in the wake of other quoted IFAs, Millfield's 2003 results show its losses are up by 62 per cent to£11.5m from £7.1m in 2002 on a turnover of £31.3m. The company's balance sheet reveals it had £6.9m in cash in the bank as at March 31, 2003, down from £14.4m on September ...

Nationwide cuts loan rate to 4.54 per cent

16 Jul 2003

Nationwide has reduced its base mortgage rate by 0.1 per cent to 4.54 per cent following the Bank of England’s announcement that it would cut the base rate by 0.25 per cent. The building society says its base mortgage rate is now around 1 per cent lower than the standard variable rate of most other high street lenders. It is currently reviewing its savings rates and says it will make an announcement in due course. 

NU backing for net wrap account

17 Jul 2003

Millfield has secured financial backing from Norwich Union for its lifetime group wrap account, due to be launched this year, which it believes will help it take advantage of depolarisation. It is also telling its advisers that they will have the option to multi-tie after depolarisation. NU is one of the first providers to take a significant step into the wrap market by investing an undisclosed amount in the lifetime group. The wrap is an internet-based platform which provides ...

NU takes on banks and societies with fixed-income plan

17 Jul 2003

Norwich Union is aiming to go head to head with high-street banks and building societies with its monthly fixed-income plan. NU says the plan should appeal to investors looking for a good rate of income compared with the low interest rates offered by highstreet providers. The plan pays 0.47 per cent a month gross or 5.75 per cent annually which NU says compares well with bank and society savings rates although its product contains more risk. The plan is linked to the FTSE 100 ...

Online solutions

17 Jul 2003

Regulation pressures have put compliance at the core of IFA business practice. With misselling and PI presently the most prominent issues in the industry, networks and IFA support service providers are basing their primary sales pitch on their ability to supply user-friendly, cost-effective compliance systems. Misys managing director Steve Pearson believes that since the advent of networks in the 1980s, there have been two key requirements that virtually all advisers want from their ...

Outside edge

17 Jul 2003

It is becoming clearer that the issue of the UK mortgage market accepting long-term fixed rates is central to the Government's economic stance. The independent review commissioned in the Budget can now be seen in the context of the Chancellor's recent statement that he sees the stability afforded by long-term fixes as central to the key tests that must be passed before a referendum on the euro. There are two quite distinct issues from an economic perspective. The Chancellor has ...

PanEuroLife - PanEuroLife Master 50 Fund

22 Jul 2003

Type: Unit-linked fund of fundsAim: Growth by investing globally in equity funds and bond fundsMinimum investment: Lump sum £5,000Investment split: 40-60% equities, 40-60% bondsYield: 6% a yearPlace of registration: LuxemburgCharges: Initial up to 5%, annual 1.1%Commission: Initial up to 5%Tel: 01623 726105

PHP in renewal deal for IFAs' PMI business

17 Jul 2003

Private medical insurance broker The Private Health Partnership is offering a deal for IFAs to pass over their disparate PMI business in return for up to 50 per cent of the renewal commission. PHP, which is a subsidiary of Skipton Building Society, says regulation of the PMI market by the FSA in January 2005 means compliance costs may soon outweigh the commission generated for many IFAs and general brokers which have only a few PMI policies on their books. Director Peter Bye warns ...

Projections paint a payout picture

17 Jul 2003

The gap between with-profits payouts from the best and worst-performing life offices is set to reach 40 per cent, according to research by Hargreaves Lansdown. Based on asset allocation, the research considers that the Scottish Equitable growth and WP2 funds could be the highest performers in the future, producing an annual assumed net growth rate of just over 6 per cent and 5.7 per cent respectively. This is followed by Legal & General's fund which is projected to return 5.6 ...

Regulator backs filter questions despite fears on public misbuying

17 Jul 2003

The FSA is pressing ahead with a lighter-touch regulation approach based on decision-tree-style filtered questions even though it accepts there is a serious risk of widespread consumer misbuying. It is hoping that the guided self-help approach assisted by a series of filtered questions from a salesperson will be sufficient to avoid the "significant consumer detriment" which it acknowledges is a risk in its response to discussion paper 19. Firms which applied the simplified sales ...

Retrospective lifestyle switch brings protests from providers

17 Jul 2003

The Government's plan to bring existing stakeholder pensions into Sandler's product suite has come under fire from providers which claim that the industry will face huge costs in advising existing customers about the new lifestyle default option. They claim that the charges on the existing contracts barely covered their original sale and will not stretch to providing additional advice on the new changes. The Treasury says existing stakeholder pension plans will fall under ...

Separate mortgage network is set up by Zurich

17 Jul 2003

Zurich has established a new mortgage network separate from the Zurich Advice Network arm. Brokers who join the Zurich Mortgage Network can become either appointed representatives or directly authorised. They will have access to 17 lenders, including Abbey National, NatWest, Halifax and Nationwide, along with a further 80 non-panel lenders and a specialist packager. They will also be able to provide ASU insurance and home contents cover and life protection products to their ...

SG Life and PanEuroLife offer protected unit-linked funds

21 Jul 2003

SG Life and PanEuroLife have introduced capital-protected unit-linked funds only available through the companies' offshore investment bonds.PanEuroLife's protected equity fund is accessible through the pharos and pelf+ bonds. Pelf+ has a minimum investment of £5,000 while the pharos bond has a minimum investment of £40,000.The protected equity fund is linked to a basket of seven funds but these are not equally weighted. Invesco UK equity has the highest ...

Smooth operator

17 Jul 2003

In response to Gordon Stewart's letter (Money Marketing, July 3), on behalf of the many companies providing, he says, poor service, we treat all critisicm positively and embrace the many comments we receive with regard to the usually excellent service. In this rare instance, it is accepted that further training of the telephone person is needed. If you could provide their name, we will be in a position to identify their needs. The action will be complete when we are confident that ...

Standard Life Bank drops 3 year fixed rate to 3.85 per cent

22 Jul 2003

Standard Life is offering its lowest ever three-year fixed mortgage rate starting at 3.85 per cent (APR 4.8 per cent) for loans up to 75 per cent loan to value. An alternative three-year fix is available at 3.99 per cent (APR 4.9 per cent) which has contributions towards costs.It has also cut its booking fee on the three-year fix for loans up to 75 per cent loan to value by 26 per cent with the fee dropping to £185 from £250

Stepped guarantor mortgage for first time buyers from Leeds & Holbeck

22 Jul 2003

Lender Leeds & Holbeck’s new guarantor mortgage is now available to young professional buyers at a stepped rate of 3.99 per cent until October 2005 then 4.99 per cent until October 2008. 

Swiss Life closes to new individual protection business

18 Jul 2003

Protection provider Swiss Life has closed to new individual business with immediate effect after failing to sell that part of its operation. The provider says its group business is still under evaluation.

Tenet to axe 20 staff as systems are boosted

17 Jul 2003

Tenet staff numbers are likely to fall by at least 6 per cent following imp-lementation of new back-office systems. Less than two days into a six-week consultation, Tenet has confirmed that it is looking at making at least 20 staff redundant across the group when the implications of its new IT systems are realised. Chief executive Simon Hudson says the move is purely the result of a change in IT functions at the network, where technology advances have replaced the functions of ...

The moral of the marketing story

17 Jul 2003

Imagine you have just retired. You have worked for 40 years, saved hard and built a retirement nest egg of £50,000. What do you do with it? Turning to the personal finance pages of your newspaper, you read about a really interesting investment that can make you lots of money. Duly encouraged, you invest. Then, blow me, you get a statement through a year later and find you have lost a thumping 40 per cent of your money. You just cannot believe that this investment is called ...

Tilney Investment Management - Tilney Growth Portfolio

18 Jul 2003

Type: Oeic Aim: Growth by investing in global equities and fixed-interest securities Minimum investment: Lump sum £500, monthly £100 Investment split: UK equities 58.2%, US equities 15%, European equities 5.5%, Japanese equities 1.6%, other equities 2.3%, fixed interest 10.7% Isa link: Yes Pep transfers: Yes Charges: Initial 4%, annual 1.25% Commission: Initial 3%, renewal 0.5% Tel: 0808 100 8878

Tilney nets retail investors

22 Jul 2003

Tilney Investment Management has made its range of six Oeics available to retail investors four years after the funds were established. One of the Oeics, the Tilney growth portfolio fund, aims for growth by investing in approximately 85 holdings made up of global equities and fixed-interest securities. UK equities dominate the portfolio with holdings that include BP, Shell and Vodafone, while smaller amounts are invested in the US, Europe, Japan and fixed-interest securities. The ...

Tiner takes top job and pledges a shake-up at the FSA

17 Jul 2003

The Treasury has appointed John Tiner as the successor to FSA chief executive Howard Davies. Tiner, who is managing director, consumer, investment and insurance directorate at the FSA, is promising a shake-up when he takes the helm in September. For many in the industry, Tiner is seen as providing continuity compared with Callum McCarthy, who takes over Davies' other role of chairman in September, coming from electricity regulator Ofgem. Joining the FSA in 2001, the ambitious ...

Wife expectancy

17 Jul 2003

This week, I want to look at another recent case involving spouses and trusts - except in this case there was no spouse. However, the case does serve to emphasise the importance of excluding the spouse from all benefits under a trust, regardless of the circumstances of the case. In a less famous case than Eversden, the fact that capital gains made by trustees of a UK settlement are assessed on the settlor if either the settlor or the settlor's spouse can benefit was made abundantly ...