Money Marketing
21 May 2003

  • 'Home boom has raised IHT threat'

    22 May 2003

    HSBC is warning that rising property prices may push homeowners over the inheritance tax threshold and risk leaving their estate with hefty bills. The bank says a property worth £380,000 could result in an IHT bill of £50,000. But it warns that any owner of a property that puts the value of their estate over the £255,000 IHT threshold could leave family members with a tax nightmare, with 40 per cent tax being payable on any remaining assets over the threshold. HSBC ...

  • 'Regulation will kill off 20% of general insurance advisers'

    22 May 2003

    Bankhall estimates that up to 20 per cent of general insurance intermediaries could go out of business once statutory regulation starts on January 15, 2005. The IFA support services group says one in five firms will fail to meet the requirements when they apply for FSA regulation starting next year. However, Bankhall says the gap left by these firms will create substantial opportunities for companies capable of establishing compliant procedures. To help members prepare for ...

  • 'Sheer volume of change is at an all-time high'

    22 May 2003

    MM: What is the biggest challenge facing the life insurance industry? RW: The biggest challenge is probably the fact that there are so many changes coming together at one point in time. The regulatory changes would be a big enough challenge on their own without the trading environment that the industry finds itself in. MM: Is the FSA unnecessarily bombarding the industry with change? RW: The challenge for the FSA is to strike a balance between reforming the market and ...

  • £10k raised for Sparks

    22 May 2003

    Thirty-two City institutions raised £10,000 for children's charity Sparks when they took part in this month's 31st annual Sparks rugby sevens tournament in Richmond. This year's cup winner was Dresdner Kleinwort Wasserstein, which beat PricewaterhouseCoopers in the final. Competitors included the Royal Bank of Scotland, Goldman Sachs, FPD Savills and HSBC. Sparks (sport aiding medical research for kids) funds research into conditions such as cerebral palsy, spina ...

  • A consumer's view

    22 May 2003

    If we wanted any clearer evidence of the damage that the European Union can do to UK businesses then we have to look no further than the decision to put an end to advice-free stockbroking, otherwise known as execution-only business. Stockbroking IFAs and their clients should be up in arms at the proposals. On June 12, a committee of the EU meets to discuss 17 proposed amendments to article 18 of the European Commission's controversial revisions to the Investment Services Directive. On ...

  • ABI says FSA admits problems extending Sandler WP reforms

    22 May 2003

    The FSA has conceded that there would be difficulties in extending the Sandler withprofits reforms across the industry, according to the ABI. In its response to DP20, which considers the viability of extending the Sandler recommendations to all with-profits products, the ABI says the regulator has correctly poin-ted out the obstacles to industrywide implementation of the reforms. The ABI says that while there is no doubt about the end goal of providing greater clarity to policyholders, ...

  • ABI warns FSA on cost of change

    22 May 2003

    The ABI has warned the FSA against intervening to change market practice at a big cost to the industry when there is limited consumer benefit. ABI head of regulation and strategy Francis McGee, spea-king at Money Marketing Live in London's Olympia last week, argued that the FSA should concentrate its reforms where it could bring about a real consumer benefit which would allow it to concentrate on real crises. He highlighted consultation paper 170, which will create a new sales ...

  • AMP says bidding has started

    22 May 2003

    Embattled financial services giant AMP says it is already getting enquiries for some of its lacklustre UK businesses. Just weeks after announcing plans to demerge its Australasian and UK arms and confirming that it would test the market for its NPI and Ample brands, it revealed last week at its annual meeting in Australia that potential bidders have made approaches for Ample and IFA Towry Law. There is speculation that a bid is being worked on by Resolution Partners, a company ...

  • Boost for NU as equity-release plans hit record

    22 May 2003

    Norwich Union says the number of people releasing equity from their properties has hit record levels. The company says in the first quarter of this year it saw an 89 per cent increase in equity-release business compared with the same time last year but says it is unable to provide figures. Norwich Union is the UK's biggest provider of equity-release products and claims that its equity-release sales doubled between 2000 and 2002. The Council of Mortgage Lenders believes that ...

  • Britannia International - Guaranteed Capital Equity Bond Issue 13

    23 May 2003

    Type: Guaranteed equity bondAim: Growth linked to the performance of the FTSE 100 indexMinimum investment: Lump sum £1,000Term: Five yearsPlace of registration: Isle of ManInvestment split: 100% linked to the performance of the FTSE 100 indexGuarantee: Original capital returned in full regardless of the performance of the indexReturn: Up to 35% growth at end of termClosing date: July 1, 2003Charges: ImplicitCommission: ...

  • Britannia International - Guaranteed Capital Equity Bond Issue 13

    23 May 2003

    Type: Guaranteed equity bond Aim: Growth linked to the performance of the FTSE 100 index Minimum investment: Lump sum £1,000 Term: Five years Place of registration: Isle of Man Investment split: 100% linked to the performance of the FTSE 100 index Guarantee: Capital returned in full regardless of the performance of the index Yield: Up to 35% gross after five years Closing date: July 1, 2003 Charges: Implicit Commiss

  • Britannia International fixes on 13

    23 May 2003

    Britannia International has established the 13th issue of its guaranteed capital equity bond. This issue of the bond offers growth potential of 35 per cent gross over five years. Investors also get their original capital returned in full, whatever happens to the FTSE 100 index during the term. Investments will receive a fixed rate of interest at 6 per cent gross until the start of the term on July 14, 2003. To calculate the final returns, the closing level of the index ...

  • Buchanan takes on group role for Royal London

    22 May 2003

    Scottish Life head of communications Alasdair Buchanan has taken on the additional role of head of group communications. He will now handle external communications for the entire Royal London group as well as Scottish Life. Buchanan, who is a qualified actuary, has been with Scottish Life since 1996 and became head of communications in 2000. He previously worked in various roles at Scottish Widows for more than 20 years. Royal London group chief executive Mike Yardley says: "With ...

  • Cheap frills

    22 May 2003

    Two months after she first came to see me and after three postponements of our second meeting, I have just signed up a client for mortgage protection term insurance. The reason for the third postponement was that she had been shopping around and Direct Line had come up with the same package of cover as I had recommended but at three-fifths of the cost. That can't be right, I said. The policy I had recommended was the most keenly priced of its type from the leading mainstream ...

  • Corporate PMI sales up says ABI

    21 May 2003

  • Correspondent's week

    22 May 2003

    Working from home on Monday and have the day nicely mapped out until a rash of calls from consumer press journalists on the new ING Direct savings account seeking opinion. ING has launched a new savings account with the best AER on an easy access account. As a result, I liaise with Lansons, our PR agency, to bash out a moneysupermarket.com press release offering an appraisal of this account. Then I make calls to ING to try to do a deal to allow moneysupermarket.com users to apply. I ...

  • Critical business is booming

    22 May 2003

    Despite the turbulence caused by product providers withdrawing guarantees and raising premiums, individual critical-illness insurance sales had a bumper 2002, growing by 34 per cent, according to Swiss Re's term & health watch report. The benchmark analysis of the life and protection market for the last 12 months reveals that, as well as the boost in the CI market, individual term sales rose by 31 per cent while individual income protection sales were up by 20 per cent. The ...

  • Discount Club sets out stakeholder criteria

    22 May 2003

    The Discount Club managing director Martyn Laverick has written a guide for members on how to choose a stakeholder pension. It says the main criteria is the annual management charge which should be no more than 0.8 per cent rather than the 1 per cent maximum allowed. It adds IFA commission should be rebated towards reducing the annual management charge. The guide says the pension should allow single contributions at any time, with a minimum of £20, and that the provider must ...

  • Dwindling number willing to pay for Loan advice

    22 May 2003

    The numbers of adults unwilling to pay for mortgage advice is on the increase, according to research from Intelligent Finance. It found that seven million UK adults are reluctant to pay for advice up from 5.4 million last year. The survey found that the average figure that people are prepared to pay for advice is £160. A quarter are willing to pay between £100 and £200 and 21 per cent would pay up to £100. Only 10 per cent of respondents are willing ...

  • Edinburgh Fund Managers - UK Absolute Alpha Fund

    27 May 2003

    Type: OeicAim: Growth by investing in a portfolio of UK equitiesMinimum investment: Lump sum £2,000, £1,500 for Pep transfers, monthly £100Investment split: 56% UK large caps, 40% UK mid caps, 4% UK small capsIsa link: YesPep transfers: YesCharges: Initial 3.5, annual 1.5% until September 30, 2003, 2% thereafterCommission: Initial 3%, annual 0.5%Tel: 0800 917 5678

  • Finances would not survive illness

    22 May 2003

    More than half of the UK working population do not believe they would be able to survive financially for more than three months if they fell ill. New research from Swiss Life shows that 51 per cent say they could not last more than three months and 34 per cent say they would rely on the state to pay their living costs if they were off sick. Despite this, 65 per cent are aware that Government support is less than £75 a week. When asked what type of insurance they view as being ...

  • FSA to probe Pearl staff over misselling claims

    22 May 2003

    Up to 35 Northern Scotlandbased sales staff at Pearl are being investigated by the FSA concerning allegations of sales irregularities. A spokesman for trade union Amicus which represents the workers says about 35 sales staff, the majority of whom are waiting for redundancy payments from Pearl after its salesforce was closed, are being investigated by the FSA for alleged misselling of pensions. The spokesman says redundancy payments have been suspended while the investigation is ...

  • FSA website shows collapsed IFA Lamensdorf as still authorised

    22 May 2003

    The FSA helpline and website were still this week telling consumers that Lamensdorf was authorised to give advice despite the IFA going into receivership. On Tuesday this week, the FSA website was classifying the IFA as an authorised firm despite the receivers having already been called in and the firm having told its advisers to stop trading. Lamensdorf advisers were told by the firm to stop trading over two weeks ago but when MM mystery-shopped the FSA consumer helpline both ...

  • FSA's new approach to regulating funds

    22 May 2003

    This week's publication of a revised, modern, approach to the regulation of collective investment schemes (Oeics and unit trusts) consultation paper represents a shift in the FSA's regulatory style. For intermediaries, it should provide more opportunities to recommend collective investment products to meet clients' individual needs by making available a much wider range of non-Ucits funds - such as a "balanced" fund containing securities, property and cash. Driving it ...

  • GHW Stockbrokers - Trixter

    23 May 2003

    Type: Enterprise investment schemeAim: Growth by investing in interactive exercise bikesMinimum investment: Lump sum £1,200Opening/closing date: May 16, 2003-June 17, 2003Charges: NoneCommission: Subject to negotiationTel: 0845 345 2003

  • Greenshields Picked as MD for Barclays investment division

    22 May 2003

    Barclays has appointed former Zurich UK life chief executive Ray Greenshields as managing director of its investment management division. Greenshields resigned from Zurich last October after less than two years in the job. Prior to that, he was managing director of AMP's financial services division. At Zurich, he oversaw the demise of the Allied Dunbar brand name. In his new role, he will be responsible for effectively all of the bank's' retail business, including Barclays ...

  • HL makes call for AMP policyholders to take action now

    22 May 2003

    Hargreaves Lansdown is warning AMP policyholders to act now if they want to hold on to any hope of future bonuses amid rumours of potential bidders for parts of the company. AMP plans to demerge its Australian and UK operations and will move its UK with-profits funds out of equities and into fixed interest. It has written to NPI and London Life with-profits policyholders warning them to expect little or no annual bon-uses in the future. HL head of pension research Tom McPhail believes ...

  • Hollingworth takes the lead as top press pundit

    22 May 2003

    London & Country Mortgages' mortgage specialist David Hollingworth topped this month's PressWatch industry pundits table thanks to continued speculation over the housing market. Hollingworth had 31 mentions, beating nearest rival, Charcol senior technical manager Ray Boulger with 22 mentions. Chartwell Investment Management director Patrick Connolly was third with 17 mentions while Hargreaves Lansdown head of research Mark Dampier, Torquil Clark investment strategist ...

  • HSBC in multi-tie deal with fund firms

    22 May 2003

    HSBC has become the first major high-street bank to strike a multi-tie agreement with UK fund firms in a deal including Fidelity, Schroders and Gartmore. It says it will offer branch-based advice on a wide range of funds from five groups, including Invesco Perpetual and JP Morgan Fleming, as soon as the FSA's depolarisation proposals come into force later this year or early next. The deal follows the successful trial period of three funds of funds launched earlier this year ...

  • Huge gap between pension payouts

    22 May 2003

    There is a massive gap between the best and worstperforming personal pensions, according to the Money Marketing Online with-profits survey. It reveals that Liverpool Victoria tops the tables for£25 a month with-profits personal pensions taken out six months before an investor's 45th birthday with retirement at age 65, with a payout of £32,223, including the terminal bonus. The worst performer is Scottish Widows at £15,428, less than half the payout of the ...

  • IFAs back PI mutual but don't want set-up costs

    22 May 2003

    Most IFAs support industrywide mutuals providing professional indemnity insurance even if premiums were no cheaper than those currently available, says an FSA survey. But although 59 per cent say they would support a mutual scheme, 47 per cent would not be willing to contribute to set-up costs and 69 per cent say they would not join if there was a risk they would have to foot the bill if things went wrong. Eighty-three per cent say the problems in the PI market are systemic ones ...

  • IFAs inundate MPs with letters on PI crisis

    22 May 2003

    IFAs are sending more letters to their local MPs about professional indemnity insurance than any other topic. FSA head of investment firms David Kenmir told Money Marketing Live that concerns over PI surpassed correspondence about the Equitable Life debacle for the first time last month. He said the FSA keeps a monthly track of the letters that IFAs send MPs who then often approach the FSA to raise the concerns. Kenmir said the gap between letters over PI and letters concerning ...

  • Iimia - Iimia Accelerated Fund

    22 May 2003

    Type: Oeic Aim: Growth by investing in investment trusts and closed-ended funds Minimum investment: Lump sum A shares £5.000, B shares £50.000 Investment split: 100 per cent in investment trusts and closed-ended funds Isa link: Yes Pep transfers: Yes Charges: Initial up to 5%, annual A shares 1.75%, B shares 1.25% Commission: Initial up to 3%, renewal 0.5% Tel: 01392 217788

  • IMA greets Ucits move from Revenue

    21 May 2003

    The Investment Management Association has welcomed Inland Revenue proposals allowing Ucits schemes to be eligible for Isa investment.The Revenue is proposing a simple and transparent test for determining which types of fund qualify based on how much capital an investor could be certain to receive from the investment. The IMA says the decision comes following discussions between the trade body and the Revenue. 

  • IMA wants fund firms' view on financial reporting

    22 May 2003

    The Investment Management Association is calling for feedback from members on its new statement of recommended practice on the financial reporting of authorised funds. The IMA's SOPR, issued last week, offers recommendations on the contents of annual reports to unitholders, financial statements, half-yearly reports and accounts of funds, umbrella funds and sub-funds with different unit classes. In annual reports, the IMA is recommending there be a statement of net asset value ...

  • Independent view

    22 May 2003

    Do you ever get days when you just want to scream "I don't deserve this"? I still cannot understand why this industry of ours remains so adept at shooting itself in the foot with a consistent accuracy worthy of a Special Forces marksman. For years now, we IFAs have been whispering the mantra clients come first. IFAs remain a rare breed. It has become apparent recently that not many other sectors of the industry will go that extra mile to source the best deal for their client, ...

  • Inside edge

    22 May 2003

    "I know we have not sold any units of this fund for seven years but if we just hang on a bit longer, I reckon this one is going to come back into the spotlight and we will regret closing it." This plea or something similar is being made in many fund management marketing meetings every week in these market conditions. We are now three years into a bear market with industry sales having spiralled lower and yet we are still offering more than 2,000 funds to a public who are reeling from ...

  • Inter-Alliance to slash jobs in restructure

    22 May 2003

    National IFA Inter-Alliance has begun a round of redundancies following the completion of its corporate restructuring programme. Having completed the restructuring programme which saw the firm integrate 87 trading companies to reduce running costs, Inter-Alliance says it has "commenced rigorous rationalisation to significantly reduce the head count and amend our property strategy". The cuts are thought to include regional directors and other senior figures. Despite acquisitions ...

  • Investment view

    22 May 2003

    We must be in a bull market. I am not referring to the musings of the head of UBS who said he could smell the end of the bear market. Rather, it was our experience at Money Marketing Live at Olympia. For the only time I can remember, panel chairman David Harris got no further than asking the first prepared question. From then on, the audience took over. These panel sessions are valuable for the way in which they provide feedback on the attitude of the adviser market to investment in ...

  • Isis cuts through grease

    22 May 2003

    Isis Asset Management is backing a new guide aimed at wiping out small bribes known as "grease payments" for overseas government individuals. The High Cost of Small Bribes guide is being produced by international anti-corruption organisation Trace. It details steps that international businesses can take to eliminate facilitation payments. It says that "grease payments" are banned under UK law but are still legal in countries such as the US. Research by fund manager Isis into ...

  • Jonathan Polin

    22 May 2003

    A former tank commander who has spent a night in a Turkish prison, HSBC Asset Management managing director Jonathan Polin is no stranger to sticky situations. It is not that he actively seeks trouble - he joined his previous employer, Aberdeen Asset Management, when it was still very much the darling of the City - it is simply that he has a prodigious enthusiasm for taking on challenges which would not necessarily appeal to many of his peers. He arrived at HSBC not long after star ...

  • Julian Gibbs

    22 May 2003

    In my opinion, investment-grade corporate bond funds are one of the worst investments in current market conditions. This is for two reasons. First, investors can achieve better returns without any risk to capital by putting money on deposit with selected building societies and, second, when the economy recovers - and it will - equities are likely to go up by more and interest rates will rise too. This will mean that the capital value of investment-grade bonds will fall. However, Premier ...

  • Lamensdorf in receivership as Misys looks to sign up advisers

    22 May 2003

    Lamensdorf Group has gone into receivership and closed its doors to new business. The group and all its subsidiaries ceased trading last Friday (May 16), leaving staff to clear up after the bailiffs arrived at its head offices in Warwick Street in London's West End. At the start of May, chairman and chief executive Ken Newell told staff by email that they had not yet received their salaries for April because of "an acute cash shortage". The group had been holding out for ...

  • Loan Stars

    22 May 2003

    Financial services' finest gathered for last week's Money Marketing Live event at London's Olympia. A glittering array of politicians, regulators and people in shiny suits thronged to the event to flaunt their wares and their freebies. Some plied clients with soft toys and mirrors to see around corners while others hurled rugby balls. Not to be outdone by the investment and pension types, the mortgage boys brought on the dancing girls. The Queen lookalike making a ...

  • Look back in anger at structured set-up

    22 May 2003

    Despite mounting negative publicity, structured products continue to attract buyers like no other stockmarket-linked investment. Part of the reason is that almost all offer 100 per cent return of capital, barring some catastrophic event which could send stockmarkets tumbling by another 40 per cent or more. But the other reason is that their design has improved markedly over the past couple of years. Largely gone are the days when two-for-one downward gearing - a much-frowned upon feature ...

  • Making the vision work

    22 May 2003

    What will success look like when the Government's Pensions Green Paper changes have taken effect? People will be saving enough while in work to provide an adequate income when they are retired. People will be taking personal advantage of the UK's preferential pension savings regime. They will have emb-raced the principle of "self-help" and taken personal ownership of their own retirement provision. That is the vision anyway - but the question is, what needs to happen to make ...

  • Man bond unites hedge fund strategies

    22 May 2003

    Man Investments has introduced Man AP unison series 1, a capital guaranteed bond that invests in multi-manager hedge fund strategies.The Man AP product range was established more than three years ago with the introduction of Man-AP stratum. As many of the products in the range carry a capital guarantee, they tend to have a closed-ended structure. To keep investment opportunities open for investors, new bonds are issued and this is why Man AP unison series 1 was introduced.Glenwood ...

  • Marketplace aims two-year tracker at remortgages

    22 May 2003

    The MarketPlace at Bradford & Bingley is offering the remortgage market an exclusive flexible two-year tracker loan. The open plan loan, funded by Woolwich, has a current rate of 3.74 per cent and is guaranteed to be 0.01 per cent below the Bank of England base rate until July 2005. The rate then reverts to 1.5 per cent above the bank base rate for the remaining term of the loan. The mortgage is avail-able up to 90 per cent loan to value subject to a minimum of £25,001 ...

  • MFM Slater looks for hidden value

    21 May 2003

    MARLBOROUGH FUND MANAGERS MFM SLATER RECOVERY FUND Type: Unit trust Aim: Growth by investing in UK companies Minimum investment: Lump sum £3,000 Investment split: 100% in UK companies Isa link: Yes Pep transfers: Yes Charges: Initial 5.25%, annual 1.5% Commission: Initial 3%, renewal 0.25% Tel: 0845 6023095 The panel: Stuart Smith, Deputy managing director, R J Hurst & Partners, ...

  • Mind your Ps and Os

    22 May 2003

    This is my last article looking at the Inland Revenue's latest expressed views on husband and wife businesses where, in its view, one of the couple does more work than the other and the non-worker or undercontributor receives disproportionately high rewards. It is essential to remember that the two key factors that need to be present for the Revenue to have a chance of assessing the income on the worker are that there should be a "bounteous act" and that the "settlement" should ...

  • Misys makes the multi move

    22 May 2003

    Word on the street says there's a new multi-tie player in town - name of Sesame, also known as Misys - involving eight insurers. The price tag is thought to be £800,000 a year per provider for three years, or £19m, although Misys has always referred to past arrangements as marketing support. It covers protection, individual pensions and investment products but with no fund supermarket or corporate pension service. The move has massive implications because of ...

  • Misys shelves Pru tie until it wins back IFAs

    22 May 2003

    Misys is ruling out Prudential from its multi-tie plans, saying unless the provider has the support of IFAs it will not do business with it. The mega-network admits it has had talks with nine strategic partners about plans to create a multi-tie for aspects of its business and asked Norwich Union and the Prudential to take the design forward. But it now says that unless Pru can regain its credibility with IFAs by the end of the year after the critical-illness cover debacle, it will ...

  • MM survey shows 25-year WP values falling by 19%

    22 May 2003

    The trend in falling maturity values for 25-year with-profits endowments continues unabated, according to the latest Money Marketing Online with-profits survey. The survey shows that the average maturity value of a 25-year endowment with a monthly premium of £20 has dropped by 19 per cent to £27,707 from £34,371 last year. It also reveals that of the 20 life offices providing information on the number of endowment mortgages on track to meet target payouts, CIS ...

  • Mutual insurer serves up a piece of the PI

    22 May 2003

    IFAs have received their first good news since the professional indemnity insurance crisis escalated in the autumn of last year, with the FSA authorising a new PI insurer which plans to offer cover only to IFAs. The new player has been formed by the union of two existing underwriters, Magian and PI Direct. The former, which until Jan-uary was a PI insurer itself with a book of 750 clients, was bought by PI Direct which has now launched Magian Mutual. With ambitious aims to offer ...

  • NatWest shifts loan focus from estate agents to IFAs

    22 May 2003

    NatWest is shifting the focus of its lending arm towards the IFA market from estate agents. The bank says it plans to widen its parameters away from estate agents to encompass the lucrative IFA market. It currently gets 30 per cent of its business through IFAs and hopes to increase this figure to at least 50 per cent. It is aiming at IFAs networks, mortgage networks and mortgage clubs rather than individual IFAs. Although remortgaging will be part of the new agenda, the ...

  • New chairman at Winterthur Life

    21 May 2003

  • North beats South for real wealth

    22 May 2003

    The North beats the South as the region with the most real wealth in England and Wales, according to latest research by Barclays. Researchers from Barclays' wealth management arm Barclays Private Clients combined details of their eight million customers' average salary with the National Office of Statistics' cost of living figures. It found that people living in the North had the most disposable income left over from their salary after the cost of living was deducted, ...

  • nvesta focuses for three years

    27 May 2003

    nvesta has established a capital-protected bond linked to the FTSE 100 index for a three-year term.The nvesta FTSE focus secure plan allows investors to choose annual income of 7 per cent, monthly income of or growth of 21 per cent at the end of the term. Investors will get their original capital back at the end of the term provided the FTSE 100 index does not fall by more than 35 per cent during the last 16 months of the term.The return is calculated by comparing the closing ...

  • Out of context

    22 May 2003

    •"I thought she'd come to take back my OBE back." - Pensions guru Stewart Ritchie, on spying the Queen lookalike at the Money Marketing Live event. •"I'm going to slap the baby oil on and fry." - Bates Investment's Kerry Nelson. •"Just a bit of olive oil and we're off." - Mainland PR Kat Milne on the secrets of successful sun tanning. •"I'm living proof that you can't fool all of the people all of the time." - Scottish Life's James Gilchrist. •

  • Outside edge

    22 May 2003

    There are now more than 2,100 mutual funds available in the UK - a classic example over the years of marketing hype replacing common sense. Of course there are too many funds and Isis is the latest group to announce a reduction in its retail range from 55 funds down to 31. Interesting research from management consultancy Mercer Oliver Wyman indicates that around 55 per cent of retail funds on offer in the UK are uneconomic. It points out that any fund with less than £40m ...

  • Paragon moves into commercial loans

    21 May 2003

  • Performance fees plan in fund rules' shake-up

    22 May 2003

    The FSA is proposing allowing the use of performance fees as part of a radical overhaul of rules governing collective investment schemes which it hopes will boost UK competitiveness and innovation. In its consultation paper, The CIS Sourcebook - A New Approach, the FSA seeks views on plans to allow greater flexibility in design and management of funds so managers can run money more efficiently. In particular, the regulator is seeking to introduce unit classes for unit trusts - ...

  • PI pledge on cover in 'problem' areas

    22 May 2003

    Magian Mutual, the newly FSA-authorised professional indemnity insurer, has pledged not to exclude IFAs simply because they have exposure to products such as mortgage endowments, split caps or structured products. Speaking to Money Marketing after its authorisation last week, Magian Mutual director Glyn Morris says he will not turn down a firm just because it has sold certain types of products under FSA scrutiny. He says it is much more relevant how long the firm has been in business, ...

  • Please don't kill off kilt tradition

    22 May 2003

    Months after the Money Marketing awards, we hear of concerns being voiced North of the Border that no one is wearing formal Highland dress any more at the illustrious awards ceremony. A certain Ken Hogg of Aegon is known to have told some of his colleagues that he was one of the few to bother this year and may not do so next year. The Diary says no, no, no. Without Highland dress, the awards would not be the same and there are a least 100 benefits both for the wearer and those ...

  • Policy panorama

    22 May 2003

    The Money Marketing Online with-profits survey 2003 reveals the vast majority of some major life offices' endowments are now in shortfall. It shows that 99 per cent of Prudential's 210,000 endowments are not on track to meet their target payouts. Of AMP Pearl's 111,451 endowments, a massive 90,702 (81 per cent) are not up to policyholders' previous expectations. The survey asked life offices for the number of endowment policies in force at April 1 and the number facing ...

  • Product matters

    22 May 2003

    Scottish Life launched its new range of pension plans on May 1. Exclusive to IFAs, the aim is to provide products that meet our requirements in today's pension market either within or outside the 1 per cent cap. All plans are mono-charged, including a most welcome section 32 plan. Unlike most providers, "big" fund discounts apply from a surprisingly low figure of just £5,000 on the individual pension. The rebates reduce at regular levels and can result in the annual management ...

  • Pru's goose is cooked

    22 May 2003

    Dear Prudential. Well, whoopeedoo. £75 for three months of phone calls and getting lied to by the Pru ("You will definitely receive terms by this Friday" or "Well, definitely by next Friday" or "I don't know why it hasn't been done but I will get right on to it" or the old unfaithful "You should hear something by close of business today"), only to end up with up to a 60 per cent hike in premiums, backdated to include cases which you were too disorganised to deal with in the ...

  • Rate expectations

    22 May 2003

    It is over a month since the introduction of statutory money-purchase illustrations, which require pension fund projections to be based on a single assumed growth rate of 7 per cent rather than 5, 7 and 9 per cent. I believe this to be a backward step. If the pension is invested largely in cash funds, there is no way a growth rate anywhere near 7 per cent can be achieved, at least in the short to medium term. Conversely, a reasonable argument could be made for significantly higher ...

  • Revenue loses appeal over trust case

    21 May 2003

    The Inland Revenue has lost a Court of Appeal case in which it tried to prevent life companies including Scottish Equitable and Skandia from offering spouse alienation trusts. The Court told the Revenue last week it must seek legislative change from Parliament to prevent the trusts - which allow spouses to sidestep reservation of benefit rules - being sold to clients of IFAs. 

  • Rock of ages

    22 May 2003

    Pop-pickers, the Diary would like to draw readers' attention to a little-known soft-rock god moonlighting on the Midlands airwaves. When he's not lurking in the murky underworld of critical-illness insurance, Unum Provident's PR guru John Hutson likes nothing better than classic rock DJ-ing on local radio. He has a three-hour - yes that's three hours - regular Sunday show on BBC Hereford, Worcester, Shropshire and Stoke. King of the airwaves Hutson, who grew up ...

  • Schroders - SAIF Blue Mountain Fund

    27 May 2003

    Type: Fund of hedge funds Aim: Growth by investing in a portfolio of between eight and 12 hedge funds Minimum investment: Lump sum $50,000 Place of registration: Luxemburg Investment split: 100% in a portfolio of between eight and 12 hedge funds Charges: Annual 1% Commission: Subject to negotiation Tel: 020 7658 6000

  • Schroders Private Bank - Private Equity Fund of Funds II

    21 May 2003

    SCHRODERS PRIVATE BANKPrivate Equity Fund of Funds IIType: Investment trustAim: Growth by investing in a portfolio of 15 to 20 European and US private equity funds.Minimum investment: Lump sum euros 125,000Investment split: 100% in a portfolio of 15 to 20 European and US private equity fundsPlace of registration: DublinCharge: Annual 1.25%Commission: NoneTel: 020 7658 6000

  • Service charges

    22 May 2003

    I personally concur entirely with the views expressed in Len Warwick's recent article (Money Marketing, May 1). As far as I understand the matter, service and administration by insurance companies are outside the remit of the FSA and, if this is the case, I think we should campaign for a change in its stance. With very few exceptions, insurance companies provide lousy after-sales service, usually at head office rather than locally. In my opinion, there has been a continuous deterioration ...

  • Shareholders facing big losses as firm collapses

    22 May 2003

    The collapse of the Lamensdorf Group could lead to the loss of millions of pounds by shareholders and employees. Some individual investors are believed to have had more than £1m invested in the firm while many others are each believed to have holdings running into tens of thousands of pounds. Prior to Lamensdorf's closure, some individual shareholders were in discussions with solicitors to take legal action against the firm but they now say they have little recourse but ...

  • Skandia launches wrap account for IFAs

    21 May 2003

  • Smaller company fund sectors to be tightened up

    22 May 2003

    Changes in the definitions of smaller company sectors are being proposed by the Investment Management Association after discovering that many funds are not operating within the set parameters. Sector monitoring by the IMA has found that many fund managers are breaching definitions which restrict funds to invest in companies falling under certain market capitalisation percentages. The IMA believes that liquidity discrepancies and differing interpretations of smaller companies are the ...

  • Standard ditching endowment savings plan

    22 May 2003

    Standard Life is scrapping its long-ailing endowment savings plan as part of an ongoing rationalisation of its product range. The company stopped processing quotes for the product last week and will not take new business after June 17. It says it will not allow top-ups to existing plans after this date. The move does not affect its mortgage endowment plans. Towry Law product research manager Simon Farrant says the endowment insurance product was Standard Life's small endowment ...

  • Stars among exodus in Invesco's Henley move

    22 May 2003

    Twenty-six investment professionals, including star fund managers Claire Griffiths and David McGillveray, are leaving Invesco UK as part of the group's move to combine its investment operations in Henley-on-Thames. Following its decision last week to realign the business into the core functions of investments, distribution and operations, Invesco is relocating its investment management team to Oxfordshire, with the loss of 11 fund managers and 15 other investment specialists. Its ...

  • Swip's Wylie rules out providers' PI subsidy

    22 May 2003

    There is no case for product providers to subsidise IFAs' professional indemnity insurance costs, according to Scottish Widows intermediary & partnership director Robert Wylie. Speaking to Money Marketing this week, Wylie ruled out provider financial involvement in the PI crisis, saying it would not make commercial sense even if the economy was doing well and certainly not at a time when belts are being tightened across the industry. Wylie defended Widows' decision to ...

  • Talkback

    22 May 2003

    "I think that the ombudsman decisions are very much loaded in favour of the complainant.I don't think its balanced at all." Keith Keely,Keith Keely IFA "Yes. I think they have a very narrow view on everything and that is imposed by the regulators." William Geller,Belvedere Insurance "Yes, to a certain extent. There have been lots of complaints in the industry that it has very much become a claim and compensation culture." Chas Holdaway,Holdaway Johnson Partnership "Yes. ...

  • Til dearth do us part

    22 May 2003

    I am a retired mechanical engineer in my early 60s and am being divorced by my wife. I have spent time working abroad and have changed employers a number of times so I have only a modest pension income. My wife, who is 10 years younger and actively employed, earns a considerable salary. We have used a mediation service rather than have a potentially expensive feud between solicitors. The result has been that she got the matrimonial home, I got our investment property and she has undertaken ...

  • Trixter gets on its bike

    21 May 2003

    Trixter is an enterprise investment scheme (EIS) investing in its range of exercise bikes that simulate the experience of riding outdoors on mountain bikes using technology.The company intends to market its products, for which it is seeking patents, to the retail and commercial sectors. This would enable people to use them in the gym or at home. In particular, Trixter intends to promote its first product, X-Bike, and develop two new products - X-Bike Interactive and XTRieM. ...

  • Warning on new FSA performance plans

    22 May 2003

    Fund managers are warning that the latest FSA proposals for use of past performance figures in ads could lead investors to buy at the top of the market. They claim the proposed use of five-year annualised returns would lead to investors shying away from investing when the market is low, which is when many should be considering investing. Under proposals in CP183: Standardising Past Performance, published last week, past performance information would have to show five-year, annualised ...

  • Wesleyan in advice deal for teachers

    22 May 2003

    Wesleyan Assurance Society is joining forces with the Nat-ional Association of School-masters and Union of Women Teachers to provide independent financial advice to more than 211,000 teachers across the UK. The service will be provided under the name Wesleyan Professional Advice through Professional Affinity Group Services which is Wesleyan's specialist IFA and general insurance arm. Wesleyan says teachers can use the service as part of NASUWT membership services which gives ...

  • What's in a name?

    22 May 2003

    By now you will all have heard, and no doubt already formed a view on Sesame, the new name for Misys Life and Pensions business. When any new brand is launched it provokes interest and I think Sesame is no different. But at a time of very tough market conditions, can we not move away from taking the Sesame name purely at face value. I joined this industry because I know it is more mature in its thinking. The name Sesame was arrived at through rigorous testing, in-depth feedback ...

  • When the going gets tough...

    22 May 2003

    While it would appear that many correspondents are upset at what has been a badly handled position by the Pru, there are two points that come to mind. 1: It is exactly this sort of strong, if unpopular, decision that has in the past led to the financial might of companies like the Pru. We should in hindsight applaud its decisive action on what was obviously an unsupportable rate cut (perhaps Pru should sack an actuary or two to bleed the wound and get a new PR department to boot). It ...

  • Widows cutting projection rates

    22 May 2003

    Scottish Widows is downgrading the projections on its with-profits endowment policies because it no longer believes the FSA-sanctioned rates of return are realistic. The company says this may mean that more policyholders receive red and amber letters but it says to continue using the FSA projections of 4, 6 and 8 per cent would leave it open to accusations of providing misleading information. Widows is writing to IFAs this week, telling them it will now be using projections of ...

  • Wig starts new search for Woman of the Year

    22 May 2003

    The Women's IFA Group is again embarking on its search for the Female IFA Of The Year. It says that in a predominantly male industry, the award sets out to demonstrate the success of women. Sponsored by Scottish Equitable, Wig launched the second annual award on May 20. Entrants can nominate themselves or their names are put forward by colleagues and they are then invited to submit a 500-word resume about themselves. The judges, including last year's winner Horn-buckle ...

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