Money Marketing
23 January 2002

  • 'Customer demand for flexibility boosting Sipp sector'

    24 Jan 2002

    Demand for more flexible pension investment options is driving growth in the self-invested pension market, according to third-party administrator PPML. Its research looking at a cross-section of current and potential Sipp providers found that the ability to take control of contributions is attracting customers. Investors who are reluctant to place their pensions with one provider are also opting for Sipps. PPML says the range of investments now available under a Sipp are extensive ...

  • 'Fee increase may see 10% leave DBS'

    24 Jan 2002

    DBS could lose up to 10 per cent of its members in the wake of last month's 30 per cent fee hike, says a City analyst. It claims Misys' IFA operations will be hit by increased competition from IFA service providers such as Bankhall getting significant backing from major product providers. The Commerzbank analyst's report, seen by Money Marketing, warns passing on compliance costs of N2 will be met with resistance and "could see 10 per cent of its membership leave the network". It ...

  • 'FSA is not coercing IFAs'

    24 Jan 2002

    "Polarisation is dead. Long live independent advice!" might well be the rallying cry for some IFAs once they have studied for themselves the FSA's proposals for reforming polarisation. As companions to the consultation paper, we have published three research reports. They cover the consumer research, the extent of commission bias and the process by which IFAs select products and providers. The consumer research carried out for the FSA as part of its review of polarisation showed ...

  • 'IFAs sell cheaper products than tied salesforce rivals'

    24 Jan 2002

    IFAs are demanding that the FSA gives more weight to its own research for CP121 showing they sell cheaper products than their tied salesforce rivals. Although the research identified some IFA commission bias in relation to with-profits and distribution bond sales, overall, it shows that IFAs provide consumers with better-value products. IFAs question how the regulator can deduce that consumer detriment is minimised by introducing reforms which will lead to a reduction of the IFA ...

  • A capital idea

    24 Jan 2002

    I am a higher-rate taxpayer with a capital gains tax liability arising this year. I have heard people talk about various tax-saving schemes and wondered if you could briefly outline the main schemes and explain how the tax reliefs work. During the 1990s, a number of initiatives were enacted to encourage investment into qualifying unquoted companies. These are basically companies that carry out a qualifying trade and that are not listed on the main stockmarket. Companies ...

  • A matter of choice

    24 Jan 2002

    "Choice" has been the maxim for the first few weeks of 2002. While there has been a whirlwind of policy issues since the start of the year and it is difficult to know which way to face, my agenda has been dominated by two major events. What are they? Well, it will not take readers too long to guess. Annuities and polarisation are at the top of my in-tray at the moment - and look set to remain there for several months to come. Both appear to be about "choice". First, polarisation. ...

  • A tighter grip

    24 Jan 2002

    The terrorist atrocities in September provoked a raft of responses, including the need to apportion blame. The finger was pointed at the financial world in general - and offshore centres in particular. Accusations of handling terrorists' finances flew thick and fast as well as some ill-informed judgements about what was and was not permissible in various international financial centres. For those centres with nothing to hide, the increased scrutiny is perhaps no bad thing - ...

  • Advice will still be poles apart

    24 Jan 2002

    When talking of consumers' interests, the FSA should consider the following - ll insurance and investment policies are legal contracts entered into by two parties - the provider, who devises the contract, and the client. It is not contentious to say that anyone entering into a legal contract without first taking professional advice is being silly. For prudent consumers,a genuinely independent adviser is the only acceptable distributor of financial products. By tabling proposals ...

  • Advisers say multi-ties will spark a rise in commission

    24 Jan 2002

    IFAs are predicting a rise in commission under a multi-tie regime as product providers look to secure their market share amid confusion over the willingness of the FSA to intervene. The prediction comes as the FSA says that it will monitor multi-tied firms and product providers for breaches of the overriding commission rules but it refuses to stipulate at what stage they could be violated. The rules prevent product providers paying "undue" levels of commission to advisers but IFAs ...

  • Amex unites advice and online trading

    24 Jan 2002

    American Express is incorporating its independent financial advice arm with its fund supermarket and sharetrading platform Sharepeople, making it one of the first platforms to bring together advice and online trading. Amex has 10 IFAs available to Sharepeople customers over the phone. The firm is believed to be looking to expand its IFA business following discussions last year with a number of IFAs including Inter-Alliance. AMP, which owns IFA Towry Law and fund supermarket Ample, ...

  • Annuity reform plans are doomed to fail, says ABI

    24 Jan 2002

    All three proposals to reform the annuity regime are unlikely to succeed because they fail to address key Government concerns, claims the ABI in its quarterly insurance review. In the article - Reforming Annuities: Big Bang or Softly, Softly? - the ABI says it is unlikely that any of the three proposals will be satisfactory to the Treasury because they do not meet its standards for being revenue-neutral and being effective for everyone. The article, written by ABI senior economist ...

  • Autif research refutes FSA's anti-performance position

    24 Jan 2002

    Autif dealt another heavy blow to the FSA's anti-past performance stance this week with new research revealing that performance figures can play a crucial role in fund selection. The research, carried out by financial consultancy Charles River Associates, analysed the findings of 29 past performance studies carried out over the last three decades. It concluded that while past performance is only a weak indicator when trying to pick top-performing funds, it is a valuable tool ...

  • Axing polarisation will be last straw for many advisers

    24 Jan 2002

    Many thanks for the rapid distribution of the news. Just when the public were getting to grips with the current polarisation structure, our regulatory friends at the FSA have had to find something to tamper with so that they could justify their employment. Oh well, resigned as we are to constant change, we will just have to get on with it. The sad thing is that many perfectly good advisers doing a marvellous and highly valued job for their clients might feel this is the very last straw ...

  • Bad losers

    24 Jan 2002

    What a gutless, self-centred industry we work in. Don't kid ourselves. Depolarisation is driven by banks, building societies and providers which are losing market share to the independent sector and do not like it. The motto is if you cannot beat them, change the rules and do not give a toss for the consumer. As for the Government, its hypocrisy is breathtaking. Isn't it the party that is supposed to be sticking up for the consumer? My eye! Charles Mullins Partner, By ...

  • Bad timing

    24 Jan 2002

    Last week, I looked at the possibility that some sales of private trading businesses may have been held up pending April 6, when 75 per cent business assets taper relief and an effective capital gains tax rate of 10 per cent for a higher-rate taxpayer will be available for disposal of qualifying assets where the disposer can satisfy a two-year ownership condition. My thought was that this may release funds for investment and that advisers should be reasonably well informed on both ...

  • Bill of health

    24 Jan 2002

    I read recently that the private member's bill calling for amendment of the law requiring the compulsory purchase of annuities by no later than the age of 75 has cleared another hurdle, despite Government opposition. On just what grounds? While we all know that an annuity is guaranteed for life, the level of that guaranteed income is now such poor value for money that nobody in full possession of the facts (or their mental faculties) would commit money to an investment product which ...

  • Bless this spouse

    24 Jan 2002

    The spouse-interest trust is perhaps the ultimate in flex-ible inheritance tax planning, addressing the key planning issue of access to capital or income if the client's circumstances change. But does it work? The Inland Revenue thinks not but its first challenge has failed. Inheritance tax is said to be a voluntary tax. This is true to the extent that you can afford to make lifetime gifts. No inheritance tax is charged on gifts to an individual (or to a settlement other than one ...

  • Britannic boss quits after two months

    24 Jan 2002

    Britannic Group chief executive Danny O'Neil is stepping down after two months in charge for personal reasons. His resignation comes as the group announces an £800m jump in new business to £2.2bn last year from £1.4bn in 2000 on the back of mortgage and retirement product sales. O'Neil, who has nine-year-old triplets and an 18-year-old daughter, says he is leaving to spend more time with his family. He will continue as a consultant to the group and bec- ...

  • Brown announces April budget

    29 Jan 2002

    Chancellor Gordon Brown will present his next budget to the nation on April 17, the first April budget in nearly a quarter of a century.In an answer to a written question in the House of Commons, Brown announced the date for his next budget.

  • Bureaux sets up new arm for LTC advice

    24 Jan 2002

    Specialist London IFA firm The Bureaux is setting up a new arm, The Care Funding Bureau, to offer advice on planning for long-term care. The new business operates alongside The Annuity Bureau and The Drawdown Bureau. The CFB says LTC is a complex issue and needs specialist advice. It has three advisers and plans to go up to 10. It believes LTC funding advice is a major market, with more than a quarter of people over 65 needing care. It says even those getting the maximum state ...

  • Burston joins Penrose

    24 Jan 2002

    Former Sunday Business journalist Claire Burston has become an associate director of financial public relations company Penrose Financial. Burston leaves Sunday Business, where she was editor of its Sunday Investor section, after a career in journalism of over a decade. She started her financial journalism career at Money Marketing where she became investment editor after spells on local Surrey newspapers and the Edinburgh Evening News. She has also worked for the Mail on Sunday. Penrose ...

  • Call on clients to campaign for commission

    24 Jan 2002

    There has been much vitriolic comment and angry reaction from IFAs (including myself) in response to the FSA's ill-advised proposals regarding IFA commission and the changes to polarisation. With the exception of a few fee-based IFAs, who have my respect, most of the IFAs and industry commentators I have spoken to seem to be singing from the same hymn sheet on the commission issue. Now that we have all vented our spleens to the trade press, I suggest that, for once, instead of just ...

  • Carry on, cowboy?

    24 Jan 2002

    "It was like the Wild West - everyone was out for themselves. If you had a problem with a broker, all you could do was break his legs." This is how Scottish Life director of sales Jim Gilchrist remembers life as a financial adviser before the advent of polarisation. Now that the FSA is recommending the abolition of the polarisation regime, which gave birth to IFAs and has defined the distribution of financial products for the last 13 years, minds are going back to what life was like ...

  • Churning fears as FSA reveals multi-ties face losing clients

    24 Jan 2002

    Multi-tied advisers will have to relinquish their existing clients with products outside their ties to IFAs or become tied to the entire market, says the FSA. The regulator's stance should substantially increase the number of IFAs opting merely to change their title to distributor but remain free to provide advice on the entire market. Such a move would also allow advisers to continue to receive commission, easing fears they would have to switch to a defined-payment system. ...

  • CIS launches care service

    28 Jan 2002

    CIS has launched a care planning service to provide extra support to its Critical Illness policyholders.

  • Clive Boothman

    24 Jan 2002

    Lives: Wandsworth, London. Born: May 28, 1955, London. Education: BA in politics philosophy and economics at Trinity College, Oxford. Went to school at Charterhouse in Surrey. Career: Began as a trainee chartered accountant at Ernst & Young in 1981. Joined Schroders as a research analyst for the investment division in 1983. In 1987, took charge of rebuilding Schroders' retail mutual fund business. Chaired Autif between 1995 and 1997 and also served on the board of Lautro ...

  • CML warns borrowers over rises in rates

    24 Jan 2002

    Mortgage borrowers should take steps to ensure themselves against increases in interest rates and rising unemployment over the coming year, says the Council of Mortgage Lenders. Following a £1.4bn fall in gross mortgage lending last month, the CML says borrowers should ensure they are able to make mortgage repayments if the global slowdown means they lose their jobs. CML director-general Michael Coogan says he expects the housing and mortgage markets to grow less strongly ...

  • Coalition must be quick to respond on polarisation

    24 Jan 2002

    With the launch of consultation paper 121 last week, the FSA has drawn a line in the sand, positioning itself very firmly on the side of the abolition of polarisation. The report went much further than anyone really expected. In addition to polarisation, it has also proposed radical reforms for commission, disclosure and the better than best rules. The 100-plus page paper, Reforming Polarisation: Making the Markets Work for Consumers, to which responses are due back by April 19, ...

  • Cofunds says it will unwind exclusivity pact

    24 Jan 2002

    Cofunds is set to unwind its exclusivity agreement which prevents its founders joining rival IFA platforms, according to new chief executive Clive Boothman. In an interview with Money Marketing, Boothman says he believes the pact, which covers Gartmore, Jupiter, M&G and Threadneedle, has now served its purpose and should be phased out before the end of the year. Fidelity says that such a move would reverse its decision not to join Cofunds. Boothman maintains that the providers ...

  • Commission cap would solve all the FSA's concerns

    24 Jan 2002

    I have now read the report off the FSA website and it appears to me that the one concern which came across from it was that some IFAs are influenced by commission amounts available from the product providers. That, to me, is all there is to it. So why they have spent so much time and money researching the whole provision of advice defeats me. Surely, all that is required is to make all commission amounts the same, say, 3 per cent plus 0.5 per cent renewal to cover continuing advice ...

  • Consult? More like insult

    24 Jan 2002

    In the past, I have been an advocate of responding to consultation documents issued by Government or regulator. After all, I think it rather hypocritical not to respond and then to complain about changes after they have been made. However, it is not my intention to respond to the latest consultation document issued by the FSA on reforming polarisation. I have, sadly, concluded that there is no point. The tone and inference of the document demonstrate that the important decisions have ...

  • Coventry Building Society appoints finance director

    29 Jan 2002

  • Cut against the bias

    24 Jan 2002

    One of the primary arguments made in the FSA's consultation paper 121 which proposes scrapping polarisation is that there is commission bias at work in the IFA sector. It uses this as justification for a radical overhaul of the way that independent advisers are remunerated, which would force IFAs to charge fees and rebate commission. However, the proposals do not prevent tied or multi-tied advisers from operating on a commission basis. Research by consultancy Charles River ...

  • Dirty Laundry

    24 Jan 2002

    In the context of the financial war on terrorism, FSA chairman Howard Davies warned offshore centres in late September that they would be expected to do more to demonstrate that they are meeting international standards of best regulatory practice. This reflects sentiment expressed by Gordon Brown about information exchange, as well as President Bush's comments regarding the need to change money laundering rules in Europe. How does this affect offshore providers? It is worth ...

  • Dresdner investment trust flys the flag

    24 Jan 2002

    Dresdner RCM British Portfolio TrustProduct Details:Type: Investment trust.Aim: Income and growth by investing in UK equities.Minimum investment: £1,500.Maximum investment: No maximum.Investment split: 100 per cent in UK equities.Types of share: Ordinary.Isa link: Yes.Pep transfers: Yes.Redemption date: None.Charges: Annual 1 per cent.Commission: Initial up to 2 per cent.Tel: 08457 ...

  • DTI commits £5m to addressing the work-life dilemma

    24 Jan 2002

    The Department of Trade and Industry is spending £5m to address what it calls the work-life balance problem. The cash will help companies to implement policies that deal with long hours, rigid shift patterns and absenteeism, which the DTI says hit productivity. The Work-Life Balance Challenge Fund provides free consultancy support worth up to £55,000, allowing organisations to implement imaginative policies and practices in their workplace to boost performance. The ...

  • Editorial: FSA's blow for class system

    24 Jan 2002

    Congratulations to the FSA and the Labour Government for striking a blow for the beleaguered British class system with a neo-feudal system of financial advice. The barons get fee-charging independent financial consultants, the squires and knights, that's you, Sir Howard, see fee-rebating IFAs. Middle England's freeholding farmers get commission-charging distributors and freedmen have gap-filled banks. The serfs have the Utopia of generic advice. In reality, the peasants as ...

  • Equitable policyholders vote yes

    28 Jan 2002

    Equitable Life policyholders have given their backing to the compromise scheme which caps its £2.6bn guaranteed annuity liability.98.1 per cent of those with Gar policies voted in favour, while 99.2 per cent of non-Gars also said yes.The successful vote clears the way for a £250m injection into the fund from Halifax, which owns Equitable's operating facilities.It also means non-Gars have to relinquish their right to sue the society for misselling.

  • Equitable still to face legal action

    28 Jan 2002

    Thousands of policyholders will pursue legal action against Equitable despite its compromise scheme being passed by members, says a law firm acting on their behalf.

  • Fears over defined payment hitting independent sales of regular-premium pensions

    24 Jan 2002

    IFAs are warning that the FSA's proposals for a defined-payment scheme could blight independent advice on sales of regular-premium pensions. The FSA wants 'independent advisers' to use a defined-payment system of rebating or offsetting commission in exchange for a pre-agreed fee. IFAs say the remuneration on regular premiums, particularly under stakeholder schemes, are not high enough to offset against a fee. Advisers believe an that up-front fee would be prohibitive ...

  • Fears that small mortgage firms will be casualties

    24 Jan 2002

    While some of the mortgage industry see no cause for alarm in the FSA's sweeping proposals to scrap polarisation, others are warning it will drive small brokers from the market. The mortgage sector is in many ways in a state of limbo waiting for meat to be put on the bones of the Treasury's surprise announcement in December that the FSA will regulate mortgage advice from 2004. Britannic Money chief executive Tony Ward says: "The lower-income end of the market may lose out ...

  • Fidelity finds its business as usual for most advisers

    24 Jan 2002

    The retail investment community seems relatively relaxed about last week's announcement that polarisation is for the chop. While most say that they are supporters of IFAs and the status quo, there has been an overwhelmingly pragmatic response from fund managers and investment IFAs. In a survey carried out by Fidelity last week, 80 per cent of IFAs said they had already made initial plans for a post-polarisation era. Just 4 per cent say they would opt for more restricted multi-ties. The ...

  • Franklin Templeton Investments - Franklin Japan Fund

    23 Jan 2002

    Wednesday, January 23, 2002. Type: Ucits. Aim: Growth by investing in Japanese equities. Minimum investment: $5,000 or currency equivalent. Place of registration: Dublin. Investment split: 100 per cent in Japanese equities. Isa link: Yes. Charges: Initial up to 5 per cent, annual 1.5 per cent. Commission: Initial 3.5 per cent, renewal 0.5 per cent. Tel: 020 7925 7171.

  • Franklin Templeton Investments - Franklin Sterling Corporate Bond Fund

    23 Jan 2002

    Wednesday, January 23, 2002. Type: Ucits. Aim: Income and growth by investing in sterling corporate bonds. Minimum investment: $5,000 or currency equivalent. Place of registration: Dublin. Investment split: 100 per cent in sterling corporate bonds. Isa link: Yes. Charges: Initial up to 5 per cent, annual 1.5 per cent. Commission: Initial 3.5 per cent, renewal 0.5 per cent. Tel: 020 7925 7171.

  • Franklin Templeton Investments - Franklin US Equity Fund

    23 Jan 2002

    Wednesday, January 23, 2002. Type: Ucits. Aim: Growth by investing in US equities. Minimum investment: $5,000. Place of registration: Dublin. Investment split: 100 per cent in US equities. Isa link: Yes. Charges: Initial up to 5 per cent, annual 1.5 per cent. Commission: Initial 3.5 per cent, renewal 0.5 per cent. Tel: 020 7925 7171.

  • Franklin Templeton Investments - Mutual Shares II Fund

    23 Jan 2002

    Wednesday, January 23, 2002. Type: Ucits. Aim: Growth by investing in US equities and global equities. Minimum investment: $5,000 or currency equivalent. Place of registration: Dublin. Investment split: US equities 80 per cent, global equities 20 per cent. Isa link: Yes. Charges: Initial up to 5 per cent, annual 1.5 per cent. Commission: Initial 3.5 per cent, renewal 0.5 per cent. Tel: 020 7925 7171.

  • Franklin Templeton Investments - Templeton EuroMarket Growth Fund

    23 Jan 2002

    Wednesday, January 23, 2002. Type: Ucits. Aim: Growth by investing in Euroland countries. Minimum investment: $5,000 or currency equivalent. Place of registration: Dublin. Investment split: 100 per cent in Euroland countries. Isa link: Yes. Charges: Initial up to 5 per cent, annual 1.5 per cent. Commission: Initial 3.5 per cent, renewal 0.5 per cent. Tel: 020 7925 7171.

  • Friends Provident - Protected Global Growth

    28 Jan 2002

    Monday 28 January, 2002.Type: Unit linked fund.Aim: Growth by investing in fixed interest securities, futures and options.Minimum investment: Lump sum £5,000.Investment split: Fixed interest securities 80 per cent, futures and options 20 per cent.Charges: Annual 1.5 per cent.Commission: Choice of initial 5.25 per cent or initial 3.25 per cent, renewal 0.5 per cent.Tel: 0845 7573036.

  • FSA releases finance pack for students

    28 Jan 2002

    The FSA has launched a resource pack for teachers providing personal finance education tools for students.

  • FSA wants trees to be updated annually

    24 Jan 2002

    Decision trees are to be updated every year in line with changes in the Budget, according to proposals by the FSA. In the consultation paper entitled, Stakeholder Pensions: Maintaining Decision Trees, the FSA sets out how it wants to keep decision trees up to date and accurate. It suggests that trees are updated annually to incorporate Government policy on income tax rates, basic state pension and pension credits. The review process will begin from the pre-Budget speech in ...

  • FSA welcomes compromise vote

    28 Jan 2002

    The FSA has called the successful vote of the Equitable compromise by its members a "good step".

  • Fund offers for the Isa season

    24 Jan 2002

    First State Investments is to offer a 0.5 per cent discount on all investments of £5,000 into its British mid-cap fund. The discount will run from the fund's launch on February 11 until the end of the tax year and will reduce the initial charge to 3.5 per cent from 4 per cent. Annual management charge is 1.4 per cent. Artemis is offering a 1 per cent discount on all Isa and Pep transfers into its income fund before March 1. The discount will reduce the initial charge ...

  • Granny's identity crisis

    24 Jan 2002

    Nothing could be simpler, you would think. Granny wants to pay £1,000 into a stakeholder for her grandchild. Just send me the form to sign, she says to the pension provider, and I will send you the money. If only things were that simple. First of all, the Inland Revenue requires stakeholder to be taken out by the grandchild's legal guardian, normally one of the parents. So, the application form has to go to the parent, even though granny is paying the contribution. So far ...

  • Guaranteed bonds 'not living up to name'

    23 Jan 2002

    Guaranteed bonds that aim to protect investors from fluctuating stockmarkets do not always live up to their name, according to the latest issue of Money Marketing Focus Survey.

  • Hargreaves predicts Equitable exodus

    28 Jan 2002

    Hargreaves Lansdown is predicting a flood of mis-selling claims from former Equitable Life policyholders now the compromise scheme has been agreed. It is expecting policyholders to leave in their droves once High Court approval to the scheme is given and that mis-selling claims from policyholders who have already left will begin. It also expects the market value adjuster to increase to stem the tide of those leaving and the future of the long term fund is still in doubt.

  • IFAP publishes endowment guide

    23 Jan 2002

    IFA Promotion is publishing a factsheet for consumers worried about the performance of their endowments.

  • IFAs by any other name

    24 Jan 2002

    Hey, everyone, relax. This is a consultative paper so it is likely that the eventual changes will be different, anyway - they invariably are. But let us assume they are not. Everyone seems to have overlooked that sitting nicely in between the multi-tie and independent adviser is the "authorised" adviser (look at section four of CP121). You can still receive income on a commission basis and you can still look at the whole market when deciding on the choice of product for your client ...

  • In the pinks

    24 Jan 2002

    In my last two articles, I have started to look at the meaning and uses of information contained in the financial pages of the quality press. My last article concentrated on information relating to short, medium and long-term expectations on interest rates - a major influence on many aspects of a financial adviser's recommendations, for example, projecting future interest and annuity rates for drawdown and staggered vesting illustrations. This week, I am returning to the pages ...

  • Income funds lead the 2002 pack

    24 Jan 2002

    Despite all the worry that 2002 may not see an Isa season, the majority of fund management groups are treating this month like any other January. Ad spends are on the inc-rease, roadshows are in the pipeline and product launches are in abundance. In the coming weeks, more than 10 new funds are set to hit the shelves. While these will cover a broad range of sectors and mandates, it would seem income is quickly emerging as the dominant theme to the 2002 season. Property, bond ...

  • Independent view

    24 Jan 2002

    In January 1962, I entered Commercial Union's head office to begin a career in financial services. Forty years later, I look back on five decades of change and challenge. 1960s. Started in the claims department, witnessing that - for pennies - families and businesses can be held together, children educated, mortgages paid, retirement income provided and jobs safeguarded in spite of death or illness. What a special business. Remember this simple truth? Many knowledgeable colleagues ...

  • Industry has come full circle

    24 Jan 2002

    What's it all been about, then? The regulatory about-turn over polarisation certainly prompts me to wonder whether anything has been achieved as a result of the mountain of rules and regulations heaped on financial advisers since I first became a financial journalist back in 1978. At that time, the Insurance Brokers' Registration Act was coming into force and the Financial Services Act was still around eight years away. In 23 years of writing about the industry's ...

  • Investment analysis

    24 Jan 2002

    Poor corporate results, predominantly from across the Atlantic, saw global markets end the third week of the new year lower despite some positive US economic data. The representative FTSE World index shed a further 1.7 per cent last week. In the US, stocks fell after corporate results from IBM and Microsoft put Wall Street in a selling mood on Friday. Earlier in the week,selling pressure was also seen after industry leader Intel announced poor last-quarter earnings and a reduction ...

  • Investment view - Brian Tora

    24 Jan 2002

    "So, apart from that, Mrs Lincoln, how did you enjoy the play?" This clearly apocryphal question resonates with the attitude of those asking IFAs what they think of the impending end of polarisation. I know this initiative from the regulator is last week's story but it will run and run. Make no mistake, we are about to see a fundamental change in the way in which financial products are distributed. Only time will tell whether the man in the street benefits as a consequence. Despite ...

  • Invitation to Davies

    24 Jan 2002

    I recently sent the following letter to Sir Howard Davies and thought you might be interested in my invitation. I wonder if Sir Howard will take up my offer? "Dear Sir Howard. As a partner in a small town practice of independent financial advisers, I am writing to extend an invitation for you to spend a day or perhaps more with me in order to understand why your plans to change the current polarisation regime will not benefit the consumer. I look forward to hearing from you." Christopher ...

  • It all ends in tiers

    24 Jan 2002

    Tick a box - single-company financial adviser, multi-company financial adviser, independent financial adviser or independent financial consultant adviser. According to the proposed status disclosure document attached to CP121, in which the FSA proposes the scrapping of polarisation, this will be an adviser's first act on meeting a new client. Black and white will be replaced by many shades of grey. Many IFAs, with the notable support of the Consumers' Association and some ...

  • Julian Gibbs

    24 Jan 2002

    The FSA and other regulators have generally performed a good service for the financial services profession and have managed to get rid of nearly all the rogues and the fools as well as helping to improve standards. However, the FSA's new ideas on abolishing polarisation are totally mad in that the consumer will now become even more confused. In an ideal world, the idea of consumers paying for financial advice is worthy but the FSA, unfortunately, does not consist of executives ...

  • Lazard Asset Management - Lazard Alpha Isa

    25 Jan 2002

    Friday, January 25, 2002. Type: Oeic maxi Isa. Aim: Growth by investing in the UK alpha and European alpha funds. Minimum investment: Lump sum £2,000. Maximum investment: £7,000. Catmarked: No. Investment choice: UK alpha fund and European alpha fund. Charges: Initial 3.75 per cent, annual 1.5 per cent. Special offer: Initial charge reduced to 3.5 per cent. Offer period: Until April 30, 2002. Commission: ...

  • Legal aspect

    24 Jan 2002

    One very brief question. Currently, the Institute of Chartered Accountants and the Law Society only permit their members to deal with IFAs. It would be interesting to know whether they will in future deal with the new authorised advisers as well as IFAs? As far as I can tell, the new IFA will have a prescribed method of remuneration. The authorised IFA, while still being able to access the whole market, will be remunerated by commission. but there is nothing to stop him charging ...

  • Legal threat hangs over Equitable rescue plan

    24 Jan 2002

    Equitable Life's rescue plan could be under threat from a legal challenge which may mean thousands of members of group pension schemes are still entitled to guaranteed annuities. City law firm Linklaters says its clients in the unidentified schemes could still be elig-ible for guaranteed annuities after an Equitable member queried the conditions of the society's compromise scheme. Linklaters believes that pension fund trustees may be unable to sign away their members' ...

  • Legg Mason's Miller beats the index for 11th year

    24 Jan 2002

    Legg Mason's star value fund manager Bill Miller has outperformed the S&P500 index for the 11th consecutive year. Miller, who has run Legg Mason's flagship $11.7bn (£8.1bn) Value Trust since 1990, is the only manager to have outperformed his benchmark for more than a decade. While Miller's value trust is only available to the US market, he also co-manages Legg Mason Investors' American assets investment trust with LMI head of investment trusts Alan Kerr. Legg ...

  • Lenders clash over LTV cuts

    24 Jan 2002

    Halifax has attacked Alliance & Leicester and NatWest for cutting their loan to value criteria in the South-east, claiming it will drive down house prices in expensive areas. The two lenders have lowered the maximum LTV from 95 per cent to 90 per cent over fears that a downturn in the market could cause many borrowers to default. But Halifax says A&L and NatWest are effectively dictating where borrowers can or cannot buy a property and are making it harder for first-time ...

  • Lewis joins Screen Pages

    29 Jan 2002

    AssureSoft founder David Lewis is joining IFA website solutions provider Screen Pages to develop an internet-based employee benefit and workside marketing tool. The Staffcare product is designed to allow updating of pensions information directly from product providers.Lewis will hook up with Screen Pages managing director Philip Hollingdale, a former AssureSoft colleague.

  • Life offices' dilemma as clock ticks

    24 Jan 2002

    The FSA's decision to abolish polarisation has left life off-ices in a strategic quandary over whether to back the IFA sector or enter into multi-tie agreements. With the regulator entering into a period of consultation, many observers believe it is unlikely to alter the main thrust of the proposals. Life offices realise they have to act quickly or risk being left with severely limited distribution. Industry experts say it is the biggest providers chasing mass-market business ...

  • Life-changing events

    24 Jan 2002

    Virgin One is launching a £10m advertising campaign aimed at getting people to think about life events that can hit their financial security. The TV and press campaign, entitled, Living your life differently, aims to communicate the flexibility of the Virgin One current account mortgage. The five ads, running on national and satellite TV, portray real-life situations such as being disinherited, unexpected pregnancy and walking out of a job. A further eight press adverts, ...

  • Merrill Lynch HSBC offers Tessa PIP

    25 Jan 2002

    Merrill Lynch HSBC, the online partnership between Merrill Lynch and HSBC, has unveiled the Eurostoxx protected investment product (PIP).

  • MFS plays aggressively in US rough and tumble

    24 Jan 2002

    The MFS US growth equity fund is an Oeic that invests in US companies with good growth prospects. It is a clone of a fund run from Boston since 1996 by Irfan Ali and Peggy Adams. It will invest in around 107 stocks of all sizes. Sectors include financial services, technology, healthcare, leisure and business services. The fund managers will rely on research by a team of analysts who are each responsible for two or three sectors. These analysts will examine documents such as financial ...

  • More than 50% of borrowers aware of loan code

    24 Jan 2002

    Over half of new borrowers are aware of the consumer protection which the mortgage code and the FSA are intended to provide, according to new Mortgage Code Compliance Board research. The MCCB questioned 1,000 adults in October last year to gauge what people know about their rights under the code, introduced in 1997, and the role of the FSA in financial services. It found that 59 per cent of new borrowers were aware of the code, which it claims indicates the success of its You and ...

  • Multi-tie to everyone for Sipp and SSAS business,says FSA

    24 Jan 2002

    The FSA is urging advisers who want to continue advising on complex pension business such as Sipps and SSASs to multi-tie to everyone in the marketplace. Many in the industry say they are surprised by the statement which they claim goes against what the regulator's proposed changes to the polarisation regime are trying to achieve. Industry commentators say the only difference bet-ween a distributor firm tied to the entire marketplace and an IFA is in the name and the fact that ...

  • National Savings increases rates

    29 Jan 2002

    National Savings is increasing the rates on its tax-free fixed rate products following a rise in gilt yields. On a five year fixed rate savings bond, the annual rate is now at 4.7 per cent on investments of more than £50,000, up from 4.45 per cent. For a £20,000 five year bond the rate is up to 4.5 per cent from 0.25 per cent.

  • Network aid to mortgage compliance

    24 Jan 2002

    A new network for mortgage intermediaries which is des-igned to help them meet compliance standards and get ready for the FSA regulating mortgage advice is being set up by Network Data. Network Data, which is mainly a supplier of mortgage sourcing software, is intending to help brokers be prepared for the compliance standards which the FSA will demand from 2004. It estimates that about 10,000 companies in the mortgage sector could be looking to join a network to service their needs ...

  • New Star - High Income Fund

    23 Jan 2002

    January 23, 2002Type: Oeic.Aim: Income and growth by investing in UK ordinary shares, fixed interest securities, preference shares, convertibles.Minimum investment: Lump sum £1,000, monthly £50.Investment split: 100 per cent invested in UK ordinary shares, fixed interest securities, preference shares, convertibles.Yield: 4 per cent gross a year.Isa link: Yes.Pep transfers: Yes.Charges: Initial 5.25 per ...

  • New Star values high income

    25 Jan 2002

    New Star has unleashed its fourth fund, the New Star higher income fund, in time for the Isa season.

  • NU with-profits bonuses cut by up to 19 per cent

    24 Jan 2002

    Norwich Union has become the latest life office to slash annual bonus rates, hitting some with-profits policies with cuts of up to 19 per cent. The news comes after Scottish Widows admitted that it was reducing bonuses on its savings policies by around one-third. NU says it will cut bonuses on savings policies to 4.25 per cent from 5.25 per cent and on personal pension policies to 5.25 per cent from 6.25 per cent. It blames the reductions, which will affect more than three ...

  • NU, Friends and Widows in £26m Assureweb stake

    24 Jan 2002

    Norwich Union, Friends Provident and Scottish Widows are taking a 40 per cent stake in Misys-owned Assuresoft to inject £26m into its Assure-web IFA portal. Misys says the cash boost is the only way it can achieve an effective end-to-end proposition for online trading and servicing. But the deal has sparked fears that the firms could get preferential treatment on the portal although Misys denies this. It also refutes suggestions the deal favours a multi-tie scenario, arguing ...

  • Offset web

    24 Jan 2002

    Did anyone at the FSA think to ask the Inland Revenue what it thinks of commission offset for a whole industry? I am sure it was not too worried by a few IFAs doing a bit of offset but a whole industry? This could get even nastier. Christopher McMullen McMullen (Insurance Brokers),Bournemouth

  • Orbitex is Bidding for clarity in retail move

    24 Jan 2002

    Institutional fund manager Orbitex has launched its first funds for the UK retail market, promising to bring institutional clarity to what it believes is an opaque arena. The three Oeic sub-funds - managed, global equity and UK equity funds - were soft-launched in December and are being rolled out to IFAs this week. The managed and UK equity funds are clones of existing Orbitex pension funds, previously available to the retail market only through a self-invested personal pension. ...

  • Pension IFAs set to polarise

    24 Jan 2002

    Pension IFAs look set to split between offering independent advice for high-net-worth clients and multi-ties for the mass market as a result of the FSA's polarisation and commission proposals. IFAs operating in the top end of the pensions market such as in Sipps and SSASs are thought likely to stay independent as many already work on a fee basis. But those currently working mainly on a commission basis look most likely to multi-tie. Intelligent Pensions director Steve Patterson ...

  • Pension thinktank aims to aid public

    23 Jan 2002

    A new pensions thinktank has been launched to research retirement provision and improve public understanding of pensions issues. The Pensions Policy Institute is chaired by Royal London director and Aon principal and actuary Tom Ross and aims to find ways of providing better information on pensions and encourage a new framework for long term pension planning. Former Swiss Re head of strategy Alison O’Connell has been appointed as its first director. 

  • Pensions top for saving but planning left to last minute

    24 Jan 2002

    FSA consumer research shows pensions are top of the public's savings agenda but most financial planning is carried out only just before retirement. The FSA undertook the research to look at how consumers plan their financial future and found there is a significant demand for advice. Pensions are seen as the key vehicle for making provision for retirement, with little consideration given to other methods of saving. It found that pensions are trusted - with little mention ...

  • Pink Home Loans adds new lenders to panel

    28 Jan 2002

  • Polls show IFAs under pressure

    24 Jan 2002

    IFA opinion polls following the FSA's polarisation proposals show most IFAs want to stay independent but the pressure of moving to defined payment may force some to multi-tie. Under defined payment, advisers pre-agree a charge with clients as either a fee or commission rebate. A poll of IFAs on online IFA chatroom theprofessionaladviser.org.uk shows nearly three-quarters will stay independent on a defined-payment system. But in a poll of 100 IFAs by ProAct Legal, only 3 per ...

  • Pooled pensions fall second year running

    23 Jan 2002

    Pooled pension funds have suffered two consecutuve years of negative growth for the first time since 1973 and 1974 according to the CAPS pooled pension update for the fourth quarter of 2001.

  • Power tools to ease workload

    24 Jan 2002

    Following last week's article on worksite marketing, I will take a more detailed look this week at the technological options that can enable IFAs to exploit the important sales opportunities that exist within the workplace. The worksite marketing model presents a number of opportunities to financial intermediaries because it is an ideal way to target a large number of potential customers cost-effectively. The next stage is to look at what tools are available to intermediaries ...

  • Product Matters: The timing of Scottish Widows

    24 Jan 2002

    International's with-profits bonds comes as the firm begins to advertise on the TV once more to improve its name awareness. For the majority of advisers, the with-profits option is an attractive alternative, partic- ularly during these times of stockmarket volatility. There is also no doubt that more and more advisers are now looking to use offshore products for tax planning for clients and this is emphasised with the low minimum investment into the scheme. In the past, Widows ...

  • Professional introductions under threat in new regime

    24 Jan 2002

    IFAs face losing some of their most lucrative clients from professional introducers if they multi-tie under FSA plans. Accountants and solicitors would be prohibited from referring clients to all levels of adviser except IFAs charging fees because their professional rulebooks require them to "act independently" in referring clients. The move could see some IFAs lose up to a third of their business while those deciding to remain independent could see business from these sources ...

  • Profit alert from Inter-Alliance

    24 Jan 2002

    National IFA Inter-Alliance has issued a profit warning to the City, blaming market conditions and litigation. The Aim-listed IFA says it does not expect to be back in the black until 2003. It believes the FSA's depolarisation plans are a "major opportunity for the company", fuelling speculation of a takeover by a major provider. Money Marketing revealed in October the firm had discussions with American Express about a possible buyout. Inter-Alliance says it has been ...

  • Readers get a chance to grill Severn on 121

    24 Jan 2002

    The head of the FSA's polarisation review David Severn has agreed to answer questions emailed by Money Marketing readers on consultation paper 121. Given the length of the regulator's consultation paper, many IFAs may not have time to study the report in detail. As such, we are providing our readers with this superb opportunity to put specific queries to the key person in charge of the review. A selection of questions and replies will be published in MM in the near future. Any ...

  • Schroders gets into gear for tax-free income

    24 Jan 2002

    Schroders' income Isa aims to provide a tax-free income of 5.8 per cent a year and the potential for capital growth by investing in the ordinary shares of the recently introduced Schroder split investment fund. This investment trust invests 75 per cent in stocks listed on the FTSE 350 index. The remainder goes into a portfolio of fixed-interest securities via the Schroder monthly high income and Schroder corporate bond unit trusts. Gearing is limited to 15 per cent so it is not ...

  • Scottish Friendly Assurance - Growth & Security Bond

    25 Jan 2002

    Friday 25 January, 2002Type: With-profits bond.Aim: Growth.Minimum investment: Lump sum £3,000.Bonus rate: 5.25 per cent.Allocation rates: £3,000 - £9,999 95 per cent, £10,000 and above 96 per cent.Charges: Implicit.Options: 2.5 per cent bonus on tenth anniversary.Commission: Initial 5.25 per cent.Tel: 0800 834428.

  • Scottish Friendly repeats bond offering

    28 Jan 2002

    Scottish Friendly Assurance has introduced another issue of its growth and security bond, which invests in the Scottish Friendly with-profits fund.

  • Scottish Mutual - Flexible Investment Bond

    23 Jan 2002

    Wednesday, January 23 2002.Type: Unit linked bond.Aim: Income and growth by investing in a choice of unit-linked funds.Minimum investment: Lump sum £5,000.Fund links: Safety, gilts and fixed interest, cash, corporate bond, growth, with-profits, opportunity, UK equity, North American, European, Japanese, Far Eastern, international, ethical, technology, ABN Amro equity income, ABN Amro high income, ABN Amro UK growth, Baillie Gifford British 350, Baillie ...

  • Scottish Mutual flexes bond

    24 Jan 2002

    Scottish Mutual has introduced a unit-linked bond that offers access to a range of 38 funds, including a with-profits fund and 23 external funds.

  • See Northern Lights with with New Star

    24 Jan 2002

    Win a trip to see the Northern Lights in Tromso, Norway, the town where Roald Amundsen set out to conquer the Pole. New Star is setting out to conquer this Isa season with its new higher-income fund. To mark the fund's launch, three IFAs plus a guest each will have the opportunity to see the stunning Northern Lights - the Aurora Borealis. The Northern Lights are best seen in the winter months so New Star is sending the winners and their partners for a fabulous weekend to see ...

  • Shelton warns IFAs not to tie before Sandler review

    24 Jan 2002

    It is crucial that IFAs do not succumb to provider pressure and become multi-tied before they know how the Sandler review will affect their businesses, warns Clerical Medical. Head of group strategy David Shelton says IFAs must think strategically and resist the golden handcuffs he bel-ieves providers are offering to them until the Sandler review is published later in the year. He says the radical nature of the FSA's polarisation ref-orms - and the width of Sandlers's remit ...

  • Skandia Protect putting quote system on CD-Rom

    24 Jan 2002

    Skandia Protect has introduced a new system allowing IFAs to produce quotes using a CD-Rom. It says the CD-Rom complements its online service by allowing IFAs to produce client-specific quotes at any time. It has been designed following a strong demand for an offline tool from IFAs. The CD-Rom can produce quotes for life, critical illness and long-term care cover. Each quote can be tailored to a client's needs for personal or business protection, inheritance tax or long-term ...

  • Small IFAs still lagging behind says FSA

    29 Jan 2002

    The FSA says there are still small IFA firms who remain unwilling to take responsibility for pensions misselling they may have been involved in as its review winds to a close.

  • South-west manager for Pink Homes Loans

    28 Jan 2002

    Pink Home Loans is appointing Andy Keen as business development manager for the south-west region.

  • Standard & Poor's Top 10s

    24 Jan 2002

    As the Isa season begins in earnest, fund valuations are still depressed despite some rally in the markets since September. In the last 12 months, the average unit trust is still down by 14.12 per cent while the average investment trust has fared worse still with a return of -18.31 per cent. JPMF Korea is still the best-performing unit trust of the past year, with Baring's Korea fund at number two and Schroder Seoul at number four.

  • Standard Life - Group Plan

    29 Jan 2002

    Tuesday January 29, 2002Type: Group money purchase pension.Minimum premium: Monthly £50 a member.Minimum group size: 17.Minimum-maximum ages: 18-75.Fund links: Standard Life funds - Sterling one, fixed interest one, property one, protection one, structured one, indexed linked one, managed one, ethical one, international one, stock exchange one, Far East one, European one, Japanese one, North American one, Pacific Basin one, ...

  • Sunderland firm to be wound up

    23 Jan 2002

    The FSA has been granted an order by the High Court for the compulsory winding up IFA Albion Management Services of 19 Olive Street, Sunderland, SR1 3PE because the firm is insolvent and cannot make up a shortfall of about £1m in client assets.

  • Swim the multi-channels

    24 Jan 2002

    Financial services retailers are no longer restricted to offering transactions during normal office hours as consumers demand access around the clock via telephone and the internet. Intermediaries looking to develop their multi-channel strategies can learn about the benefits of channel selection and integration at a twoday conference in London in March. A host of industry figures will speak at the conference including Abbey National director of business management Gary Hockey-Morley, ...

  • Talent shows to seek stars for new campaign

    24 Jan 2002

    Abbey National hopes to tap into the public's passion for self-publicity by holding talent shows for its customers to find stars for its new advertising campaign. Abbey is holding three talent show events, in the style of the TV programme Soap Stars across the UK in January and February. The winners will star in a series of television, poster and press advertisements during the year. Budding actors will be asked to perform a famous scene from the world of television in front ...

  • Talkback

    24 Jan 2002

    Would you consider multi-tying if the FSA's plans to scrap polarisation are implemented? "Yes. I don't have an option as I could not go fee charging. People are not willing to pay fees. It is either that or switch the light off on the way out." Alan Bradshaw, Ashbourne Associates "Maybe. It is a matter of trying to survive but I would be very loath to do it as it would be to the detriment of my clients." Geoffrey Houghton, BAP Insurance Consultants "Yes. I would ...

  • The FSA certainly isn't independent

    24 Jan 2002

    The disgraceful capitulation by the FSA in the face of pressure by the Government and the big businesses within the financial services industry shows that it is far from being an independent regulator motivated by protecting the man in the street. Those who think that the current proposals will help any member of the general public, particularly the less well off, are seriously deluding themselves. They will help the banks and some direct-sales operations. They should be shredded ...

  • The positive potential

    24 Jan 2002

    An end to polarisation now looks all but inevitable. The industry had been anticipating the FSA's proposals and the details last week should have surprised few. The FSA's consultation document certainly means a fundamental change for product providers and IFAs alike. But if a change to the existing regime is rubberstamped, the future should not be viewed in a negative light. Although the proposals are presented in a consultation paper, we believe they will be implemented ...

  • Things aren't always what they seem

    24 Jan 2002

    April 15, 1967, Wembley: England 2 Scotland 3. Life is full of surprises. CP121 certainly contained a few. Now we are over the initial reaction phase, advisers and providers alike are sitting down trying to work out how they can be successful in the new world. The biggest surprise of all could be how wrong our initial assumptions about that new world turn out to be. Conversations we had with policymakers before Christmas led us to expect something bold from the FSA - it certainly ...

  • Tied ebbs and flows as firms ponder choices

    24 Jan 2002

    IFAs and product providers are split on how to adapt their businesses to take into account the FSA's polarisation proposals but independent advice looks set to continue. Among the providers, Zurich says it is not interested in multi-tying, saying it is happy with its current distribution methods. Standard Life says it has no plans to enter tied arrangements as yet but Axa is preparing fully for multitied distribution. IFA RJ Temple says it will drop independent from its title ...

  • Treasury publishes regulation timeline

    28 Jan 2002

    The Treasury has published a timeline for the implementation of regulation of mortgage and general insurance intermediaries on its website which sees the new regime come into effect in the second quarter of 2004.

  • Treves says he will not leave Equitable

    28 Jan 2002

    Equitable Life chairman Vanni Treves says he has no plans to leave the society following the overwhelming backing of its compromise scheme by policyholders.Speaking at a press conference to announce the results of the vote, Treves indicated that he would stay on as chairman but said it depended on the Equitable's members, the board and, to a lesser extent, the media.He said: "If you look at my track record, I am not known for having left any situation prematurely."

  • True or false with-profits?

    24 Jan 2002

    Fans and opponents of with-profits will remember 2001 as the year that the subject emerged from the shadows into the full glare of the spotlight. Following a series of papers, reviews and consultations (and with more to come in 2002), changes to with-profits as we currently know it are certain to follow. The year was not very old when we had the views of the actuarial profession in a paper on transparent with-profits. By a happy coincidence this happened in the same week that Howard ...

  • Two's company for Lazard

    25 Jan 2002

    Lazard Asset Management is packaging two of its flagship funds inside the Lazard alpha Isa.

  • Verity's view - 24th January 2001

    24 Jan 2002

    So that's it then. For all these years an industry employing hundreds of thousands, plus all the associated civil servants, company managers and hangers on have been referring to "independent financial advice" like it was a good thing. The FSA itself has consistently urged people to seek independent financial advice. Poor old IFA Promotion has spent millions of its contributors' money promoting independent advice, doing the Government a huge favour by helping the public understand ...

  • Wake up to reality

    24 Jan 2002

    Even before the economic downturn became quite so apparent, financial services companies were starting to question IT budgets in a much more stringent way than ever before. The importance of technology, such as customer relationship management, to today's customer-focused organisations cannot be overestimated. But companies are no longer willing to sign blank cheques for systems without a clear understanding of when and where they will make a difference to the bottom line. For ...

  • Ways and means of the pension credit

    24 Jan 2002

    The Government has finally unveiled detailed proposals for the pension credit but what does it all mean for advisers? The first point to note is that the pension credit has been renamed in the Bill which sets forth the proposals. Now we should talk about state pension credit to avoid any possible confusion with the pension credits which arise from pension sharing on divorce. The second point to note is that the Government remains on course to fulfil its manifesto commitment that the ...

  • Win a trip to Japan

    24 Jan 2002

    Scottish Life is the exclusive sponsor of Sky's pay-per-view Premiership football channel Premiership Plus. To celebrate this new partnership, Scottish Life has teamed up with Money Marketing to offer IFAs some fantastic prizes in our brand new fantasy football game. 1st prize - A once-in-a-lifetime trip for two people to the World Cup in Japan to see England play Argentina at the famous Sapporo Dome stadium. Your prize will include return flights, first class hotel accommodation ...

  • Zifa outperforms as Zurich sales edge up and Zan business drops

    24 Jan 2002

    Zurich Financial Services saw only a small rise in new business last year, blaming "difficult" market conditions which caused sales by its advice network to fall. Total life and investment premiums were up by 3 per cent last year to £3.8bn in equivalent premium income from £3.7bn in 2000. Its IFA group Zifa had a 12 per cent rise in sales to £212m from £189m. It also had growth in the UK pension market as its business rose by 10 per cent to £224m from ...

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