Money Marketing
26 June 2002

'Life office leadership living in the past'

27 Jun 2002

The life insurance industry's standard-raising board chairman John Cox says corporate leadership in the industry lags behind other sectors by a decade as it considers extending its scheme to cover service standards to IFAs. The scheme is also considering expanding its scope to cover banks to take account of a probable enhanced role in distribution. Pensions Protection Investment Accreditation Board chief executive John Cox, speaking to Money Marketing, compared the life industry ...

'Watchdog may be legally wrong over dual-pricing'

27 Jun 2002

The Building Societies' Association is advising its members that the Financial Ombudsman may be legally wrong in its recent decisions against dual-priced products. In the last few months, the ombudsman has issued adjudications against Nationwide Building Society, Halifax and Cheltenham & Gloucester banks while Norwich & Peterborough Building Society and Abbey National are awaiting final decisions. The BSA says it has taken legal advice and has circulated guidance to ...

20/20 revision

27 Jun 2002

Back to work after my family holiday in Cyprus and, as usual, it was like I had never been away. The paperwork was still there, my inbox was bursting at the seams with email, the list of phone messages read like the Leeds phone book and, yes, the now infamous black Cemap book was still there. Once I got things straightened out, I caught up on some essential reading, including Money Marketing and some mortgage magazines. There was a feeling of déjà vu about the mortgage ...

Abbey would look at merger

26 Jun 2002

Abbey National says it would consider acquisition or merger offers in the interest of shareholders if the right opportunities arose.

Aegon opens IFA account in swoop for Wentworth Rose

27 Jun 2002

Aegon UK has kicked off its new strategy of buying IFAs by taking a 50 per cent stake in retirement specialist IFA Wentworth Rose with an exclusive option on further shares. A new company - Aegon UK Distribution Holdings - has been set up to take stakes in IFAs. Aegon, which owns Scottish Equitable, says more deals are in the pipeline. It will make separate ad hoc investments with other providers in IFAs. Under the terms of the deal, no rival can buy shares in the Surrey IFA, which ...

Almost half of UK workers have no pensions says CA

1 Jul 2002

Almost half the UK workforce has no pension provision according to new research from the Consumers' Association.

Another increase in adviser numbers for AFPC

27 Jun 2002

The number of IFAs completing the Advanced Financial Planning Certificate has increased for the second consecutive exam session, according to the CII. A total of 343 advisers completed the three exams required to be awarded the AFPC following the April 2002 exam sessions, up from 304 who finished the work at last year's October session. This in turn was an increase from the 295 who completed the exams in April last year. Overall pass rates for the AFPC also increased to 42 per ...

Birthday suits, you sir

27 Jun 2002

Life on the ocean (well, Solent) waves on PIMS can be a choppy ride at the best of times but when you run into difficulties before you even set sail, you know you are in trouble. So Torquil Clark's Don Clark (see left) found when he entered his cabin on boarding the Aurora and decided to take a shower. Figuring that he was in little danger of being seen, Don happily strutted round his room wearing nothing other than a happy and contented smile (probably). Until, that is, he ...

Bradford & Bingley promoted to FTSE 100

2 Jul 2002

Bradford & Bingley, the IFA and mortgage lender, has joined the blue chip club after being promoted to the FTSE100. The company takes the place of demoted Powergen. B&B was selected on the basis of its recent trading statement.

Britannia International - 5 Year Guaranteed Capital Equity Bond (Issue 9)

1 Jul 2002

Monday, July 1, 2002 Type: Guaranteed equity bond Aim: Growth linked to the performance of the FTSE 100 index Minimum investment: Lump sum £1,000 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 38.25% gross after five years Isa link: No Charges: None Commission: ...

Britannic Money launches new discounted flexible mortgage

1 Jul 2002

Britannic Money has launched a two-year 1.9 per cent discounted current account mortgage. The 3.99 per cent rate is available up to 95 per cent LTV without a MIG. There is no compulsory insurance tie in and interest is calculated daily.An early redemption penalty of 3 per cent applies during the discount period. The mortgage is available to July 31, 2002.

Brokers looking for more healthcare policy support

27 Jun 2002

Healthcare intermediaries are not getting the support and services they require to promote healthcare policies, according to research from cash plan provider HealthSure. It says 70 per cent of brokers have been asked about healthcare insurance by clients over the last two years but only 30 per cent had sold cash plans. Many intermediaries say they need direct access to a dedicated and informative support team. Other needs include detailed technical information and sales and marketing ...

Buildstore appoints new head of marketing

28 Jun 2002

Cash for life firms as solvency fears grow

27 Jun 2002

Tumbling stockmarkets are forcing companies to pump cash into their life insurance subsidiaries as they scramble to maintain solvency. AMP is to inject £400m to shore up the solvency of Pearl. AMP chief actuary Peter Carr says the money is likely to go into either Pearl's with-profits shareholder fund or a separate holding company. Abbey National has injected another £150m into its Scottish Mutual subsidiary. It made a similar £150m injection into ScotMut following ...

Cazenove and AIG in new deal to boost products

27 Jun 2002

Cazenove Investment Fund Management and AIG Life have agreed a new deal which will see them forge closer links and promote each other's products. Cazenove's four fund of funds will be available through a range of AIG Life's products, including its capital portfolio bond, personal pension bond, trustee investment bond and offshore bond. AIG Life already offers a selection of externally managed funds but the deal means Cazenove becomes the only multi-manager available in ...

CII, LIA and Sofa link for IFA online testing

27 Jun 2002

The CII, the LIA and Sofa are collaborating on a joint online testing facility and tutorial service for IFA firms, replacing each organisations' own proposals. The new competency system aims to satisfy the FSA's desire for enhanced testing of IFAs outlined in its DP9 report, published last year, and the subsequent feedback statement this spring. For a annual fee of about £50 per adviser, firms can have access to the range of compliance and competence tools from the ...

Critical condition as Swiss Re ends cover

27 Jun 2002

A move by Swiss Re to stop underwriting critical-illness policy guarantees could devastate the market for guaranteed CI products. Advisers are concerned that other reinsurers, notably GE Frankona, could follow, finishing off the CI market for products with terms of over five years without premium reviews. Swiss Re is to stop offering guarantees of more than five years on CI contracts because the speed of medical advances and changing definitions are dramatically changing its risk ...

Derbyshire BS to rebrand and expand IFA arm

27 Jun 2002

Derbyshire Building Society is relaunching its IFA arm, changing its name from Ilkeston IFS to Derbyshire Independent Financial Services. The rebranding, which takes effect immediately, has been planned since the society bought Ilkeston Building Society in November. DIFS will continue to be a generally focused IFA, offering advice on everything from pensions and investments to IHT planning, income drawdown and advice on trusts. Previously based in Ilkeston, Derbyshire, the ...

Elegy for L&G

27 Jun 2002

Legal & General's decision to take the knife to its commission structure has left IFAs puzzling over whether the life office wants to do business with them any more. L&G has been a popular brand with the public and most IFAs are happy about recommending it to their clients. So what is behind L&G's move to put in place a commission structure that virtually cuts out all IFAs except those operating on a fee basis? Will other life companies follow suit? The restructuring ...

Equitable slashes maturity and surrender values again

1 Jul 2002

Equitable Life has again been forced to slash maturity and surrender values to maintain solvency after recent market falls.The maturity value will now be reduced by 10 per cent from 4 per cent before. Early surrenders will incur a penalty of 20 per cent up from 14 per cent.The society describes the move as "most regrettable". Equitable has reduced its equity holding to 15 per cent but says it is still solvent.

Five providers take stake to boost Millfield's deals

27 Jun 2002

The dash for distribution moved into top gear this week as five of the most acquisitive product providers joined forces with other investors to buy an 18 per cent stake in Millfield, giving the IFA £17.2m to buy a further 15 firms. Aegon, Friends Provident, Norwich Union, Scottish Widows and Skandia are paying £2.4m each for newly issued shares in Millfield, with a further £5.2m from other investors. Millfield is also teaming up with Australian financial services ...

FSA issues new resilience test

28 Jun 2002

The FSA has issued guidelines about a revised resilience test for life insurers, saying the existing one is not suitable to today's market behaviour.

German IFA giant buys its way to top in UK

27 Jun 2002

German financial advice giant AWD believes it can conquer the UK market with the acquisition of Carrington Carr to create the UK's third-biggest IFA by turnover. The deal, reported to be worth £32m, will see mortgage specialist Carrington Carr integrated into IFA Thomson, which was bought by AWD last November for £30m. Thomson says AWD has funds for further acquisitions and believes it could become the UK's biggest IFA in the next two years. Leicester-based ...

Golden years

27 Jun 2002

What do you think of the prediction that the UK could follow Japanese mortgage trends by moving towards longer mortgage terms of up to 50 years to improve affordability? Underhill: Unlikely, although this largely depends on the future direction for house prices. We have seen in the past periods where the growth in house prices has outstripped earnings' growth, only for the longer-term relationship to be restored. Hopefully, this will happen again, since the thought of such long-term ...

Hunt quits Aifa to avert consultancy clash

27 Jun 2002

Lord David Hunt is stepping down as Aifa chairman to prevent any conflict of interest as his City law firm sets up a financial consultancy. Hunt, who is a senior partner at Beachcroft Wansbroughs, has promoted the cause of independent financial advice in several House of Lords' debates. The new consultancy Beachcroft Wansbroughs Consulting will be launched on July 1, led by joint managing directors Richard Hobbs and Oliver Lodge. Both currently work for the FSA, Lodge in ...

Independent View

27 Jun 2002

Who are we? Professional financial advisers, social workers, industry politicians, readers of the trade press? What does it say on the tin? What is a financial adviser? Someone who provides, as the IFP says, "a professional service for clients who need objective assistance in organising their personal or corporate financial affairs to more readily achieve their goals" or is it someone whose day-to-day existence is overwhelmed with what is going on in the financial services industry? It ...

Inside Edge: Andrew Bedford

27 Jun 2002

Despite the numerous legislative burdens placed on them over the years, IFAs have proved remarkably adaptable and able to produce opportunities where only problems seem to exist. The myth of the commission-hungry salesman belies the fact that IFAs have proved to be the lowest-cost distribution channel for most providers, have the lowest level of complaints and expend huge amounts of effort ensuring the best deal for their customers, regardless of the remuneration available on any product. The ..

Investment update

27 Jun 2002

There was little respite for equity investors last week with further tension in the Middle East and no let-up in the level of suspicion surrounding corporate America continuing to depress share prices. In the UK, the FTSE 100 fell by a further 0.5 per cent. As well as the TMT stocks that again came under pressure, the insurance sector also came in for some heavy selling with investors worried over solvency margins in the industry. Among the junior indices, the FTSE 250 suffered ...

Isa sales slide continues with 27% fall

27 Jun 2002

Isa sales fell again in May, with business down by 27 per cent compared with May 2001, according to the Investment Management Association. Despite total sales of investment funds rising by 11 per cent last month to £897m from £807m in May 2001, IMA figures show that Isa sales fell sharply to £459m from £633m as investors shied away from the stockmarket. Investors who did buy Isas looked to the UK corporate bond sector for ret-urns, with the sector's share ...

Jupiter predicts SIPP surge

26 Jun 2002

Jupiter Asset Management is predicting a surge in investment into self-invested personal pensions as further final salary schemes dissolve and investors turn from traditional with-profits pension schemes and managed pension funds.

Lenders and packagers agree deal on corrie definitions

27 Jun 2002

A new forum involving the UK's main correspondent lenders and packagers has established industry definitions for the first time in a bid to end confusion in the correspondent market. The definitions were thrashed out at the meeting in London last week organised by mortgage funder National Guarantee involving the main players in the sector, including GMAC-RFC, Platform Home Loans, Preferred Mortgages and Solent Mortgage Services. It decided "correspondent lending" will be the ...

Loanliness of long-distance runner

27 Jun 2002

For some borrowers, longer-term mortgages represent the easiest way of making the leap on to or up the property ladder. The continuing rise in house prices is forcing many potential borrowers to consider their options. Such borrowers include the first-time buyer who is keen to get on to the housing ladder but has only a small deposit. They are witnessing property price escalation month by month. Others are having difficulties in meeting bigger monthly repayments as a result of stretching ...

Merchant opens up new Threadneedle fund link

1 Jul 2002

Merchant Investors has added Threadneedle's strategic bond fund to its portfolio range of pensions and investment products.The bond fund, which is actively managed across the whole range from investment grade bonds to high yield bonds, has a gross running yield of 7.5 per cent and a redemption yield of 5.83 per cent.The move is the latest in a number of fund links Merchant has opened up with Threadneedle since last year.

Moore's code

27 Jun 2002

Here is a solution for IFAs who have the hard job of telling clients in London and the South-east that they cannot get a mortgage because they need to borrow an income multiple of four or five to buy an even halfway liveable place. Try this out with, say, Abbey National, or perhaps Halifax. When filling in the mortgage application form with your client add in a sum for "future profits" in addition to their salary. For example, people in professions such as teachers, nurses, doctors, ...

Mortgage service to aid recent graduates

27 Jun 2002

Endsleigh Independent Financial Tailoring and Scottish Widows Bank have introduced a mortgage service for recent graduates. Cheltenham-based Endsleigh says it has launched the product because young professionals often find it difficult to get a mortgage shortly after they graduate. The IFA says the mortgage will aim to solve some of the problems faced by young people with little credit history. The firm says many graduates have lived at several addresses while at university ...

NDF Adminisrtation - NDF Income & Growth Plan

1 Jul 2002

Monday, July 1, 2002Type: Guaranteed equity bondAim: Income or growth linked to the performance of the FTSE 100 indexMinimum-maximum investment: £10,000-£1m, £7,000 IsaTerm: Three years two monthsGuarantee: Capital returned in full at end of term provided the index does not fall by more than 20% Return: Choice of 9% income a year, 0.7% income a month or up to 30% growth at end of termClosing date: August 23, 2002Commission: ...

New appointments at CGNU

28 Jun 2002

CGNU has promoted Philip Scott to become executive chairman of Norwich Union Life. His expanded role will encompass being appointed to the board of CGU France and he will also work closely with the board of Delta Lloyd, its Dutch subsidiary.

New Star discount bids dashed by high prices

27 Jun 2002

New Star is believed to have put plans to set up a vehicle to acquire discount brokerages on hold after the companies it approached reportedly demanded astronomical prices. In a move which would have made it the first fund manager to join the dash for distribution, New Star is believed to have approached a number of top brokerages in a bid to secure distribution before depolarisation. One of the options that chairman John Duffield was believed to be considering was for New Star ...

Norwich Union adding to MVR

27 Jun 2002

Norwich Union has increased its market value reduction and extended it to pension products dating back to 1989 as a result of continued falling stockmarkets. The move comes as the insurer is being criticised for parent company CGNU using £2bn of future profits in its 2001 returns. The company argues that this strategy is better than having to sell equities in a falling market. NU says the higher MVR came into force last Friday and will apply to a wider spread of policies ...

Outside Edge: Garry Heath

27 Jun 2002

It is not a subject any of us likes to contemplate. Indeed, most of us do everything in our power to avoid confronting it. Are those close to us being unfaithful? He may be coming home at 1am smelling of perfume with an inane grin on his face but the obvious answer for many partners is that he has been locked in the pub with a perfume salesman who tells amusing jokes. Self-deception rules. Commercially, the question of client infidelity is one that many IFAs would be wise to confront ...

Pensions savers face poverty says Duncan Smith

27 Jun 2002

Savers are not getting the advice they need when they buy a pension and life offices are losing money on every stakeholder pension they sell said Conservative leader Iain Duncan Smith in a speech today.

Philip Rose

27 Jun 2002

In selling half of Wentworth Rose to Aegon, chief executive Philip Rose hopes to have struck a deal to frighten the competition and make the entire industry sit up and take notice. "We have punched above our weight for some time. We can now stand eyeball to eyeball with the competition. We are now a premiership deal with an eye on the championship," he says. With £550m under management, 1,000 individual clients and 46 consultants, Surrey-based Wentworth Rose is hardly a minnow. ...

Product matters

27 Jun 2002

Standard Life Bank's Offset takes the development of offset mortgages to the next stage. I am referring to the fact that Standard Life is offering offset on a range of products -all five of its Freestyle range of flexible discount mortgages. Every other lender which offers offset has a single specific offset mortgage, priced differently to the rest of their core product range. However, Standard Life offers a choice of whether to manage the same mortgage on an offset or flexible ...

Red light wants EIS green light

27 Jun 2002

Stars including Reservoir Dogs' Michael Madsen are seeking financing through a UK Enterprise Invest-ment Scheme to produce Red Light Runners, a Lon-don-based heist caper film. Budgeted at £8m, the film needs to attract an initial £2m - the minimum to cover the production costs of a straight-to-video film - by July 17 before its producers can continue raising the money needed to make a feature film. If the deadline is not met, then investors will receive their money ...

Schroders alpha fund mixes stock selection

28 Jun 2002

Schroders has introduced the UK alpha plus fund, a unit trust which invests in a concentrated portfolio of between 20 and 40 UK stocks.

Scottish Widows - Flexible Options Bond

28 Jun 2002

Friday, 28 June 2002 Scottish Widows - Flexible Options BondType: Unit-linked bondAim: Income or growth Minimum investment: Lump sum £5,000 Fund links: 17 Scottish widows funds and 62 funds from Artemis, Deutsche Asset Management, Fidelity Investments, Gartmore, Invesco Perpetual, JPMorgan Fleming, Merrill Lynch, Newton, Schroder, SG Asset Management, Threadneedle.Allocations rates: 98.25-103.25% depends on age and premium level Charges: ...

Skipton IFA aiming to double advisers after going independent

27 Jun 2002

Skipton Financial Services IFA is on track to double its advisers to 80 by July 1 and take on another 40 by the end of the year following its decision to go independent in building society branches. Skipton Building Society is to cut its tie to Norwich Union and change the status of 40 authorised representatives to IFAs under the SFS umbrella. From next month, each of Skipton's 80 branches will have an IFA advising on regulated products from a panel of providers, including NU, ...

Smith calls for part-time flexibility

26 Jun 2002

New Secretary of State for Work and Pensions Andrew Smith is calling for more flexibility in pensions rules to allow people to work part-time in to retirement.

Storm clouds on the horizon

27 Jun 2002

The FSA report " Financing the Future: Mind the Gap" considers the implications of an ageing population and looks at areas of potential risk to the general public and to providers of financial services products. It is a wide-ranging report that includes the UK's changing demographics but also gives notice of the FSA supervision work on selling activities. Most financial advisers would say they already know that there is an increasingly ageing population, whose life expectancy is ...

Strike up the brand

27 Jun 2002

In my last article, I highlighted the problems of creating a successful wealth management service and the dearth of outstanding role models. I also discussed some of the challenges facing companies operating in this market, particularly the delivery of a compelling relationship model and the need to maintain a sales culture. Accepting that criticism is the easiest of observations to make, a few positive observations are now due. It is also time, perhaps, to suggest a few pointers to ...

Surefire route to simpler pensions

27 Jun 2002

The UK needs a new and simple pensions system. The current system is widely acknowledged as being complex, confusing and difficult to understand. That makes it hard for people to save for their retirement. To its credit, the Government has recognised this and we now await the results of the different simplification reviews. Following this, the Government is expected to publish its proposals for change, probably as a Green Paper before the end of the year. The real test for the ...

Take a DIP online

27 Jun 2002

The path of the mortgage industry towards electronic trading has not been smooth. It is not so many years ago that the Council of Mortgage Lenders was trying to put together its industry electronic trading initiative only to find that the two biggest players, Halifax and Abbey National, did not want to join the party. At the time, the two giants of the mortgage market believed that the right approach to e-commerce was to create their own extranet sites that only offered access to each ...

Talkback

27 Jun 2002

"Yes. It would seem to be." Dennis Taylor, Dennis Taylor Financial Services "No. Most people do not take too much notice of the rubbish they read in the press." David Walters, David Walters Financial Services "No. I think people understand what it means." Susan Varle,Reid Independent Financial Services "No, The name is still a traditional one and I think people are still seeing positive returns from their with-profits products during a negative market and as long ...

Ten years after

27 Jun 2002

Troglodytes, antediluvians, dinosaurs, fossils. Perhaps that is taking it a little bit too far but the Pensions Protection Investments Accreditation Board's chief executive John Cox believes the leadership of the insurance industry is 10 years behind the times. Good to see Cox proving his independence but perhaps a little harsh. What about those wise owls in the telecoms sector who bought the 3G licences, those forward-thinkers in the vanguard of the internet revolution or the men ...

The great barrier brief

27 Jun 2002

How can it be that, after a decade of trying to encourage electronic trading within the life and pension industry, so little e-commerce takes place? Volumes are much higher than 10 years ago but, as a percentage of the whole market, penetration remains low. How many of the comparative quotes given online are delivered as an end-product to the client? Millions of pounds have been invested, mainly by product providers, in establishing an e-commerce capability but what return have ...

Tilney now 'asset management business'

27 Jun 2002

Tilney Investment Management has sold its back-office clearance and settlement systems to the UK subsidiary of the Bank of New York for an undisclosed sum. The newly enlarged company, BNY Securities, will have Tilney as its first customer, providing clearing services to the fund manager. Tilney says the deal marks the transition of the company from a stockbroker to an asset management business. It believes by offloading its clearing system it can focus its resources on investment ...

UK average wealth reaches £26,200

27 Jun 2002

The average wealth of Britons rose by 34 per cent to £26,200 in summer 2001 from £19,522 in 1996, according to the latest Wealth of the Nation report from data analyst Caci Information Services. The joint-wealthiest postcodes are Thorntonhall, South of Glasgow and Fleet Elvetham Heath in Hampshire, with 13 per cent of households earning an income of over £100,000. Kingston-upon-Thames has the highest average individual income of £36,500, up from £33,700 ...

WPA gets flexible

28 Jun 2002

WESTERN PROVIDENT ASSOCIATIONFLEXIBLE HEALTHType: Individual private medical insuranceMinimum-maximum ages: From birth-65Maximum benefit: No maximumCover provided: Standard cover - inpatient, daypatient and outpatient cover for cancer care. Inpatient and daypatient cover for hospital treatment, specialists fees, diagnostic scans and tests. Inpatient cover for prostheses. Outpatient cover for consultations with a consultant/specialist up to ...