Money Marketing
26 March 2003

྇% want pension compulsion'

27 Mar 2003

Over two-thirds of people think the state pension will only be available to the poorest pensioners, according to a new report from Brahm Research and Cicero Consulting. The research shows that 67 per cent of people aged 20 to 45 believe the state pension will only be available for the needy when they retire. But people do see a role for the Government in influencing future pension saving levels, with 76 per cent supp- orting greater use of the tax ...

'Crisis is unparalleled,' says Smee

27 Mar 2003

The extent of the PI crisis gripping the IFA sector is unparalleled since the beginning of regulation, says Aifa director general Paul Smee. The FSA must be consistent in its approach and be willing to communicate with PI brokers, Smee told an FSA-hos-ted workshop for IFAs in London this week. His views were supported by IFA delegates. In an electronic poll at the end of the session, 82 per cent said the state of the market was a systemic problem rather ...

'MCCB not checking broker exam passes'

27 Mar 2003

The Mortgage Code Compliance Board is not taking any steps to check if the majority of brokers met their December 31 exam deadline, according to Future Mortgages. Future's survey of 500 intermediaries this month found that 70 per cent had not been checked by the MCCB to confirm whether they had their Maq or Cemap exam certificates. Only 23 per cent had been checked and 7 per cent were unsure about what steps the MCCB had taken. Future also gauged ...

'Pru's protection surge putting strain on admin'

27 Mar 2003

Prudential is facing admin delays and may have to increase its rates as it shows the strain from vastly inc-reasing its protection market share in recent weeks, according to broker Direct Life & Pensions. DL&P says that due to term and critical-illness premium increases by rivals in the last couple of months, the Pru has found itself at the cheaper end of the market and its business volume has substantially increased as a result. DL&P says that ...

10 steps to put personal pensions back on the map

27 Mar 2003

In view of the Government's continuing inability/wilful resistance to take simple, practical measures to make personal pensions more attractive to the ordinary man in the street (who, as we all know, is utterly turned off them), here are my 10 suggestions for achieving this: •Restore waiver of premium cover as an integrated supplement, with tax relief on the premiums and a three-month deferred period. (A pox on you, Jeff Rooker, for removing ...

88% of people putting homebuying plans on hold

27 Mar 2003

Interest in the housing market has dried up, with 88 per cent of the UK population putting homebuying plans on hold, according to the property pulse index by The Mortgage Lender. The findings show that just 7 per cent are looking to buy a home and only 3 per cent have plans to sell their property. TML says people are ignoring the message about historically low interest rates and have chosen to play it safe. It says that in addition to concerns about the ...

A fair split of the profits

27 Mar 2003

One of the principal Sandler report recommendations on with-profits is that in future they should operate on a 0:100 basis. This proposal has made it through to discussion paper 20 and is therefore due careful attention. Our starting point before considering the merits of 0:100 is to review its operation and the alternative. In a 0:100 fund, the shareholders get all the profits. In return, they generally accept responsibility for the provision of capital ...

Allianz Dresdner Asset Management - Allianz Dresdner High Income Bond Fund

27 Mar 2003

Thursday, 27 March 2003 Type: OeicAim: Income and growth by investing in investment grade and non-investment grade bondsMinimum investment: Lump sum £500, Isa £1,000, monthly £50, Isa £200Investment split: Up to 50% in investment grade bonds, up to 50% in non-investment grade bondsYield: 5% gross a yearIsa link: YesPep transfers: YesCharges: Initial 4%, Isa 3%, annual 1.25%Commission: Initial ...

Artemis covers the bases with guide to investment

27 Mar 2003

Artemis Fund Management has produced a new guide to stockmarket investment and risk management. The group decided to publish the guide as investors wanted basic information to help them understand their own investments. It is being used as part of Artemis' advertising campaign in the run-up to the end of the tax year. It is aimed directly at invest-ors but will be distributed mainly through IFAs. The guide explores risk and potential returns and looks ...

Baring Asset Management predicting short war

31 Mar 2003

Baring Asset Management is predicting a short war followed by a gradual economic recovery.The group has positioned portfolios for a swift military settlement. While it says it does not anticipate a ‘boom’ it believes we will see modest but positive returns. BAM recommends that investors take an overweight position in the UK equity market, moderated by the realisation that a stable world order may take time to unfold.

Big bonuses for Standard Life bosses despite losses

27 Mar 2003

Standard Life is paying directors big bonuses and pensions despite stockmarket losses and pulling out the stops to clear regulatory solvency hurdles. The mutual is awarding performance-related bonuses to directors. Chief executive Iain Lumsden was paid £743,000 last year. This includes salary of £467,000, £16,000 benefits including car, £136,000 performance-related bonus and £124,000 as the cashable part of a long-term incentive. ...

Catalyst brings together EIS portfolio

27 Mar 2003

Catalyst Investment Group has established a second enterprise investment scheme (EIS) fund that invests in a portfolio of between four and 15 EISs.The fund aims for growth by investing in small and developing companies over a five-year term. With a minimum investment of £3,000, it is designed as an alternative to EIS portfolio management services, which many investors cannot access because minimum investment levels are high. For example, the Rathbones EIS portfolio service ...

Cheshire offers loyalty bond

31 Mar 2003

Cheshire Building Society is offering its members of two year’s standing a loyalty bond at a variable rate of 3.95 per cent.The mutual is offering the loyalty bond to members with between £1,000 and £25,000 to save and guaranteeing the rate will not fall below Bank of England base rates.

Choice needed on quotations

27 Mar 2003

We were very interested to read the article headlined, Portals in a storm, in last week's issue of Money Marketing, describing the "row" which has broken out between The Exchange and Misys' AssureWeb portal. Everybody knows that The Exchange has been the dominant portal in the industry for many years but the vast majority of IFAs and providers are enthusiastic at the fact that alternative providers are now successfully breaking this virtual monopoly. For ...

Confidence takes a tumble

27 Mar 2003

Confidence among financial services marketers has plummeted, according to the latest research from the Financial Services Forum. The marketing confidence index, based on the responses of the forum's 200 members, shows confidence has dropped significantly and steadily in the financial services sector in comparison to eight months ago. Less than 7 per cent anticipated any growth in headcount in the marketing sector compared with 20 per cent in Dec-ember and ...

Correspondant's Week

27 Mar 2003

Signing a major contract that will allow GMAC-RFC to outsource its post-completion processing is about as close as this sales and marketing director will get to having a baby. A few false starts, much pain and suffering over a protracted period and eventually the joy of delivering the signed document. As I sit here in the local hostelry with my colleagues, my thoughts drift back over the past week. Day one of week 37 dawns and we are in a hotel to ...

Datanite - Datanite

31 Mar 2003

Monday, 31 March 2003 Aim: Growth by investing in the development and manufacture of silicon carbide technology used in the power and telecommunications industriesMinimum investment: Lump sum £2,000Opening/closing dates: March 28, 2003/April 5, 2003Charges: ImplicitCommission: Initial 2.5%Contact: www.datanite.co.uk

Destini buys up fourth company

27 Mar 2003

National IFA Destini has made a fourth buy which it says keeps it on track to become a top 15 IFA within two years. It latest acquisition is NorthEast-based firm Southwood which has five RIs. The company will join Graham Scott Financial Planning Consultants, Blackfriars and Private Medical Direct in the group, bringing Destini's total RIs to 20. Destini says it is aiming to achieve turnover of £10m by the end of the year. But since its November ...

Double blow for Swip as CIO and retail chief quit

27 Mar 2003

Scottish Widows Investment Partnership has been left reeling after the double resignation of its chief investment officer and head of retail fund management. The departures of CIO Sandy Nairn and head of retail Graham Campbell are a huge blow to Swip, which has made great strides after the turmoil of its absorption into Lloyds TSB group in March 2000 which saw Hill Samuel merged with Scottish Widows Investment Management. Nairn and Campbell are reported ...

Duncan's Discounts

27 Mar 2003

Investment Editor Chris Duncan sets out some of the best deals in the Isa market Gartmore is offering a 2 per cent discount off the initial charge on investments into its focus funds until April 30. The initial charge is now 3 per cent. The fund manager is also reducing the initial charge on its cautious managed fund to 3 per cent, a 0.5 per cent reduction. Isis Asset Management is reducing the initial charge by 1 per cent across the ...

Executioner's tale

27 Mar 2003

Thousands of mortgage intermediaries working throughout the UK must now prepare for the latest "service" to be marketed nat-ionally in the press, namely execution-only mortgages, with a further benefit for respondents to get a share of the procuration fee. Execution-only mortgages have been available for the enlightened consumer for many years, so why the fuss? We know that competition for the mortgage borrower is fierce between lenders but now the battle ...

Final-salary trustees warned of legal threat over wind-up

27 Mar 2003

Trustees of final-salary schemes could face legal challenges from non-retired members if they lose out when schemes wind up, warns Gissings chief economist Roger Nightingale. Scheme trustees could be vulnerable to litigation if regular payments were made at a rate that funds could not sustain because of underfunding, Nightingale told delegates at the Pensions Management Institute conference in London last week. But trustees say that alth-ough they are obliged ...

Friends challenges firms to match one-day admin

27 Mar 2003

Friends Provident is throwing down the gauntlet to pension competitors, saying only those able to get paperwork out to clients within 24 hours can claim true end-to-end processing capability. The company says IFAs can tell if a product provider's claim of straight-through processing is correct by being able to send policy documents to members within a day of application. It says that because of this capability it is able to set up a scheme in an afternoon ...

FSA flood warning

27 Mar 2003

IFAs will have a busy time of it in the next 12 months, if only in dealing with the masses of publications forthcoming from the FSA. In total, starting from this month there are 81 publications on the timetable before the end of the year. These take the form of discussion papers, consultation papers, feedback statements, draft rules or policy statements and cover topics as varied as details of the menu system expected in June to a review of the stakeholder ...

Fund firms press pharms to boost developing world

27 Mar 2003

A coalition of major fund management groups is warning pharmaceutical companies that unless they boost access to urgently needed medicines in developing nations they will face a damaging backlash. The fund firms, which include Isis, Schroders and Jupiter, have written to 20 leading pharmaceutical firms urging them to be more proactive in their efforts to combat Aids and other diseases in poorer countries such as in sub-Saharan Africa. They are particularly ...

Get on route 166

27 Mar 2003

The fears surrounding CP166 are understandable, as inefficient products and processes will be revealed to all and the changes to the system will force companies to drop products that incur high charges in favour of those that operate more efficiently. The wait-and-see attitude, with many organisations holding on to see what their counterparts will do, could be a significant risk. The challenges are substantial and will not be overcome immediately. There ...

HSA cashplan offers premium waiver on job switches

26 Mar 2003

Healthcare cash plan provider HSA has introduced a cash plan for the employee benefit market, which waives premiums for one month for people who are changing jobs.The HSA corporate cash plan is available on a company paid or voluntary basis. It has four levels of cover with weekly premiums ranging from £1.70 to £6.80 for individuals and between £3.40 and £13.50 for couples and families.The plan includes cash benefits for dental and optical care, ...

HSBC recruits global investment chief

26 Mar 2003

IFAs facing renewed anquish in PI crisis

27 Mar 2003

Many IFAs feel they have been fighting their own silent battle since the professional indemnity insurance market fell apart last autumn. The situation is so grim that hundreds of IFAs which have resolutely maintained their independence for years may finally be persuaded to join a network to obtain cover. But will it be that easy? Although the LIA has called for the FSA to extend a PI waiver to all IFA firms with a turnover below £500,000, according to ...

Inside Edge - Daniel Godfrey

27 Mar 2003

Can investment managers be trusted to provide a true and fair view of their past performance record and the bearing that it may have on the future? Based on past performance, the answer would appear to be no. While there is no reason why a commercial organisation should not be allowed to put its best foot forwards, it should not be allowed to exploit the information gap between itself and consumers to create a false impression. The industry has engaged ...

Investment view

27 Mar 2003

More than ever, the words "protected" and "low risk" are being wrapped around products to persuade people that they do not have to throw caution to the wind to put their money in savings products. Sales of structured products - the index-linked bonds most associated with capital-protection guarantees - rose by 15 per cent last year, when 68 providers offered more than 300 different products. This is remarkable, considering that many of these bonds may not return ...

Julian Gibbs

27 Mar 2003

Due to higher taxes and much higher living costs in the UK than in most other countries, more people are retiring abroad or buying holiday homes in Europe, Florida and even Australia, New Zealand and South Africa. There are, however, many pitfalls when buying abroad and the cost of mortgages can vary enormously, from around 3.5 per cent in France to about 15 per cent in South Africa. Many of the leading mortgage brokers and IFA networks, such as Chase de ...

Keydata bond offers two annual income deals

27 Mar 2003

Keydata Investment Ser-vices has set up an extra income plan offering a choice of either 6 or 8 per cent annual income over five years depending on the choice of capital protection selected. The first version of Plan 4 offers investors the choice of either 6 per cent annual or 1.44 per cent quarterly income or 32 per cent capital growth. The second option gives investors the choice of 8 per cent annually or 1.93 per cent quarterly or 43 per cent capital ...

L&G bond cushions against FTSE falls

28 Mar 2003

Legal & General has established the index growth and protection plan, a guaranteed equity bond that is linked to the FTSE 100 index for a term of five and a half years.The bond guarantees the return of all the original capital at the end of the term regardless of the performance of the index. Investors also receive 70 per cent of any growth in the FTSE 100 during the term, but this operates as a participation rate. For example, if the FTSE 100 index increases by 50 per cent, the ...

Lights, camera, action for Towers EIS

31 Mar 2003

Towers of London is an enterprise investment scheme that aims to raise £10m to finance a number of films.The company was founded in 1946 by Harry Towers and has produced 100 films including Agatha Christie's 'And Then There Were None' starring Sir Richard Attenborough, 'Dracula' starring Christopher Lee, and 'Bullet to Beijing' starring Michael Caine.The company has remake rights to a number of well-known films and radio series it developed in ...

Maisons to be cheerful

27 Mar 2003

I want to build or buy a property in France. What do I need to know? This may prove to be a good time to purchase a property in France as prices compare well with those in the UK. With low European interest rates, money is cheap. You must remember that the house purchase procedure is different and preparation is vital to avoid the pitfalls caused by these differences. First, you must secure a euro-denominated mortgage. There are a few UK banks ...

Margetts Fund Management - Gerry Anderson Productions

31 Mar 2003

Monday, 31 April 2003 Aim: Growth by investing in a new television series of Captain ScarletMinimum investment: Lump sum £25,000Opening/closing date: March 7, 2003/May 29, 2003 Charges: Initial 5.5%, annual up to 1.5%Commission: Initial 3%, renewal 0.25%Tel: 0121 236 2380

Mortgageforce picks development chief

26 Mar 2003

Broker franchise Mortgageforce has appointed Steve Salter as development manager to take responsibility for the group's growth across the UK. Salter joins from Prudential where he worked for 21 years in a variety of sales and management roles, including as an area manager. Mortgageforce says Salter's experience will help franchisees continue to build their business.

NDF offers choice of indices

27 Mar 2003

NDF Administration has established a guaranteed equity bond that provides investors with a choice of annual and monthly income linked to either the FTSE 100 or Dow Jones Eurostoxx 50 indices.The bond has a term of five years and two months. Investors who choose to link their investment to the FTSE 100 can choose annual income of 6 per cent gross a year or monthly income of 0.47 per cent gross. Those who opt for the Dow Jones Eurostoxx 50 index can select annual income of 7 per ...

Now Webline enters portal row

27 Mar 2003

Webline is the latest portal to join the row between its rivals AssureWeb and The Exchange about which is gaining most ground in the IFA marketplace. Webline was set up in 1995, and says it processes around one million quotes a month, which it estimates is 400 per cent more than Bankhall's IFA Engine and Misys' Assure-Web combined. AssureWeb refuses to disclose its level of quotations, saying it prefers to focus on delivering end-to-end processing. But ...

Out of context

27 Mar 2003

•"Just call me Miss Compliance." - CIS's Alison Richardson moves to the compliance department. •"Like the French revolutionnaries, we want Liberty, Equality, Flexibility." - PMI president Ian Eggleden to pensions minister Andrew Smith on the day that the Iraq war started. •"I won't comment on the suitability of following the French today." - Pensions minister Andrew Smith. •"I've just had a very important meeting ...

Partnership shape

27 Mar 2003

The Millfield Partnership had somewhat unorthodox beginnings. "Millfield was formed out of adversity, really," says Roger Brosch, sales director and one of the partnership's creators. The founding partners were employees of the French group, General Assurance National, which had been working to build an IFA arm. When Gan chose to withdraw from British operations and the plans were shelved, a small group broke away to start a new company with 42 advisers, ...

PI-eyed vision of the FSA

27 Mar 2003

As the professional indemnity insurance crisis stumbles on, I think it is important that the IFA community is made aware of the following. The FSA has confirmed to me that, over the last five months, 41 per cent of IFAs have still failed to achieve PI insurance of any nature. Even worse, of the 59 per cent that have managed to achieve PI insurance in the last five months, the FSA has confirmed that the majority of cover is non-compliant. Furthermore, of ...

Poor service is costing us money

27 Mar 2003

I am writing in support of the recent comments raised by both Julian Stevens and Nick Bamford regarding the service standards we IFAs are forced to suffer these days. I do not think that it does any good necessarily to name names but there are particular incidents of companies where service standards are much worse than those of others and they must be called to account. Companies do not seem to either understand or care that, when they provide faulty ...

Property funds shut until prices go down

27 Mar 2003

Scottish Widows has temporarily shut its property funds to new business because of concerns about the commercial property market. Widows says that the popularity of property as an asset class in the current turbulent stockmarket environment is driving up prices to levels where it is unwilling to buy. The company says it is being forced to stockpile cash and this is affecting returns for existing customers. But Widows believes there will be a price correction ...

R&SA hit with £950,000 endowment fine

27 Mar 2003

Royal & SunAlliance Life and Pensions has been hit with a £950,000 fine by the FSA for mortgage endowment related failings.

Ride on mortgage-go-round will cost lenders £3bn

27 Mar 2003

Chasing new mortgage business will cost lenders £3bn over the next two years and is one of the biggest challen-ges facing the industry, says a report from PA Consulting Group and the Council of Mortgage Lenders. The report, called Stuck on the Mortgage-go-Round, says this spiralling cost of what it describes as "churning" mortgages comes from lenders having to find and retain new customers and develop innovative products. The report, based on ...

Royal London's Bright Grey goes live

31 Mar 2003

Bright Grey, the new protection provider owned by Royal London, goes live this week after 18 months of planning.

Safety thirst

27 Mar 2003

Speaking to a TV presenter in a studio last Friday, I was reassured to find that his attitude to the conflict in Iraq is much the same as mine - that we could not possibly know for certain what the outcome of this conflict would mean for markets. As a consequence, I intend tomake this column, as far as possible, a war-free zone for the next few weeks. This will, I know, be difficult to accomplish. Last Thursday saw me at Celtic Manor for one of the IFA ...

ScotLife claims win over Virgin

27 Mar 2003

Scottish Life International is claiming victory in its challenge to Virgin and SG Asset Management over whose fund would perform best over five years. In 1998, SLI bet that its protected deposit bonus 95 fund would outperform Vir-gin's UK index-tracking fund and SGAM's newly launched UK growth fund, with the losing companies donating £6,000 to a charity of the winner's choice. Despite much publicity, only Virgin - which has made good the ...

Seven more funds links for Pru WP fund

26 Mar 2003

Prudential has added seven new fund links to the Prudential Bond including funds from Newton and Invesco Perpetual. Switches out of the with-profits fund will continue to incur market value adjusters but the company denies the move was prompted by falling sales of with-profits. 

Standard opens up

27 Mar 2003

The publication of Standard Life's report and accounts and FSA returns may help settle some of the recent arguments about the insurer's financial position and investment strategy over the last year. It puts advisers in a better position to advise clients. The sheer scale of the equity loss in the last few years, even if it is a paper one, is staggering, although we have some sympathy with Standard's defence that for two years previously it ...

Stretching the point

27 Mar 2003

The future growth of sub-prime and non-standard lending will be influenced more by the uncertainty of Britain's overall economic climate rather than any collapse caused by consumer income-stretching or the entry of local mainstream or foreign players. Last year, the UK's non-conforming lending population decreased to an estimated 7.8 million adults following an apparent five-year trend. Conversely, financial analysts Datamonitor believes the non-standard ...

Take it to the limit

27 Mar 2003

There has been general agreement in the industry that the Inland Revenue's tax simplification proposals for pensions are a good thing. According to the consultation paper, over 99 per cent of people will be free to save more into pensions than they can at the moment. Cynics might argue that the number of people caught by the limit is more than suggested, maybe 2 per cent or 3 per cent, but this is just splitting hairs. What is important, is that the percentage ...

Talkback

27 Mar 2003

"Yes. Until the FSA clears up the definitions of misselling and sorts its problems out with the underwriters, what are we meant to do?" Stuart Feast, Feast Noble & Co "No. I would not be com-fortable with continuing, even with the waiver. You could be open to future claims. Any IFAs who takes it is stark raving mad." John Ryan, Ryan's Financial Services "No. It is so dangerous to operate without PI cover. If the FSA did give you the waiver, ...

The meaning of PI

27 Mar 2003

According to Boswell, Sam-uel Johnson once saw two women shouting across a street from the first floors of two houses opposite each other. "They will never agree," he is alleged to have said, "They are arguing from different premises." Which brings me to professional indemnity insurance. At the heart of the chaotic PI market for IFAs, there lies a divergence bet-ween the FSA and PI underwriters over what PI should deliver. Is it an essential pillar of ...

Trade bodies urge rethink on Isa tax credit

27 Mar 2003

Six trade associations are clubbing together to urge Chancellor Gordon Brown to scrap plans to abolish the 10 per cent tax credit on equity Isas in April 2004. The Investment Management Association, the Pep and Isa Managers Association and four other bodies, including Aifa and the AITC, have written to the Chancellor seeking an urgent meeting to discuss the effect that dropping the credit would have on savings. The six, which include Apcims, the European ...

Umbrella opens to cover low-risk IFAs

27 Mar 2003

The first captive offshore professional indemnity insurer is all set to offer small to medium-size IFAs shelter from the PI storm. Trading under the Umbrella brand, the unnamed group is planning to offer up to 500 firms PI cover. The scheme is being specifically aimed at "low-risk" firms with turnover below £1m. Law firm ProAct will operate as a project manager in assessing potential member firms using filtering questions. Successful firms must fit ...

War in Iraq blamed for falling house prices

27 Mar 2003

House prices have fallen for the first time in over two years because of the war with Iraq and continued economic uncertainty, says the Royal Institute of Chartered Surveyors. Its housing market survey for England and Wales for the three months up to February reveals that prices fell by around 5 per cent. Although the fall is modest, it is a reversal of the continued rises since the last quarter of 2000. The RICS says prices have slipped back by varying ...