3 June 2009
More than 65 per cent of EU parliamentarians favour greater political union to help overcome future financial crises, but only 21 per cent of UK and Ireland MEPs agree, according to Cicero Consulting.
I suspect I was not the only person who, when confronted last Christmas by the massive Aviva rebranding campaign, questioned the value of such spending in the current economic climate. In recent weeks, however, I have formed a very different view.
Over the past few weeks, I have been looking at the impact of the proposed 2009 Budget changes to income tax - notably the introduction of a top rate of 50 per cent and the removal of higher- rate tax relief for pension contributions made by those with incomes of more than 150,000. I have also been reviewing the alternatives to pension investments, focusing on investments whose taxation treatment will be affected by the Budget.
The Association of British Insurers has warned regulators and governments against a “lazy adoption of banking rules” to other areas of financial services.
Acuity CapitalCF Acuity Real Active Management Fund
The number of live mortgages available to intermediaries has dropped for the first time in two months, according to Mortgage Brain.
Advisers have expressed surprise over the news that Keydata has been placed in administration on the grounds of insolvency.
Aegon has confirmed that 147 employees are facing redundancy as a result of its decision to pull out of the UK group risk market.
Aifa director general Chris Cummings has hit out at IFA Promotion over the way it communicates with other trade bodies and the lack of an IFA response to the Natwest advice adverts.
Once key drivers of the American economy, the bankruptcies of General Motors (GM) and Chrysler may cost a quarter million people their jobs and hit the country hard.
Angela Eagle has replaced Rosie Winterton as pensions minister, as Prime Minister Gordon Brown's reshuffle continues.
Association of British Insurers chairman Archie Kane has called for the calibre of FSA supervisors to improve and warned that the relationship between the regulator and firms is in danger of becoming a parental rather than adult one.
Ascentric is teaming up with iShares to host a series of ETF masterclasses.
Ashmore Investment Management has launched sterling share classes for two existing emerging market Luxembourg-domiciled Sicav funds.
Australia’s economy has unexpectedly escaped a technical recession, according to the latest official figures.
Aviva has started mailing voting packs inviting one million eligible policyholders to vote in the proposed reattribution of the firm's inherited estate.
Specialist funds have drifted in and out of favour in recent years. Right now, the IMA's statistics would show them out of favour, at least compared with the larger sectors such as corporate bonds and equity income.
The Bank of England has decided to hold the base rate at 0.5 per cent yet again this month as it continues its quantitative easing strategy.
The Bank of England’s Monetary Policy Committee (MPC) today voted to hold its base interest rate at 0.5% and vowed to press ahead with £125 billion asset purchase plans.
Barclays is in talks with BlackRock over a deal for the sale of its iShares and Barclays Global Investors business.
Investment veteran Dr. Mark Mobius says a market correction in emerging markets equities of up to 20 per cent could be seen over the forthcoming months.
Ben Bernanke, the chairman of the Federal Reserve, said in testimony to a congressional committee on the American budget that he still expects signs of a recovery by the end of 2009.
Lloyds Banking Group chairman Victor Blank has defended the bank's level of due diligence carried out before it took over HBOS.
Blue Sky Asset Management has launched two plans with one offering income at more regular intervals.
Blue Sky Asset Management says it does not believe the insolvency and administration of Keydata Investment Services will lead to any loss for investors.
Bluefin Advisory Services is offering its staff and advisers access to a CII diploma qualification support package.
Alliance Boots has appointed former HBOS chief executive Andy Hornby as its group chief executive.
Santander has recently announced that it is to scrap its Abbey, Bradford & Bingley and Alliance & Leicester brands on the high street while the Lloyds Banking Group looks to trim the edges of its basket of brands.
Bright Grey has enhanced its income protection plan to include a rehabilitation service provided by Health and Case Management Limited.
The FSA says building societies must re-examine their risk management and business models in the areas of liquidity, wholesale funding and lending to ensure they are aligned.
The theme of the Association of British Insurers' biennial conference on June 9 is Today's Challenges, Tomorrow's Opportunities, which fits perfectly with the debate over reform of financial advice.
Capita Group has acquired the commercial loan administration Capmark Financial Group.
Castlestone ManagementPorcupine Absolute Return Fund
Cavendish Asset Management has expanded its fund range with three regional equity funds and a technology fund.
Susan Boyle may not be the only one feeling unloved and discarded at the moment, especially since the recent FSA and Council of Mortgage Lenders conferences saw the sector playing the blame game.
The Citizens Advice Bureau will continue to offer its MoneyPlan initiative following the success of a two-year pilot, which CAB says provided 1131 consumers with generic financial advice.
Clayton Euro Risk has revealed it has done more than £20bn of due diligence on mortgage asset acquisitions since 2007.
Three men who were behind a chain of false bank accounts used to con five Aviva directors out of hundreds of thousands of pounds have been jailed at Southwark Crown Court.
Once I had a fund and it was a gas - soon turned out, had a heart of glass.
Cru founder Jon Maguire says the firm plans to become an asset manager in a bid to take on the direct fund management of the £350m CF Arch cru fund range.
Alistair Darling is to remain as Chancellor in Gordon Brown’s latest Cabinet reshuffle.
Diversification across more than one multi-manager is important for investors given the increasing use of exchange traded funds and cash in multi-manager funds, according to Defaqto.
Dennehy Weller managing director Brian Dennehy says the death of dividends has been exaggerated.
Annual inflation in the Organisation for Economic Cooperation and Development (OECD) area continues to slow according to the latest OECD Consumer Price Index.
IMA chief executive Richard Saunders has urged the investment management industry to engage with Europe to help improve forthcoming directives.
Do you remember that one of the five work streams set up when the retail distribution review was launched in 2006 was about customer access? The FSA has realised that raising the quality of advice would increase the cost, pushing it out of some people's reach.
The Advertising Standards Authority received 320 complaints about 220 financial promotions in 2008, according to figures obtained by commercial law firm Beachcroft LLP.
Coventry Building Society First Time Buyer 5.99% Five Year Fixed
The Financial Services Authority head of retail investment policy Rory Percival has challenged advisers for the way wrap charges are passed on to the consumer.
Last week's revelation that the chair of the joint Parliamentary committee on human rights has called for a Government explanation as to why IFAs are not subject to the 15-year long stop is welcome news.
The value of fines handed down by the FSA in the last year jumped 514 per cent to a record £27.3m.
The FSA has published details of the interim regulations for the sale and rentback market that it is introducing on July 1.
The Financial Services Authority says it is possible some wrap providers will exit the market if they fail to make a profit or lose their existing financial backing.
The FSA has warned that the insurance industry must overcome “long-standing structural issues” including poor persistency and high distribution costs.
The FSA is today proposing to extend interim rules which allow separate compensation cover for customers with deposits in two merging building societies until December 2010.
The FSA has today announced that the confirmation hearing for the proposed transfer of Britannia Building Society business to Co-operative Bank will be held on June 26.
The Financial Services Compensation Scheme has declared Glasgow-based Echelon Wealth Management in default and says up to 900 customers could claim for compensation.
The FTSE 100 rose above the 4,400 barrier this morning ahead of the Bank of England’s announcement on interest rates at midday.
The FTSE 100 opened higher at 4,420 this morning recovering previous ground lost after a boost from Wall Street overnight.
The FTSE opened at 4,477 this morning but slipped from recent highs with pressure on banks and mining stocks.
Amid all the jetsam and flotsam of failed regulation over the past 20 years or more, one of the few succ-esses in all that time has been the growing influence of the Financial Ombuds- man Service.
GLG has named Phil Pearson and Anthony Burton as managers of the £41m GLG technology equity fund.
House prices rose by 2.6 per cent in May, according to the latest Halifax house price index.
HSBC has relaunched its rate matcher scheme whereby any mortgage holder can have their current rate matched and fixed direct from the lender.
HSBC has revealed that it will be shutting down its sub-prime high street lender, Beneficial Financial.
Former Chase de Vere marketing manager Ian Millward has been appointed as head of UK distribution at investment boutique Jubilee Financial Products.
The two strongest performing funds during May were both Indian equity offerings, which received a boost following the country’s recent elections, according to Lipper.
I was away speaking at the Money Marketing retirement summit in Monte Carlo the other week when I was asked a seemingly simple question (over the internet) by one of the members of our ever-growing pension community on Twitter.
Investor confidence turned positive last month up 35 points since last November, according to statistics from the Investment Management Association.
A volatile ride lies ahead for emerging markets according to Templeton's Mark Mobius who says a market correction of up to 20 per cent is not unconceivable.
Jubilee Financial Products and NDFA has contacted administrators to declare interest in purchasing Keydata Investment Services.
Julius Baer is launching a Luxembourg domiciled Sicav Russia fund in the UK market.
Keydata Investment Services is launching two FTSE-linked structured products.
Keydata Investment Services has today been placed into administration on the grounds that it is insolvent.
Keydata Investment ServicesDynamic Growth Plan Plus 17
Keydata Investment ServicesExtra Income Plan
A minor amendment to a recently introduced French law offers opportunities for UK investors in French sale and leaseback schemes, according to Pierre & Vacances.
The founding seven shareholders of platform migration service Legacy Asset Systems have been revealed.
Legal & GeneralCapital Protected Triple Index Plan 2
Aviva’s Lifetime platform will now be known as the Aviva Wrap following the company’s re-branding this month.
Lloyds Banking Group has drawn up a list of five firms looking to buy parts of Insight’s Fund Management arm, according to reports.
Lloyds Banking Group is set to axe another 510 staff from its retail divisions.
Lloyds Banking Group has revealed that both Intelligent Finance and Bank of Scotland will cease new lending through intermediaries.
Lloyds Banking Group will become the first UK state-aided bank to begin to pay bank its £4bn Government loan.
The FTSE 100 made a strong start this morning opening up at 4,399 with miners pushing the index higher.
Three weeks remain before publication of the RDR consultation paper and the pressure is on the FSA to contrive workable solutions to the problems which occur if the feedback statement initiatives are implemented.
LV= Asset Management (LVAM) has expanded its property team with the hire of Henry Webber.
Lazard Asset Management’s Patrick Ryan is adding stocks he says will not only survive a recession, but also participate in a rally, as the world’s economic future is too difficult to call.
Treasury Select Committee chairman John McFall MP has slammed Lloyds Banking Group chief executive Eric Daniels for allowing staff to be made aware of job cuts in the press before being told by the bank.
Meteor Asset ManagementFTSE Income Plan
Almost 60 per cent of IFAs fear regulatory backlash over their asset allocation decisions in the wake of recent stock market volatility, new research from MetLife Europe shows.
City minister Lord Myners has hit out at the European Commission’s proposals for financial regulation, over concerns they will take control away from the UK’s national supervisors.
House prices rose by 1.2 per cent in May, according to the latest Nationwide house price index.
A new UK property activity index has revealed that the housing market is showing signs of improvement.
Newcastle Intermediary ServicesGuaranteed Capital Performance Account – Issue 6
OBSR has withdrawn the rating on Jupiter’s undervalued assets fund as part of its latest review.
Three funds have been upgraded from single-A to double-A ratings by OBSR.
Odey Asset ManagementUK Absolute Return Fund
Another week and another rally. By the end of last week, UK shares had rebounded by nearly 30 per cent from the March low - and this despite the impending collapse of General Motors. Perhaps of greater importance is the length of the rally. Recoveries of this nature seldom run for more than eight or nine weeks unchecked. This one is heading for a full three months.
Third party administrator OPAL says it will offer ongoing support for all structured product portfolios following Keydata being placed into administration.
Pearl Group has finalised a debt restructure deal which will slash the firm's £3bn debt and secure a £500m capital injection from investor, Liberty Acquisition Holdings, according to reports.
Pension Insurance Corporation has announced a buy-in agreement with the trustees of the Warwick International Group Pension Scheme.
Pictet FundsPF (Lux) Agriculture Fund
The Budget introduced new rules that restrict higher-rate tax relief on individual pension contributions with immediate effect. On the surface, these changes may appear unfavourable but clients may still be able to benefit if they seek the right financial advice.
I am currently taking the maximum income drawdown from my pension fund. I am 61. Would now be a good time to convert to an annuity?
The Privalto Millennium tracker fund is an Oeic that combines the low cost and liquidity of passive investment with active asset allocation.
The figures say it all really. IFAs are responsible for just 3 per cent of complaints to the FOS and only 33 per cent of those are upheld. Banks on the other hand are responsible for 59 per cent of complaints and a whopping 69 per cent are upheld.
PricewaterhouseCoopers says that its preliminary view of Keydata assets is that customers' funds have been held in secure custody accounts.
While regula-tion of the mortgage industry can in many ways be held up as a success story, anyone looking at the disciplinary actions being taken by the FSA must recognise that the current regime is not wholly effective and adjustments are necessary.
The UK stockmarket has rallied aggress-ively in recent weeks. The FTSE All-Share index has climbed by close to a quarter since the low point in early March on the back of hopes that the combination of monetary and fiscal stimulus around the globe will kickstart end- demand in the near future.
Whisper it quietly but it appears that emerging markets are set to lead the comeback.
Last week, Santander revealed it would be scrapping its retail brands Abbey, Alliance & Leicester and Bradford & Bingley and bringing them all under the single brand.
Rising government bond yields are the result of the bubble in the asset class bursting, not a sign that quantitative easing is failing, according to economists at Morgan Stanley.
Financial services companies have a tough enough job when it comes to creating a brand and an even greater one protecting it.
Ruffer Investment ManagementCF Ruffer Japanese Fund
The CF Ruffer Japanese fund aims for growth by investing mainly in Japanese equities but its wide remit allows for investment in other assets and regions if deemed necessary.
RWC Partners has appointed former Threadneedle manager Mike Corcell to launch a US long short equity fund.
Mike Corcell, former manager of the Threadneedle American Crescendo fund, has joined RWC Partners to launch an American long/short equity fund.
Sarasin & PartnersSarasin EquiSar Global Thematic Fund (Sterling Hedged)
Sarasin & PartnersSarasin Global Equity Income Fund (Sterling Hedged)
Sarasin & Partners has introduced two funds that are based on its equisar global thematic and global equity income funds, but remove foreign currency risk by hedging investments back into sterling.
Have the decisions taken by Barclays and BP this week, to throw in the towel on final salary pensions, marked the beginning of the end of top-quality private sector schemes?
Schroders has launched its first managed currency fund.
The Securities & Investment Institute has developed a stand-alone, higher level qualification for existing wealth managers.
Skandia Investment ManagementGlobal Dynamic Equity Fund
South Koreas GDP grew at the expected 0.1% in the first quarter compared with the previous quarter, according to the Bank of Korea.
The Consulting Consortium has appointed Sandro Buttaci as business development manager on its customer engagement team.
Thames River has taken over the management of Quantum’s UK absolute income fund.
Quantum Asset Management has transferred the management of its UK absolute income fund to Thames River Capital.
There are challenges when selecting emerging markets equity funds for a multi-manager approach. The sector tends to be treated as a small, marginal and amorphous category within an investment portfolio.
Ecclesiastical is among the more unique investment houses out there, with a strong charity focus and a background in insuring churches.
Last week Money Marketing revealed that protection underwriters predict lifestyle factors will increasingly be taken into account in protection policies for younger people.
A third of all equity release referrals came from IFAs over the first quarter of this year, according to Hodge Lifetime.
Variable annuity sales were up 7 per cent in the first quarter of 2009, to £370m, compared with Q4 2008, according to Watson Wyatt.
Shadow Chancellor George Osborne has claimed that the Conservative Party's economic policies will present a big opportunity for the IFA sector.
True Potential has enhanced the asset allocation tools available on its business platform to include risk assessment tools from Morningstar.
Arrears on mortgages in UK sub-prime residential mortgage-backed securities have more than doubled over the last 12 months.
Angelo Mozilo, the former chief executive of US sub-prime mortgage lender Countrywide, faces charges of fraud.
I have only ever had one complaint and it was not upheld. I told him not to dump equities to buy bonds, he thought otherwise Bonds tanked and markets shot up. Oddly enough, he blamed me for his loss. With pension and endowment mis-selling, advisers have become a soft touch for a spot of compo.
The market is too confident that Britain is heading into a V-shaped recovery, according to Neil Woodford, the head of investment at Invesco Perpetual.
Invesco Perpetual income manager Neil Woodford believes that an economic recovery is still three to four years away.
Since our last contribution to this column at the beginning of March titled, Markets can go up as well as down, risk assets around the globe have soared. At the time, we commented that if reflationary policies undertaken by government authorities are seen as taking hold, equity markets and other risky assets would likely enjoy an explosive rally. The flip-side, of course, was that safe-haven assets like government bonds would get crushed.
Yorkshire Building Society is the first building society partner to go live with Legal and General’s online point-of-sale business system.
Chief Secretary to the Treasury Yvette Cooper is to replace James Purnell as Work and Pensions Secretary.
Zurich Financial ServicesProtected Capital Account