Money Marketing
3 September 2003

'Fund industry bullish after two years of navel-gazing'

4 Sep 2003

Cost-cutting exercises are over for most fund firms as a bullish mood grips the market, despite continued economic uncertainty, according to Jupiter. In an interview with Money Marketing, joint managing director Gordon Davidson says most groups have now slashed as many costs as they can, marking the end of a two-year "period of navel-gazing" that he blames on the bear market. Although he predicts that stockmarkets will move only sideways in the foreseeable future, he ...

Abbey National appoints Mark Stephens as head of commercial mortgages

5 Sep 2003

AMP pushes ahead with demerger despite NAB share deal

4 Sep 2003

Australian insurer AMP is holding tight to plans to demerge its Australian and UK arms despite National Australia Bank pouncing on a chunk of its shares. Last week, NAB said it had acquired 34.3 million shares in AMP at £2.46 each, extending its "strategic interest" in the company to 5.4 per cent. It was reportedly aiming for a stake of just over 11 per cent. AMP chief executive Andrew Mohl says NAB requested a meeting with the company in May and expressed an interest ...

Base rate stays at 3.5 per cent

4 Sep 2003

The MPC has decided to keep the base rate at 3.5 per cent for the second month in a row. The decision was widely expected by the market. But The Woolwich economist George Johns says: "We would not yet rule out a further cut in rates before the end of the year, particularly if the recent buoyancy of the consumer and housing markets fades away."

BFS founder and split-cap pioneer Tony Reid quits

4 Sep 2003

BFS founder Tony Reid has quit his position on the board of the BFS income and growth fund.The board says Reid, a key personality in the split-capital investment trust sector, left “with immediate effect” but it is not known under what circumstances the departure took place. It describes Reid as a “pioneer of the split-cap sector”.Reid, an accountant, founded BFS in 1985 and built the company up to a point where at one stage it had a total of 1.5bn in funds under ...

Borrowers unaware of repayment penalties

9 Sep 2003

Half of those who intend to take out a personal loan in the year ahead (two million people) have no idea that the majority of personal loans carry repayment penalties. Research from ICM Research for Intelligent Finance also reveals that over a third (16 million people) of all adults in the UK do not realise that most personal loans carry repayment penalties.Chief executive Grenville Turner says: "The fact that 50% of people intending to get a loan have no idea about repayment penalties ...

Building Societies put in strong performance in 2002/2003

5 Sep 2003

Building Societies have performed strongly in 2002/2003, increasing its assets by more than 12 per cent, according to the latest KPMG Building Societies database.The report shows total assets now stand at £193.6bn up from around £173bn.Building Society Association director-general Adrian Coles says: "KMPG's Building Societies Database shows that the sector is continuing to do well in a very competitive market."

Cofunds implements new switching charge structure

8 Sep 2003

Cofunds has introduced a 0.25 per cent charge for switching funds within its supermarket.

Consolidate to boost pension funds, says L&G

4 Sep 2003

Consolidating pension pots with one provider could boost a client's overall fund, says Legal & General. The life office says advisers should consider switching clients to lower-charging products because many providers charge existing clients at pre-stakeholder levels. L&G says even existing clients with the benefit of stakeholder-friendly charges should consider switching where the new charge structure is a flat 1 per cent throughout the life of the policy, ...

Coxell quits Marlborough Stirling after nine years

4 Sep 2003

Graham Coxell, the man behind Marlborough Stirling's deal with IFA portal The Exchange, has quietly walked away from the group. Former chief executive Coxell left after nine years with the firm and has not been replaced. Chairman and chief executive Huw Evans is temporarily filling his role. Coxell was instrumental in the deal that saw Marlborough agree the takeover of Exchange FS, The Exchange holding company, in 2001 and also oversaw flotation of the company on the ...

Derbyshire in link-up for self-cert mortgages

4 Sep 2003

Derbyshire Building Society is moving into self-cert and sub-prime mortgages with an arrangement with specialist lender Kensington Mortgages. Derbyshire has a credit-repair mortgage but says this is the first time that it will be able to offer a full range of self-cert and sub-prime loans. If a borrower is not suited to any of Derbyshire's mortgages, the society will refer them to Kensington. Derbyshire says this arrangement will suit the self-employed, contract workers ...

DWS sets up fettered Fof and corporate bond fund

4 Sep 2003

DWS Investments is offering a fettered fund of funds and a corporate bond fund seeking the best-value debt worldwide as part of its bid to break into the top 10 UK investment companies. The managed distribution Fof, to be run by managed portfolio fund manager Jonathan Arthur, will invest in DWS' flagship funds, with a 50/50s split between equity and bonds. Arthur will be able to vary this mix to reflect market conditions although there will be no more than a 60 per cent bias ...

Franklin Templeton Investments - Franklin Corporate Bond Fund

4 Sep 2003

Type: Oeic Minimum investment: Lump sum £1,000, monthly £30 Investment split: Up to 85% investment-grade bonds, up to 15% high-yield bonds Isa link: Yes Pep transfers: Yes Charges: Initial 3%, annual 0.95% Commission: Initial 2%, renewal 0.25% Tel: 0800 305306

Franklin Templeton Investments - Franklin US equity fund

3 Sep 2003

Type: OeicAim: Growth by investing in US equitiesMinimum investment: Lump sum £1,000, monthly £30Investment split: 100% in US equitiesIsa link: YesPep transfers: YesCharges: Initial 5%, annual 1.5%Commission: Initial 3%, annual 0.5%Tel: 0800 305306

Friends cuts bonuses by an average of 3%

4 Sep 2003

Friends Provident has joined the swathe of life companies making further cuts to bonus rates by reducing its payouts by an average of 3 per cent. The change affects bonus rates on some unitised policies along with final bonus rates on unitised and conventional with-profits policies. It means that a with-profits pension based on a male retiring at 65 and paying £200 a month over 20 years will now pay out £146,373 compared with £154,207 in March. A ...

Help campaign to define misselling

4 Sep 2003

Perhaps the FSA's new chief executive John Tiner - still thought to be grappling with a definition of misselling - could do with some help. This week, one IFA, supported by many of his peers, is asking Money Marketing to do just that. Most advisers agree - as does Government savings reviewer Ron Sandler - that a definition of misselling is a great idea. It would provide clarity for clients,help resolve the PI crisis and allow IFAs to cut costs, with savings passed on to consumers. It ...

Hitting the bottle

4 Sep 2003

The Diary hears that gentlemen prefer being blond. Certainly, some of the old hands in the PR world seem to be backing this up. Latest up for the bottle-blond look is L&G's raven-haired Peter Timberlake, who has recently made the momentous decision to lighten his tone. Has he been listening to too much Eminem? The Diary suspects the peroxide was slipped to him by trendsetter Darragh Leeson, who has been sporting a platinum blond look for a while. Aegon's ...

Independent view

4 Sep 2003

In my day it was quite unusual to take a gap year. So I ended up going through school with all the examinations that entailed, straight to university and more exams. I remember when I got the results, saying I will never take another exam in my life. School had involved regular exams. My university degree meant taking exams each year. I had taken eight grades on the violin, seven on the piano, five in music theory, various sports exams, the driving test and even got a first aid ...

Invesco defends Millfield pick as Dampier joins furore

4 Sep 2003

Invesco Perpetual and Millfield Group have defended star fund manager Neil Woodford's decision to pump millions of pounds into the loss-making IFA following the intervention of Hargreaves Lansdown's Mark Dampier. Misys member Master Adviser suspended all dealings with Invesco last week after Woodford's decision to inject £10.5m into Millfield despite well documented financial difficulties. Invesco said it was disappointed with the move while Millfield chief executive ...

L&G urges lenders to offer fees to keep remortgages

4 Sep 2003

Lenders need to offer remortgage incentives to brokers to curb churning, says Legal & General. The comments from L&G, which runs one of the UK's biggest mortgage clubs, follows recent research from the CML and PA Consulting revealing that churning could cost the industry £3bn in the next two years. L&G housing marketing director Steve Smith says lenders often offer a retention product directly to the customer to encourage them to remortgage with them ...

Leeds & Holbeck launch new intermediary site

9 Sep 2003

Leeds & Holbeck Building Society has launched a new intermediary website. The extension to its main e-commerce site now lets advisers access information at the click of a mouse. The site -- www.leedsintroducer.co.uk -- contains information on the Society's product range, including deals, details of fees and charges and a selection of printable forms. Leeds & Holbeck corporate sales manager Jeff Kirk says the company is ...

London & Country joins the influx into release

4 Sep 2003

Mortgage broker London & Country is the latest big name planning an equity-release team and Zurich Advice Network is offering an equity-release product for the first time. Leading IFA Hargreaves Lansdown recently announced plans for an equity-release team of three. London & Country is advertising for an equity-release manager to head and develop a specialist team. ZAN is also moving into the equity-release arena with Northern Rock's range of equity-release ...

Mike Kellard

4 Sep 2003

Even at 17, Mike Kellard showed signs of being a clever businessman. Working as a waiter in a hotel restaurant, he discovered that putting a little extra effort into making the customer's experience enjoyable earned him more in tips than wages. "You could make a significant difference not only to your customers but for your own personal benefit. That is a lesson I have learnt and I have carried it on to virtually everything I have done." Kellard joined Winterthur in ...

Money Marketing feels

4 Sep 2003

Money Marketing feels that a recent report in The Scotsman's business section is a little harsh on Standard Life. "Standard Life roadshow leaves Scots short-changed," rages the front-page headline, above a story about how Europe's biggest mutual has placed Caledonian venues at the end of a roadshow for disgruntled policyholders to air their views. "Scots will be among the last to be given the chance to air their views," moans the article.

New bonds at Northern Rock

8 Sep 2003

Northern Rock has launched a series of limited issue savings bonds. It is offering a bond at 4.50 per cent fixed until October 1st 2004, one at 4.70 per cent until October 1st 2005 and one at 4.75 per cent until October 1st 2006. It is also offering a special bond at 4.10 per cent fixed until April 30th 2004 followed by a variable rate linked to the Bank of England base rate until October 31st 2004.

Norwich Union - Prosper Guaranteed Capital Bond - issue 9

5 Sep 2003

Type: Guaranteed equity bond Aim: Growth linked to the performance of the FTSE 100 index Minimum-maximum investment: £3,500-no maximum Term: Five years Guarantee: Original capital returned in full regardless of performance in index Return: Up to 55% growth at end of term Closing date: October 3, 2003 Commission: Initial 3.5% Tel: 0845 944 4800

Opra hosts whistleblowers' workshop

9 Sep 2003

Opra is hosting a whistleblowers' workshop on new reporting guidelines for pension scheme auditors and actuaries.

Outside edge

4 Sep 2003

It was not so long ago that fund supermarkets, being the big thing in America, would be the next big thing in the UK and, although there are detractors, they have had considerable success already in the UK marketplace. Wrap accounts are now the subject of first-mover advantage as companies rush to develop distribution channels. So will wrap accounts have a major impact on our indus-try and change the way that IFAs operate? It does seem there is considerable confusion ...

Premier Asset Management - Premier Limited Editions No 11

8 Sep 2003

Type: Capital-protected bond Aim: Growth linked to the performance of the FTSE 100 index Minimum-maximum investment: Lump sum £5,000-£1m, Isa £5,000-£7,000 Term: Six years Guarantee: Original capital returned in full provided index does not fall by more than 50% and returns to at least its initial level Return: 7% at the end of year one if the index is at or above its initial level, 14% at the end of year two if the index ...

Pru pushed IFA aside to 'advise' pension client

4 Sep 2003

A (now former) client of mine rang Prudential for an enhanced ill-health annuity quote for his vesting retirement annuity plan, for which I am the servicing IFA. Rather than just receive a quote, he was instead steered towards Pru's Belfast-based "advice team", which proceeded to persuade him that what it had done for him constituted advice, whereas what I had done (fact-find, research, presentation, etc) was not. This has resulted in a client, who was happy to deal with me ...

Prudential unveils capital protected growth plan

9 Sep 2003

Prudential has introduced the capital protected growth plan, a capital-protected bond that will return investors' original capital whatever happens to the FTSE 100 index during the six-year term. The bond also has a choice of two growth options but the returns from both are based on the closing level of the FTSE 100 index on December 10, 2003 compared with an average over the last 12 months of the term. Growth option one offers 100 per cent of the growth in the index ...

RLAM's Phillips becomes Swip chief

4 Sep 2003

Scottish Widows Investment Partnership has appointed Chris Phillips, chief executive at Royal London Asset Management, as successor to Bill Main who retires later this year. Phillips will take over from chief executive Main in December after three years with RLAM, where he helped build the business through the integration of the investment arms of United Assurance and Scottish Life. He also oversaw the acquisition of Union Fund Management and the creation of Royal London Private ...

Savers losing millions each year - BestInvest

9 Sep 2003

Investors are wasting over £75m a year through initial charges from fund houses, new research from Bestinvest shows.It says investors whose IFAs maximise commission rebates could be saving a small fortune each year.Usually, fund initial charges comprise of commission paid to brokers, and an additional margin representing revenue for the fund manager. Brokers can alter these factors, by rebating commissions in order to reduce the initial charge, and negotiating ...

Sellers shun free home pack pilot

4 Sep 2003

The Government is offering free trials of the home condition report to selected estate agents throughout the UK. Nearly 40 estate agents have been randomly selected in Cardiff, Coventry, Hertfordshire and Sheffield to trial the biggest element of the Government's seller's packs. Sellers who place their property with one of these agents are offered a free HCR. Borrowers will have to pay for it when the plan is implemented in 2005. The trials are intended to monitor ...

Sofa says the worst is over in PI cover crisis

4 Sep 2003

The cost of professional indemnity insurance for IFAs has peaked, with the tide starting to turn for practices still struggling to afford cover, according to Sofa. Managing director Brian Lawless says he thinks the worst is over for advisers and that PI premiums, which in many cases have doubled over the last 12 months, look set to fall slowly. Lawless's views are encouraging news for advisers such as EZI UK managing director Kevin Morgan who has spent days completing ...

Sporting chance for Catalyst EIS

4 Sep 2003

Specialist investment firm Catalyst Investment is teaming up with a sports promoter to create an enterprise investment scheme sports fund which aims to invest in the stars of tomorrow. The fund, which will open in November, aims to raise £600,000 and will raise further funds each year. The money will provide four or five individuals with a fixed income over three years while they establish themselves in their sport. Investors will get a percentage of the individuals' future ...

Summers time and the p/e ratios are high

4 Sep 2003

When the Independent Financial Anxiety report was published by Durlacher, I marvelled at some of the price/earnings ratio figures which applied to the new rapid-growth IFA practices. For those of you not given the chance to read what gave me more laughs than the Beano, the p/e ratios ranged from 40 to 400. Four hundred is even higher than at the height of the dotcom boom and is a reflection that rather than investing in these firms, we should be running a sweep to see ...

Survey reveals IFAs' overwhelming call for provision of advice on stakeholder

4 Sep 2003

An overwhelming 96 per cent of IFAs say the Government's stakeholder proposals must contain provision for advice if they are to increase demand. A survey of 500 IFAs conducted by The Exchange reveals 64 per cent of IFAs believe that less than 10 per cent of consumers will be able to make investment decisions based on "guided self-help", and a further 31 per cent believe the level to be between 10 per cent and 25 per cent. Only 5 per cent of advi-sers say that at least ...

The late Mike Wilson

4 Sep 2003

The late Mike Wilson, the former Govett sales director, will be remembered in the way he would have wanted at the Wicked Bar, 4 Tooley Street, London SE1. Mike handled his disease, multiple systems atrophy, with great spirit and a positive outlook right to the end, when he was cared for at The Martlet Hospice, which will benefit from all funds raised on the night. The evening will start with drinks served by bunny girls and Chippendales. Tickets cost £15 in advance ...

Third-party fears as policy complaints flood in

4 Sep 2003

The Financial Ombudsman Service is concerned about third-party firms offering no-win, no-fee services on mortgage endowment complaints. The FOS is getting endowment complaints at a much faster rate than it had budgeted for, with 10,000 complaints so far this year. It says there is no need for consumers to seek out third-party services. Spokeswoman Iris Baker says: "We are looking at a lot of cases - much more than we expected. We budgeted for 16,000 cases for 2003/04 ...

Threadneedle takes middle path

3 Sep 2003

Threadneedle Investments has unveiled the UK mid 250 fund, an Oeic which aims for growth by investing in a portfolio of between 50 and 80 stocks.The fund will be managed by the Threadneedle smaller companies team led by Paul Cramp. Although the fund will invest mainly in UK mid caps, it may also invest in small caps with the growth potential to become mid caps.Threadneedle says mid caps and small caps are not completely separate as around 70 per cent of the companies which ...

Three-year fix for adverse credit

4 Sep 2003

Kensington Mortgages is offering a three-year fixed-rate mortgage for adverse-credit clients. It says it is the first specialist lender to offer such a deal. Rates on the mortgage start at 5.75 per cent and are fixed until November 30, 2006. There are no early repayment charges after the first three years. Kensington has extended the end dates for its one-year fixed and discounted interest rates which start from 3.9 per cent until November 30, 2004.

Trade deficit narrows in July - Gerrard

9 Sep 2003

The global trade deficit in goods narrowed in July. It now stands at 4.3 per cent GDP. The improvement was aided by a dramatic drop in the shortfall in non-EU trade which fell to its lowest level since May 2002 and exports to the US climbed by £400m according to Gerrard's latest figures.

Two thirds of consumers like long term fixes - L & C

3 Sep 2003

Nearly two thirds of borrowers (63 per cent) say they like the idea of long term fixed rates, according to a financial survey carried out by London & Country. Borrowers who were not keen on the idea of long term fixed rates (37 per cent) said this was down to the level of interest rate (33 per cent), redemption penalties (31 per cent) or because they preferred variable rate mortgages (28 per cent).

Van der Klugt to retire at Schroder

4 Sep 2003

Humphrey van der Klugt, manager of the flagship Schroder UK equity and Schroder income funds,is to retire in January after nearly 22 years with the group. The £621m equity fund will be taken over by senior UK equity manager Christopher Metcalfe while the £475m income fund will be run by Nick Purves, Schroders' senior equity income manager. Both will take over the funds on October 1.

White elephants?

4 Sep 2003

Few investors take into account the size of the funds they are looking to buy although a growing body of IFAs believe this is an oversight which can leave investors with funds which fail to match their expectations. But there is no consensus over which are better - small or big funds. Hargreaves Lansdown believes that small funds tend to outperform when married to good management. To make its case, HL points to the all companies sector. According to Lipper, eight of the ...

Winterthur adds Liontrust first growth fund

8 Sep 2003