Money Marketing
30 April 2003

'Only one fund on target to repay mortgage'

1 May 2003

Just one of the 276 funds most likely to have been chosen for a Pep or Isa mortgage five years ago is on course to repay the loan, says Hargreaves Lansdown. Analysing the performance of funds in the UK all companies and UK equity income sectors - the two most popular with homeowners - HL has found there are just six with a current value in excess of the likely sums invested. Only one - Rathbone's special situations fund - is on target to pay off a £67,000 loan, assuming ...

'Worthwhile guarantee' from Liverpool Victoria on endowment promise

1 May 2003

Liverpool Victoria's endowment promise appears to be a "worthwhile guarantee" because it is not pegged to the growth of the fund's underlying investments, unlike rival life offices, according to Misys. In a research bulletin sent out to Misys' 6,000 members, head of research Dale Tranter questions the validity of the endowment promises made by life offices Norwich Union, Standard Life, AMP and Liverpool Vic. He concludes that Liverpool Vic's promise is solid because ...

53 jobs go as Abbey offshore arms shut

1 May 2003

Abbey National is closing two of its offshore life insurance subsidiaries with immediate effect at the cost of up to 53 jobs. Scottish Mutual International and Scottish Provident Ireland, the company's two Dublin-based life operations, closed their doors to new business this week. At the end of last year, the two firms held over 125,000 policies and nearly £4bn of assets under management. They conducted business in the UK, Ireland, Europe, the Far East and the Middle East. Abbey ...

A-day chaos ahead?

1 May 2003

Whatever pension simplification rules the Inland Revenue finally puts in place, over the next two years, a lot of people are going to need detailed advice about a large amount of retirement savings. Human resources consultants Mercer says around 290,000 people are on track to hit the £1.4m lifetime limit at some stage in the future under the current Inland Revenue retirement saving proposals. That number could double within 15 years if earnings growth outstrips prices. The ...

Attention to detail?

1 May 2003

A leading national daily, which has received numerous awards for financial journalism, recently printed an article about long-term care, from which the following is an extract. "For example, a man aged 60 can expect to pay £109 a month with PPP Lifetime Care for long-term care benefits of £15,000 each year, which will increase in line with inflation. Benefits are paid after just 13 weeks. Norwich Union, however, would charge £95 a month for the same level of benefits ...

B&B buys up Meehan and ditches takeover defence

1 May 2003

Bradford & Bingley is buying high-net-worth IFA Holden Meehan in a move which marks its first purchase since demutualising in 2000. The deal, for an undisclosed sum, will see London and Bristol-based Holden Meehan branded Charcol Holden Meehan and become an independent subsidiary within the B&B Group. It also means that B&B's own takeover protection will expire 30 months early, leaving the FTSE 100 group open to a possible takeover. B&B says it never intended ...

Battle lines are drawn

1 May 2003

If you are sick of being kept on hold by life offices, join Financial Ltd director Charles Llewellen Palmer in his campaign of action. When providers ring you about a client, he suggests you: •Put them on hold. •Find an old Dictaphone and play music into the mouthpiece. •Ask the life office for an authority letter from the client, original or witnessed by a JP. •Check their postcode and agency number (you will have to allocate them one). •Ask ...

Big firms facing FSA regulation fee of £25k

1 May 2003

Big mortgage and general insurance intermediaries could face a one-off bill of up to £25,000 for applying to be regulated by the FSA while smaller firms face a maximum of £1,200. According to CP180, firms with £1m or less in annual income pay £500 if they apply electronically before April 1 for mortgages or June 1, 2004 for insurance. Those paying after these dates face higher charges, as do those using written applications. A draft of CP180 seen by ...

Brokers steer clear of net

1 May 2003

BM Solutions research says just 16 per cent of mortgage brokers process more than a quarter of their business online. Its first quarterly BM Solutions Online index, which aims to track brokers' attitudes to information technology, shows that on average, mortgage brokers currently transact just 13 per cent of their mortgage business electronically. It found that 68 per cent of brokers currently submit, track and progress through to completion at least some of their mortgage cases ...

CA attacks FSA with-profits reform proposals

6 May 2003

Charles Gooding

1 May 2003

The man taking the helm of the new Association of Mortgage Intermediaries thinks he can get the trade body, formerly Namba, back on track. It seems like a big job but TQ Mortgage Service chief executive and former Namba steering committee chairman Charles Gooding knows the importance of keeping things on track. Tracks govern more than just his working life. Gooding loves anything to do with cars and is a big motor racing fan. "I've always been fascinated with racing, particularly ...

Close homes in on property

1 May 2003

Close Property Investment has established the property investment portfolio, an offshore fund of funds that invests in a portfolio of Close property funds. Investors can choose from a growth portfolio with a target yield of 7.5 per cent a year, or an income portfolio with a target yield of 5 per cent a year. The growth portfolio is likely to invest around 35 per cent in the capital appreciation trust, which buys and refurbishes retirement flats. The life tenancy of each ...

Euro aspirations dealt a blow over interest rate vote

1 May 2003

The Treasury select committee has dealt a blow to UK Euro aspirations by warning that Bank of England representatives would be excluded from one-fifth of European interest rate votes under proposals currently being considered. In its report on the UK and Euro published this week, the all-party committee of MPs has said the current plans for European Central Bank interest rate decisions would prove to be "an obstacle to entry". Brokers warn that such a move would have worrying effects ...

First step in the definition debate

1 May 2003

The FSA's much anticipated publication of a definition of misselling has been greeted with something less than overwhelming enthusiasm by the industry trade bodies which have been lobbying so hard for the term to be defined. Arguably the most positive thing anyone has to say about it is that it provides a useful first step to kick off a debate about how any definition should read. That honour falls to the ABI, which offered lukewarm and guarded praise to the FSA's effort ...

FSA tells firm to stop trading after it fails to get PI cover

1 May 2003

A Sussex IFA has been told by the FSA that his failure to get professional indemnity cover means his £250,000 business must stop trading. The FSA has told Marshall Williams & Co it must cease regulated activities, preserve all documents and write to all clients saying the firm has stopped trading. The firm's auditors, solicitors and an independent consultant had valued the 18-year-old business at £250,000 but say it is now worth a fraction of that figure. Marshall ...

Gap narrowing between cost of buying and renting

1 May 2003

Despite the surge in house prices over the last five years, latest figures show that it is still cheaper to buy rather than rent a property but that the gap is narrowing. Research from Abbey National shows that over a period of 25 years, it is on average around £80,250 cheaper to buy rather than rent a home. The gap between the cost of renting and buying has narrowed to just 24 per cent compared with 2002 figures which stood at 30 per cent, which Abbey attributes to house ...

Gerrard points the way

1 May 2003

Gerrard is again sponsoring a point-to-point championship with a prize of £10,000. This is the sixth year that the wealth management firm has sponsored the ladies' open event. The championship consists of a series of qualifying races held all around the UK, culminating in a final on May 22. The first race was on January 4 in Cambridgeshire and the last qualifier will be on May 10 at the Pepperharrow course, Guildford. Chief executive Stephen Clark says: "Point-to-point ...

Hanging on the telephone

1 May 2003

When a client's request for information celebrated its first birthday recently it felt wrong not to call the call centre and invite them round. After all, without them we could have finished this "simple" scheme wind-up in a matter of weeks. I am sure that I am not alone in thinking that call centres are OK for simple matters but for all other issues, they are not suitable. To restrict my comments to call centres would be unfair as it is the automated switchboards that really ...

IFAs critical as Gerrard offloads smaller investors

1 May 2003

Gerrard is advising clients with investments under £30,000 to close their portfolios and move to rival discretionary managers as market volatility has made their holdings hard to manage. The stockbroker is recommending that more than 1,000 users of its unit trust service liquidate their portfolios. It is offering alternative options to the small proportion of clients who entered the service directly but has had to steer independently advised investors back to their IFA for ...

Innovative fee option on ScotLife pensions

1 May 2003

Scottish Life is launching a range of individual personal pension plans that can pay the adviser a fee in a similar way to commission. The new range, called Individual, allows the adviser to fix a fee with their client at outset which is then paid through the product. The option means clients do not pay VAT and get income tax relief on the fee they pay. The new range allows IFAs to select the charging structure they want across stakeholder, personal pensions, executive pensions ...

Investment analysis

1 May 2003

It was a mixed week for international equity markets, which had to contend with the start of a busy reporting season, the impact of Sars and an increasingly uncertain economic environment. By Friday's close, the benchmark FTSE World index had edged down a marginal 0.1 per cent. In the US, markets had a relatively strong start to the week, spurred on by positive earnings news from pharmaceutical groups Pfizer and Eli Lilly and President Bush's support of another term for Alan ...

Investment view

1 May 2003

The simplest questions can extract the most illuminating answers. So it was in Leeds last week at the IFA Events roadshow. In front of a packed audience at the Royal Armouries Museum, the investment question time panel (of which I was a member) received from an IFA one of the best questions I can recall. "What have you learned over the last three years?" What indeed? The answers were telling. Newton's Harry Morgan had grown in confidence as a result of what he had learned. His ...

Julian Gibbs

1 May 2003

Scottish Life International's protected bonus plans have certainly proved their worth. A friend of mine invested £50,000 in the original six-year plan, which matured late last year with a profit of 69 per cent. Its current protected deposit bonus fund, with 100 per cent capital protection, is showing a return of 31 per cent over the last five years and nine months. The indices to which it is linked, the FTSE 100 and S&P 500, are down by 24.7 per cent and 6.7 per cent respectively. .

Kylie's home truths

1 May 2003

Kylie Minogue tops the list of most wanted lodgers, with 41 per cent of men naming her as their ideal housemate, according to a survey of first-time buyers by Yorkshire Building Society. However, the survey reveals that women are more practical, with 21 per cent opting for the cooking skills of Jamie Oliver rather than the good looks of Brad Pitt, who got just 13 per cent of the vote. The survey reveals that the most important purchase for all new homebuyers was a bed at 36 per ...

MEP in last-ditch appeal on execution-only services

1 May 2003

A British MEP is lobbying the European Parliament in a last-ditch attempt to change part of a controversial new directive that would make execution-only services a thing of the past. Conservative finance spokeswoman Theresa Villiers is demanding that the EP changes section 18 of the Investment Services Directive which will basically outlaw execution-only business. The ISD aims to increase investor protection but currently proposes annual suitability tests for customers of firms ...

Monitoring moments

1 May 2003

"Past performance is no guide to the future" is the familiar mantra that has been the subject of much debate over the years. Whatever the theory, the reality is that consumers and industry professionals alike view performance statistics with a high degree of interest. The varied options for the presentation of performance data can make comparison of funds a minefield for the uninitiated. There is a tension between marketers, compliance departments and regulators about how information ...

New roles for ex-Whitechurch pair Cockerill and Perry

1 May 2003

Former Whitechurch Securities employees Tim Cockerill and Warren Perry have respectively joined Principal Investment Management and IFA/fund manager group Lindsay Welbeck. Cockerill becomes a senior discretionary fund manager at PIM responsible for clients in the West, some PR and research. He spent several years with Whitechurch before moving to Chartwell Investment Management in 2000, leaving last year after 20 months. He has since been working with financial services conference ...

Newcastle Building Society - Guaranteed Blue Chip Bond

1 May 2003

Wednesday, 1 May 2003 Type: Guaranteed equity bond and high interest accountGUARANTEED EQUITY BONDAim: Growth linked to the performance of 20 global blue chip stocksMinimum-maximum investment: Lump sum £750-£375,000Term: Five yearsGuarantee: Original capital returned in full regardless of performance in stocksReturn: Up to 50% of average growth at end of termClosing date: June 9, 2003 HIGH INTEREST ACCOUNTMinimum-

Out of context

1 May 2003

•"I have just been told that I sound like Tina Turner." - Cicero Consulting's Iain Anderson on his sore throat. •"That is the pink paper I cut up to make mobiles out of." - Sofa managing director Brian Lawless on his copy of MM. •"Two o'clock. It's the new witching hour." - Bloomberg Money editor Julian Marr considers reining in his socialising. •"I am leaving the industry because I cannot answer these complicated questions." - Trinity Vale Financial ...

Pavis offers IFAs holding service in face of PI crisis

1 May 2003

IFA Pavis Financial Systems is offering a holding service to IFAs who face closure through lack of professional indemnity insurance or who want to retire but feel now is a bad time to sell up. The service allows IFAs who have to stop trading but do not want to sell their business to keep in contact with their clients and earn commission. Under the scheme, IFAs cease to be regulated and license their clients to Pavis which will then pay the IFA 70 per cent of all renewal commissions ...

PPML appoints new marketing head

6 May 2003

Sipp administrator PPML is appointing Gareth Davies as head of marketing, reporting directly to marketing and development director Kevan Ward. Davies joins from PPML parent Credit Suisse where he has held a number of strategic business development and marketing roles in the UK, Switzerland and France.

Pru 'considering debut in equity-release market'

1 May 2003

Prudential is considering entering the equity-release market as soon as June in a bid to take advantage of one of the few rapidly growing business areas, say sources close to the provider. The news comes only two weeks after the Pru increased rates and revoked guaranteed premiums on pipeline and new critical-illness policies, leading many IFAs to vow never to do business with it again. It is thought the Pru's proposition will see it active in both the home reversionary and mortgage-linked ...

Pru strikes compensation deal with big firms over CI

1 May 2003

The Prudential has been forced into an embarrassing compromise over its controversial decision to increase criticalillness rates and drop guarantees by offering compensation of up to £75 per case rebroked elsewhere. The compensation deal, offered exclusively to major players, including Misys, Tenet and Bankhall, has so far not been extended to smaller IFAs. This has left smaller IFAs livid, saying it is shameful that one set of terms exists for big players and another set ...

Scottish Life - Individual Stakeholder Pension Plan

6 May 2003

Tuesday, 6 May 2003 Type: Individual Stakeholder pension planMinimum premium: £20Minimum-maximum ages: From birth-75Fund links: Managed, UK equity, UK ethical, global managed, European, Japan, Far East, global equity, Pacific, worldwide, UK mid cap, American, property, fixed interest, index linked, defensive managed, corporate bond, security 98, security 100, deposit, Scottish Life / BGI consensus, Scottish Life / Schroder hermes UK index tracker, ...

Secret agency?

1 May 2003

Following a plane crash in Tibet, two men and a woman end up with superhuman powers and are now working for the top-secret Nemesis organisation. They're the tops. The best. The peak. They're the Champions. Or are they in fact fledgling consultancy Onevoice? Looking marginally more like the early 1970s superheroes than a still from Popstars: The Rivals, Onevoice will be using their super-powers to gel financial services with glamour and fashion.

Standard clashes with ScotEq on EPP transfers

1 May 2003

Standard Life has criticised Scottish Equitable for mounting a campaign to get IFAs to transfer executive pension plans to personal pensions. Standard argues that the Government's Green Paper reforms will sweep aside differences between EPPs and PPPs. It argues that only those people who are expecting to die or retire before the Green Paper takes effect will see the benefits of transferring and points out that all pensionholders who make the change will suffer a bid/offer spread. But ...

Standard Life property fund makes two more European acquisitions

6 May 2003

Standard Life's European Property Growth Fund (EPGF has made two more acquisitions in Lisbon and Paris. Both buildings will form part of the EPGF, which invests in office, retail and distribution companies in continental Europe.

Sutherland to run low-risk income fund from SLI

1 May 2003

Standard Life Investments is rolling out a low-risk income fund seeking a target yield of 6.5 to 7 per cent through a diverse portfolio of fixedinterest securities. The select income fund, which has been awarded an AA rating from Standard & Poor's, will be managed by Andrew Sutherland, who runs SLI's higher-income and corporate bond funds. He will seek to invest in a portfolio of investment grade and sub-investment grade bonds, with around 80 per cent of the fund invested ...

Talkback

1 May 2003

"A lukewarm yes. If it stops the witch-hunting then it is a good thing. It is a small step forward but it does not go far enough." Mary Louise Bassett, Total Financial Management "No, There seems to be an element of confusion as to what constitutes misselling. The FSA has moved the goal posts so many times I don't think any of us have any real idea about what is misselling." Peter Shorter, Shorter & Co. "No, I'm still confused. I thought there was a definition coming ...

The lone ranger rides high

1 May 2003

A maturing generation of baby boomers means an everincreasing proportion of retirement savings being liquidated and fewer new contributions being invested. Analysis by Oliver Wyman & Company and UBS Warburg suggests that, contrary to popular perceptions, pension reform will do little to reverse this trend in the UK. Asset managers face a difficult task in growing their assets under management. Massive falls in equity portfolios since the bursting of the late-1990s bubble have ...

Traffic jams great as a source of new ideas

1 May 2003

Traffic jams could be good news for IFA businesses, according to a study carried out by Vauxhall. The research found that 71 per cent of workers, including IFAs, have innovative business ideas while stuck in traffic jams. The car manufacturer claims that although traffic jams provide good opportunities to think, financial staff prefer the open road, with 57 per cent claiming they felt that driving along country lanes was a prime time for coming up with new ideas. One in 10 said ...

Who pays for admin delays?

1 May 2003

Last week, MM published a story on a ruling in favour of Scottish Widows that meant an IFA firm could not claim money for admin expenses from a provider it had not recommended when trying to apply the open market option. Here, we publish a letter outlining the IFA's concerns. My firm is increasingly concerned with the lack of care and attention shown by pension providers when asked to pass pension funds to annuity providers. Most annuity quotations are only valid for 14 ...

Worries over FSA stance on misselling claims

1 May 2003

For once, I find myself moderately inclined to agree with the stance taken by the FSA, in this instance, on its reluctance to provide an exhaustive set of specifications as to exactly what might constitute misselling. If you think about it, this is a virtually impossible thing to achieve. The best one might reasonably expect is a clearly defined set of subject areas which need to be included in all letters of recommendation which, I believe, we already have. At least as members ...

Zurich rolls out structured product

1 May 2003

Zurich is rolling out a structured product which guarantees 100 per cent capital return regardless of the movement of the FTSE 100, to which it is linked.