Money Marketing
31 July 2002

'Standard is playing with-profits roulette'

1 Aug 2002

Influential analyst Ned Cazalet has made a blistering attack on Standard Life's with-profits strategy, calling it the man that will not leave the roulette wheel and is praying for a win to get him out of trouble. Speaking at a round table meeting organised by F&C in London last week, Cazalet said the Scottish mutual has seen reserves plummet from about £10bn to just over £1bn. He said the company's dogged adherence to a high equity backing ratio for its with-profits ...

1 in 4 companies offer PMI with benefits says Bland Bankart

5 Aug 2002

Almost one in four UK companies now offer private medical insurance as part of their employee benefit strategy according to risk management group Bland Bankart.

A consumer's view

1 Aug 2002

The FSA is facing the biggest test of its abilities and nerve since it came into being. If it fails this challenge, it could result in a total collapse in consumer confidence which will have disastrous consequences for the retail investment industry for many years to come. Falling share prices have left many of the life companies in a dangerous position as they face diminishing solvency margins. Meanwhile, several of the split-capital investment trusts have already gone bust, leaving ...

American Express launches seven new funds

2 Aug 2002

American Express Bank is launching seven new global sector investment funds in the UK as part of its European expansion plans.The new additions - including the Global Emerging Markets, Global Healthcare Equities and California Equities funds - have been designed to offer investors access to global sector funds that are not limited to specific countries or regions.They bring AEB's total number of funds to 26.

Balancing act

1 Aug 2002

Mr and Mrs Davis are aged 66 and 67 and have been retired for about five years. They asked for an overview of their investments and retirement planning portfolio. How did I think they should proceed? I explained to my clients that I felt the balance of their portfolio was not correct and that we needed to meet further to discuss other options. They had various investments two years ago which were set up to provide income through withdrawals and dividend payouts. They also ...

Blood on the walls in the emergency room

1 Aug 2002

Norwich Union’ emergency cuts in with-profits payouts last week has sparked speculation that the rest of the life industry is going to follow suit and take drastic action to preserve financial strength.Analyst Ned Cazalet says the only surprise is that the cuts were not more stringent. He says: “It is just the beginning. There is going to be blood on the walls. Capital is going down the tube.”He says most companies will be forced to follow. Unsurprisingly, NU agrees. All ...

Bristol & West - Global Balanced Guaranteed Equity Bond 7 Year Issue 1

6 Aug 2002

Tuesday, August 6, 2002 Type: Guaranteed equity bond Aim: Growth linked to the FTSE 100, Nikkei 225, SMI and S&P 500 indices Minimum-maximum investment: £2,500-£1m Term: Until October 13, 2009 Guarantee: Capital returned in full at end of term regardless of movement in indices Return: Up to 90% of growth in indices Interest rate: 4% gross a year Closing date: September 30, 2002 Commission: ...

Bristol & West - Global Income & Growth Guaranteed Equity Bond 7 Year Growth Issue 1

6 Aug 2002

Tuesday, August 6, 2002 Type: Guaranteed equity bond and high interest account GUARANTEED EQUITY BOND Aim: Income and growth linked to the FTSE 100, Nikkei 225, SMI and S&P 500 indices Minimum-maximum investment: £2,500-£1m Term: Until October 13, 2009 Guarantee: Capital returned in full at end of term regardless of movement in indices Return: Up to 90% of growth in indices Interest rate: 4% gross ...

CA says using WP funds to pay for misselling is tantamount to 'theft'

1 Aug 2002

The Consumers' Association is warning the FSA it could be allowing corporate theft if it permits life offices to use with-profits funds to pick up the bill for mortgage endowment misselling. The CA says the majority of the six million with-profits policyholders are already suffering from mortgage endowment shortfalls and argues shareholders of proprietary offices should be the ones who meet the cost of any compensation. Itsays there should be no repeat of the payment from with-profits ...

Cazenove and AIG provide multi-manager bond

2 Aug 2002

CAZENOVE INVESTMENT FUND MANAGEMENTCAZENOVE UNIVERSAL INVESTMENT BONDAim: Growth and income by investing in four multi-manager fund of fundsMinimum investment: Lump sum £50,000Investment split: 100% in Cazenove universal UK growth portfolio, Cazenove universal balanced portfolio, Cazenove universal growth, portfolio or Cazenove universal international portfolio (ex-UK funds).Income facility: YesCharges: Initial 4.5%, annual 1.95%Commission: ...

Cheque out Eldorado

1 Aug 2002

The lucky winner of the Scottish Equitable Employee Benefits Eldorado contest, PIFC senior healthcare consultant was James Clarke, pictured above in King William Street, City of London, receiving his £1,000 prize from SEEB marketing manager Alison Ritchie. Note the wipe-clean cheque.

Civil Service appoints DC providers

5 Aug 2002

The Civil Service pension scheme has appointed four providers to the panel of money purchase schemes available to new and existing members.

Correspondent week

1 Aug 2002

I am glad to say that the markets have not lost their capacity to surprise. My few months' gardening leave between my exit from Christows and my arrival at iimia have seen some of the most torrid times the FTSE has seen for decades. It has been frustrating seeing it from the sidelines. No matter how excellent our financial media are, there is no substitute for sitting down with fund managers on a one-to-one basis and getting a real feel for what they think the markets will do. My ...

Delay over mortgage regulation

31 Jul 2002

The Council of Mortgage Lenders has warned members that statutory FSA regulation of mortgages is likely to be introduced by September 2004 at the earliest, rather than the second quarter of 2004 as originally planned. The CML says this is because of delays in implementing the EU insurance intermediary directive forcing the Treasury and FSA to push back its target dates. The Directive is now more likely to be adopted in September this year not July. 

Double Dutch

1 Aug 2002

Ever since Arsenal entered the Champions League - an expected annual event - I have looked with more interest at anything with a European angle. Of course, as I am sure that many United supporters will be swift to tell me, there is a great deal of difference between entry into the Champions League and actually winning it. Of course, they have a point - a point that was very well made on that epic night at Old Trafford at the end of last season when we gooners in the away section were ...

F&C rejects Sandler claim over life funds' tax bias

1 Aug 2002

Sandler's claim to be levelling the tax playing field bet-ween life offices and fund management companies has been dismissed by F&C, which claims the arena is already tilted in fund managers' favour. Speaking at the F&C round table meeting in London last week, group head of insurance products Derek McLean said fund managers already benefit from certain capital gains tax advantages and Isa allowances which put them in a more favourable position. Sandler's report ...

Finance 4 Women hit the road

5 Aug 2002

Finance 4 Women, the all female Millfield Associate Partnertship firm, has announced a new campaign aimed at school leavers in the South East.

Flight leaves IFA post for Shadow Cabinet

1 Aug 2002

IFA champion MP and Investec co-chairman Howard Flight has been promoted to the Shadow Cabinet but will no longer represent IFAs'interests in Parliament. Flight's promotion to Shadow Treasury Chief Secretary from Shadow paymaster general follows Conservative Party leader Iain Duncan Smith's recent frontbench reshuffle. Flight has repeatedly raised the plight of IFAs in Parliament, taking the lead on financial services issues for the Tories since 1997, most recently criticising ...

FSA guidance on accounting for windfalls when paying compensation

31 Jul 2002

Future discounts loan range

6 Aug 2002

Sub-prime lender Future Mortgages is discounting all its loans by 1.25 per cent until the end of December.The discount, which applies to all Future's self-certification, buy-to-let and right-to-buy mortgages, will allow borrowers to secure rates from 5.45 per cent up to 90 per cent loan to value.Minimum mortgage size is £25,001.

German IFA probed on accounting

1 Aug 2002

German IFA giant MLP's headquarters in Heidelberg were raided last week after an anonymous tip-off prompted the public prosecutor's office to seize documents relating to its reinsurance business. In response, the firm, which aims to become a national IFA in the UK, published details of an audit conducted by Ernst & Young giving it a clean bill of health. The audit was commissioned by the firm to restore investor confidence following German press speculation about its ...

Govt should heed the lessons from stakeholder

1 Aug 2002

Like many other IFAs, I had been thinking of writing a letter along the lines as that of Peter Richardson, in which he derides the Government's idea that people will save more if the marketplace is flooded with Government-approved cheap and cheerless products. But I decided not to bother, for the simple reason that these products will be no more successful than stakeholder and need not concern me. I shall not sell them and nor will I recommend clients to seek out an organisation ...

Guide aims to help IFAs with bereaved clients

1 Aug 2002

IFA Promotion has produced a free guide on dealing with the practical issues arising from the death of a family member or friend. The publication entitled, A practical guide to dealing with bereavement, is intended to help IFAs give useful advice to clients in a sensitive situation. Specific areas covered in the guide include making funeral arrangements, the importance and benefits of making wills, including deeds of variation, the role of executors and administrators, how to value ...

Homeowners launches equity Isa

6 Aug 2002

Homeowners Investment Fund Managers is this week launching its equity ISA, allowing investors to save up to £7,000 per year tax-free.

IMA rejects Sandler view on fund charges

1 Aug 2002

The IMA has rejected the Sandler review team's conclusion that there is no correlation between fund charges and performance, saying the evidence presented to Sandler points to an opposite conclusion. Having had access to the same data upon which the review team based its conclusions, the IMA says there is a distinct relationship between the cost of a fund and its subsequent performance. On average, it concludes, that for every 1 per cent increase in fund cost there is a 2.5 ...

Industry waits for picture to clear

1 Aug 2002

There remains a great deal of confusion and disagreement over Ron Sandler's proposals for how IFAs are paid. Sandler believes the plans represent a liberalisation, as does Aifa. The LIA does not while Sofa is welcoming the payment proposals subject to VAT being sorted out. Sandler suggests that payment can go to the IFA from the provider as long as the amount and method is pre-agreed with the client. We think this means that some form of commission continues but not one ...

Interest rate on hold at 4 per cent

1 Aug 2002

The Bank of England's Monetary Policy Committee has decided to leave interest rates on hold for the ninth consecutive month in a row. The rate stays at 4 per cent as it has remained since last December. The MPC made its decision despite the rising house prices, mainly because it is concerned with slowing down consumer spending.

Investec loses top fund manager

1 Aug 2002

Investec Cautious Managed Fund manager Chris Burvill has quit the company after more than 10 years to join Gartmore.He will be replaced by the £40m fund's deputy manager Alistair Mundy, who will also take over the helm of the UK Value Fund. He has been with Investec since July 200 after spending 12 years at Commercial Union.Burvill is thought to have been recruited by Gartmore to turn around its ailing equity income performance. 

Investment view

1 Aug 2002

There is a limit to the number of times that I feel capable of incorporating the words "doom" and "despondency" in an article. One of my colleagues wrote last week of the sense of despair evading the market. There is a very alliterative state of affairs around at present, while we are seeing an overuse of some phrases that are meant to capture the moment. If someone else writes about the danger of trying to catch a falling knife, I will know just where to plant one. It feels like time ...

John Wriglesworth

1 Aug 2002

In his usual opinionated manner and drawing on almost 20 years experience of the property market, PR guru John Wriglesworth is adamant that there is no chance of a housing market crash. In the face of conflicting newspaper headlines and economists such as Roger Bootle, who was an adviser to the last Tory Government, saying "there is a significant chance of a housing market crash", Wriglesworth says: "There will be no crash - that is nonsense." You would expect strong opinions from ...

Jupiter management set for buyout

31 Jul 2002

IFAs are welcoming the prospect that Jupiter's senior management team may be considering a management buy-out rather than rely on parent Commerzbank to find a suitable buyer.

Leeds & Holbeck tracker cap offering 4.59% rate

1 Aug 2002

Leeds & Holbeck Building Society is offering a capped tracker mortgage guaranteeing that borrowers will not pay more than 4.99 per cent until October 2004. It claims that borrowers will benefit if the Bank of England cuts interest rates but they also have the security of what it claims is the the best two-year capped rate on the market. The mortgage's current interest rate is 4.59 per cent - Bank of England base rate plus 0.59 per cent - and is available up to a loan to ...

Lighthouse makes board appointment

1 Aug 2002

National IFA Lighthouse has appointed Valerie Gaze to its board as regulatory director effective immediately.Gaze was one of the founders of Berkeley Wodehouse, which was acquired by Lighthouse in April.Lighthouse chairman David Hickey says: "Valerie has nearly a decade of experience in dealing with the legal and regulatory matters of IFAs and the board believes that Lighthouse will benefit from her skills and experience."

Livingston FC flies IF colours

1 Aug 2002

Scottish Premier league football club Livingston FC has unveiled its new Intelligent Finance branded strips, part of the phone and internet bank's two-year, six-figure sponsorship of the local club. This is the first time IF's name has appeared on the strips and as the club's main sponsors the east stand of the Almondvale Stadium is being renamed the Intelligent Finance Community Stand. Livingston is launching two branded strips this year, one in its own colours of orange ...

Misys is probing hoax email over DBS

1 Aug 2002

Misys has launched an investigation after trade newspapers received a hoax email last week from someone purporting to represent DBS and claiming the network faces closure to new business after failing to secure PI cover. The email, received by Money Marketing on Thursday, says: "It is with deep regret that DBS announce the failure to secure terms with professional indemnity insurers for the year beginning August 1, 2002. After consultation with the FSA, we must close for new business ...

New fixed rates from Sun Bank

5 Aug 2002

Sun Bank has launched a new range of fixed rate standard, buy-to-let and self-certification mortgages.Five year fix rates start at 5.99 per cent on standard products with a loan to value of up to 95 per cent, and 6.24 per cent on buy-to-let with a LTV of up to 80 per cent and 6.24 per cent on self-cert with a LTV of up to 85 per cent. 

New pension quotation service from The Exchange

5 Aug 2002

The Exchange is launching a new comparative quotation service that enables IFAs to compare pension products and providers on retirement benefits, fund values, charges, transfer values and product features.

nvesta bond doubles as Isa

5 Aug 2002

nvesta, the new brand name for Eurolife Fund Managers, has introduced a five-year guaranteed equity bond that is also available as an Isa.

Outside Edge: Anne McMeehan

1 Aug 2002

A man on the radio a few mornings ago made the point that people by and large are far more interested in implications than they are in probabilities. He was a scientist, commenting, as sensibly as one can in the circumstances, on the story that a meteor is going to hit the Earth on February 1, 2019. Perhaps it was this understanding of its readers' preferences that led one "popular" newspaper to conclude that it now makes more sense to splash out on a holiday than save for a pension. Unfortu

Preferred Mortgages expands

6 Aug 2002

Specialist lender Preferred Mortgages has made four new appointments as part of an growth policy that has also seen it expand its head office.Peter Else joins as servicing manager from Bank of Ireland mortgages where he was head of mortgage administration. Sharon Ault becomes head of human resources after 27 years with Lloyds TSB. Cate Curran is appointed product development manager and Mick Bradley becomes regional sales manager.

Property price rises starting to slow down

1 Aug 2002

House prices are rising more gradually as the market starts to cool down, according to property website Rightmove.co.uk. Its says the average asking price rose to £155,000 at the end of May before falling to around £149,000 at the start of June, due partly to the World Cup and Golden Jubilee. During July, average asking prices rose to between £152,000 and £155,000. By tracking asking prices for new instructions coming on to the market through its member ...

Retired taking lion's share of pensions on company insolvencies

2 Aug 2002

Members who have not reached their normal retirement are losing out to those already retired in cases where their employer has become insolvent, according to Independent Trustee Services director Terry Monk.

Skandia turns the key

1 Aug 2002

Skandia is running a campaign to help IFAs get the most from the corporate protection market. To mark the campaign, it has published a free IFA guide and new business insurance and premium equalisation calculator. The guide includes information about key employee cover, loan cover and partnership and shareholder protection, as well as details about taxation and Skandia products. Skandia's calculator allows IFAs to equalise premiums on partnership and shareholder policies in ...

Standard Life Investments moves to cash

5 Aug 2002

Standard Life Investments is increasing its exposure to cash while waiting for better prospects in the equity markets later in the year. It believes the dollar has entered a period of weakness and that investors are generally looking for more diversification.

Temple axes 21 managers in restructure

1 Aug 2002

National IFA RJ Temple is axing 21 managers. Ten staff have already stepped down in moves towards transferring all managers on to full-time salaried contracts. The firm previously employed 45 advisers as team managers on a part-time basis. It aims to have a new structure in place by the end of October. Temple expects to cut the number of managers to 24 through natural wastage as more managers choose to stay in their IFA role. Some managers may not be offered management positions. Marketing

The key to protection

1 Aug 2002

Recent research commissioned by Legal & General into attitudes towards business protection among small and medium-sized enterprises shows that 42 per cent of companies which do not have cover do not even know what it is. On the one hand, we could take this as an indication of poor communication by our industry of the advantages of business protection products. On the other hand, this simply highlights the extensive opportunities that exist to raise the subject with decisionmakers ...

Token fee

1 Aug 2002

So as to build value in the business before flotation, I am awaiting the following press release from Misys. "Misys is pleased to announce that, in view of the latest educational research, free and plentiful locally bottled still and fizzy filtered tap water will be available at all the compulsory quarterly roadshows. "The directorate is aware that this may place additional pressure on the toilet facilities. "To ease possible congestion, £2 tokens will be required for ...

Trustees in the balance

1 Aug 2002

Over the last few years, the responsibilities of trustees have become more clearly defined. In simplistic terms, a trustee must manage and administer trust assets as if they were his own. This suggests a balanced approach which, even in the current climate, must include a good dose of equities. Nobody seems to have questioned the capacity of pension trustees to choose to hold anything up to 100 per cent of their portfolios in bonds. Does this mean that if the strategy fails or, indeed, ...

UK consumers could save £900 on life cover says Charcol

6 Aug 2002

UK consumers could be wasting as much as £106m a year by not shopping around for the best rate on their life cover according to Charcol.

Warburg warns life trio are FAR from strong

1 Aug 2002

Investment banker UBS Warburg is casting doubt on the capital strength of Scottish Mutual, Clerical Medical and Scottish Widows and questions their ability to continue "business as usual". The analyst's report comes as Scottish Mutual says it is moving away from with-profits, which Warburg says could see its new business through IFAs dry up. The report on the life subsidiaries of Abbey National, HBOS and Lloyds TSB claims even if the FTSE reaches 5,000, only HBOS would have ...

Wesleyan shows its strength

1 Aug 2002

Wesleyan Assurance is publishing a free guide to financial strength aimed at investors considering with-profits policies. The guide explains the importance of financial strength when choosing a provider. It also highlights a study by the University of Nottingham which found that the average free-asset ratio of the 20 biggest with-profits companies fell to 7.1 per cent at the end of 2001, from 11.7 per cent in 2000 and 19.1 per cent in 1999. It explains how product providers ...

Zurich bond provides a la carte menu

6 Aug 2002

Zurich International Life has established the wealth account, a single premium offshore bond that provides access to 130 funds from a range of fund management groups.