Money Marketing
7 August 2002

£5 cap on broker fees removed

8 Aug 2002

The Treasury is removing the Consumer Credit Act's £5 cap on fees for advice given by intermediaries which does not lead to the client taking out a mortgage.It says this is because there will be occasions when the appropriate advice is not to take out a mortgage, but it says the FSA will be able to introduce rules to ensure consumers are protected.

A defining time for pensions

8 Aug 2002

2002 seems to be the year of the review. On the pension front, the Pickering report was published just after Sandler in early July while the Inland Revenue's recommendations on tax simplification are still to come. IFAs' employer-sponsored pension dealings are mainly of the defined-contribution kind, mostly in the shape of GPPs, stakeholder and AVCs with a smattering of DC occupational schemes. The Pickering proposals largely ignore such specialist areas as small self-administered ...

ABI and BBA end merger talks

7 Aug 2002

The ABI and British Bankers' Association pulled out of merger talks, saying the membership of the two trade bodies informed the board and council they did not wish to see the two unite. The decision not to go forward ends months of speculation about the future of the two trade bodies. A statement from the two says given the number and importance of issues affecting their members, it was thought too much time would be wasted by pursuing a merger at this time.  

Aifa and LIA row grows in commission bias claim

8 Aug 2002

The LIA has accused Aifa of holding its hands up and admitting to the existence of commission bias in its cost-benefit analysis produced for its menu-based system for remunerating IFAs. In a clear escalation of the row between the adviser bodies, the LIA says Aifa is advocating the removal of commission as part of its alternative remuneration proposals. Aifa rejects the LIA's claim, saying that it has never called for the removal of commission or admitted to commission bias ...

Annuity for two

8 Aug 2002

I am 74 and, having accrued a personal pension fund of around £500,000, am now faced with the dilemma of what to do about the annuity purchase obligation that will be forced on me next year. I am in very poor health but as my wife (who is in reasonable health for her 73 years) and I live off an income from our property portfolio, my death will have no effect on her standard of living. We have made provisions to mitigate inheritance tax but my pension fund passing to our daughters ...

Appointed rep regime to be extended to mortgage regulation

7 Aug 2002

The Government still intends to expand the appointed representative regime to the mortgage market according to the Treasury's response to its consultation published today. It says no respondents had a fundamental objective to this proposal but some were concerned with the detailed rules around the regime. It says these matters are for the FSA to consult on. It will respond to concerns that under the Financial Services & Markets Act, an adviser cannot be both an authorised ...

Asset allocation is key to efficient drawdown, Lymburn tells investors

8 Aug 2002

Income drawdown inv-estors should not cash in their investments simply because they do not know what else they can do to safeguard their portfolios, says The Drawdown Bureau. The Drawdown Bureau says asset allocation is the key to utilising the efficiencies of income drawdown, even when equity markets are producing losses. Clients invested in drawdown through a Sipp should remember they can change their investment portfolio but should be wary of cashing investments that have lost ...

B&B renews Mortgage Brain contract

12 Aug 2002

Bradford & Bingley has renewed its contract with Mortgage Brain for its mortgage outsourcing platform in a deal that will see B&B's 1,000 advisers using the external quote engine.

Bloomsbury fixes the price for advice service

8 Aug 2002

Fee-based IFA Bloomsbury Financial Planning is unveiling a fixed-price financial planning service for clients who want ongoing access to advice. Two levels of the service are offered - elite, aimed at clients with more complex finances, and premier for simpler needs. Elite gives unlimited access to a certified financial planner, unlimited technical work and the updating of the client's financial plan throughout the year for a fixed monthly fee of £250 plus VAT. Any commission ...

Bristol & West - Global BGEB TOISA 5 Year Issue 1

7 Aug 2002

Wednesday, August 7, 2002 Type: Tessa only Isa Aim: Growth linked to the FTSE 100, Nikkei 225, SMI and S&P 500 indices Minimum investment: Lump sum £1,000 Maximum investment: £9,000 Catmarked: No Interest rate: 4% gross a year Charges: Implicit Withdrawal penalty: No withdrawals permitted during term Commission: Initial 3.5% Tel: 0845 1110118

Bristol & West - Global GEB Mini Cash Isa 5 Year Issue 1

7 Aug 2002

Wednesday, 7 August 2002Type: Capital protected IsaAim: Growth linked to the performance of the FTSE 100, Nikkei 225, SMI and S&P 500Minimum-maximum investment: £3,000Investment choice: Deposit accountTerm: Five yearsGuarantee: Capital returned in full at end of term regardless of movement in indicesReturn: 70% of average growth in indicesCatmarked: NoClosing date: September 30, 2002 Charges: ImplicitCommissi

Britannic's sub-prime CAM labelled a 'PR product'

8 Aug 2002

Rival lenders and brokers are accusing Britannic Money of putting vulnerable borrowers at risk by setting up the first sub-prime current account mortgage in the UK market. Specialist lender Future Mortgages says it is concerned about the practical implications of giving flexible features such as payment holidays and underpayments to people who have problems managing their money. National broker franchise Mortgageforce says although being able to offset savings against debt could ...

Civil Service picks pension panel

8 Aug 2002

The Civil Service pension scheme has appointed four providers to the panel of money-purchase schemes available to new and existing members. Scottish Widows, Standard Life, AMP and the Prudential-administered TUC stakeholder will offer the partnership pension account. Under the PPA, providers offer a stakeholder that attracts age-related employer contributions with the option of voluntary employee contributions, which are matched up to 3 per cent by the employer.

Correspondent's week

8 Aug 2002

Week three in my new job. The holy grail of financial journalism. As the newest reporter on Money Marketing, I am the brightest-eyed, bushiest-tailed individual on the newsdesk. Yet, already, the shiny veneer of my new job is beginning to crack. It all started on my second day...... "Beccy, today you will be going to your first press conference," said my esteemed editor. Excellent, I had planned this moment weeks in advance. I would sashay into the room, cool, calm and confident, and ...

Don't concede the argument on commission

8 Aug 2002

I keep hearing people in the industry saying that "we accept major change has to take place…" Why? I am the first to believe that if we can get to an improvement on current arrangements, then we should do that. But why do we have to have change for its own sake? We currently have a situation where IFAs can charge fees if they and their clients want that solution to paying for the IFA service. It appears that only about 10 per cent of business with IFAs is done in this way. The ...

Ex-Widows chief will oversee Misys float

8 Aug 2002

Misys has appointed former Scottish Widows board director Newton Scott as the first non-executive director to its life and pension board overseeing the company's flotation. Scott, 55, joined Scottish Widows in 1964 as a clerk in the Newcastle branch. He held positions in sales and marketing before being appointed managing director (marketing and distribution) in 2000 with responsibility for IFA and direct-sales marketing and distribution. Misys head of group media relations ...

Fixed rate bond from Northern Rock

12 Aug 2002

Northern Rock is issuing a new fixed rate bond and equity tracker product, called Fifty:Fifty Issue 11.

Former Chancery IFA wins case against firm

13 Aug 2002

A former adviser with IFA Chancery Asset Management has awarded a judgement against the firm over unpaid remuneration he claims it owes him.

Friends cuts payouts in wake of £242m losses

8 Aug 2002

Friends Provident has cut with-profits payouts by 6 per cent after writing down £402m in investment losses. It made an operating profit of £161m in the first half of this year but the investment writedown brought an overall loss of £242m compared with a profit of £19m in 2001. The company says it needs to reduce payouts to more sustainable levels. The 6 per cent cut will only affect maturing policies but regular bonuses will be reduced by 0.5 per cent. The ...

FSA proposes three tiers of mortgage broker

13 Aug 2002

The FSA has proposed three tiers of mortgage broker once regulation of the industry comes into being in 2004.

FSA to review overlap between CP121 and mortgage regulation

7 Aug 2002

In its response to mortgage regulation consultation the Treasury has said the FSA will consider the links between the CP121 polarisation review and mortgage regulation.

Gartmore seeks opportunities in Europe

8 Aug 2002

Gartmore has added two European bond funds to its Sicav, bringing the number of funds in the range to eight. One of the funds, the Gartmore Sicav European corporate bond fund, focuses purely on investment-grade European corporate bonds. It will be benchmarked against the Merrill Lynch EMU corporate bond index. The fund will be managed by Richard Hodges, who has been a senior investment manager with Gartmore's fixed-income team for 13 years. He has been running the Gartmore capital ...

Global GEB Mini Cash Isa 7 Year Issue 1

7 Aug 2002

Wednesday, 7 August 2002Type: Guaranteed mini cash IsaAim: Growth linked to the performance of the FTSE 100, Nikkei 225, SMI and S&P 500Minimum-maximum investment: £3,000Investment choice: Deposit accountTerm: Seven yearsGuarantee: Capital returned in full at end of term regardless of movement in indicesReturn: 90% of average growth in indicesCatmarked: NoClosing date: September 30, 2002 Charges: ImplicitCommissi

Here comes the backlash

8 Aug 2002

Last week my chairman told me I would have to work until I am 90. He was making this rather alarming judgement on the back of the Sandler and Pickering reports - the reports that were supposed to allay our fears over the ever deepening "pension crisis". Rather than providing solutions, it seems the reports have only confirmed our worst fears. I suspect if pensions were a sexier subject capable of capturing our imagination, the younger generation would be trembling in their boots. So, ...

High street lenders offer poor MPPI cover says Goodfellow

13 Aug 2002

The average cost of mortgage payment protection insurance from the UK's top ten lenders is £5.80 per £100 according to a survey from protection broker Goodfellows.

House prices continue to soar

8 Aug 2002

House prices continued to rise last month with the average UK property price increasing by 2.5 per cent to £108,818 from £106,693, according to the latest figures from Nationwide. This means annual house price inflation has now reached 21 per cent, the highest since the second quarter of 1989. The building society says that while the prices of equities and goods on the high street both fell, the housing market remains strong and the average price is well up on last ...

IFA's anger over NU letter to client

8 Aug 2002

Scunthorpe IFA Bob Riach has attacked Norwich Union for encouraging his clients to shop around for a new adviser after he had introduced business to the life office. The Riach Consulting proprietor is outraged over a letter NU sent to his client confirming the cancellation of a term insurance policy, which was later reinstated. The letter included the line: "If you do not have an IFA, please call IFA Promotion." Riach, who was copied in on the letter, says NU sent it after his ...

IFAs may escape full impact of wider laundering rules

8 Aug 2002

IFAs may escape the full force of the extension of FSA money-laundering regulations aimed at covering pre-1994 financial services clients. The regulator plans to extend the regulations and compel the financial services industry to ensure that they have adequate identification on file for clients on their books before 1994. But the FSA says IFAs may not bear the full brunt of the extension as decisions will be made about establishing thresholds for certain groups. Most IFAs ...

IFAs too risky for credit merchant facilities, say banks

8 Aug 2002

IFAs have attacked three high-street banks for their reluctance to offer credit card merchant facilities to advisers, who they claim are a high risk. Needanadviser.com director Ashley Clark's application for a merchant account was refused by Barclays, HSBC and Natwest/Royal Bank of Scotland although it is now being considered positively by Lloyds TSB. Clark says credit card facilities are important for fee-based IFAs as they allow clients to spread the cost of their services ...

Industry must make its voice heard

8 Aug 2002

Money Marketing warmly welcomes the fact that some companies and trade bodies have stopped giving a warm welcome to Government-inspired reviews. We recklessly welcome the decision by several companies and trade bodies - to name but a few, Scottish Widows, Norwich Union, Scottish Life, Fidelity, Jupiter and the IMA - to stop giving cautious welcomes to policies which present a danger to their future success and to savers and investors. No one is suggesting pursuing the Chancellor ...

Investment analysis

8 Aug 2002

It was another volatile week for global markets, which absorbed weaker than expected economic data from the US to end the final week of a poor July higher. The benchmark FTSE World index finished the five days 1.3 per cent higher. Following on from the previous week's second-biggest one-day gain in history, Monday saw the Dow enjoy a 447-point gain, its third-biggest rise, as bargain-hunters sent financials and tech issues higher. However, the bullish mood was unsustainable, ...

Investors seeking the safer option of income funds

8 Aug 2002

Cofunds is reporting a major shift towards sales of income funds over growth funds in the first half of this year compared with the same period in 2001. This year, six equity-income and fixed-income funds made it into the top 10 best-selling funds compared with only two in the first half of 2001. The two most popular funds were the Credit Suisse and Liontrust First income funds. There were no technology and global growth funds in the top 20 and the number of European funds halved ...

Julian Gibbs

8 Aug 2002

One of the best investments I have ever made is the Holiday Property Bond. This is not an investment for making money but is one which has given me enormous pleasure over the past 17 years. If I invested today, I would have to put in twice as much as I did originally, so my holidays have effectively been inflation-proofed. There are 1,100 properties at over 70 locations from which to choose. Most are now owned by the bond but some are rented, mainly in the summer months, at ...

Legal & General doubles Isa market share

13 Aug 2002

Legal & General says its share of the Isa market more than doubled in the year to June 2002.The life and pensions provider says its market share rocketed to 11.9 per cent in the second quarter of this year from 4.8 per cent over the same period last year.Retail investments director Simon Pistell says: "Although market conditions have been tough investors have continued to recognise the benefits of L&G's value for money propositions."

Lincoln to probe more CFP sales

8 Aug 2002

Lincoln Financial Group is reviewing the cases of 26,000 investors who were sold products by its former tied sales- force City Financial Partnerships to estimate the extent of any misselling. An initial review in 2001 of 5,000 customers advised by CFP Ltd between 1993 and 1994 revealed that one in 10 were missold products. Lin-coln has now sent out letters to all 26,000 customers to gauge whether they were also misselling victims. Around 1,000 customers have responded to the letters ...

Medicash - Essential Surgery Plan

13 Aug 2002

Tuesday 13 August, 2002Type: Healthcare Cash PlanMinimum premium: £8 a month, £96 a yearMinimum-maximum ages: 3-65Maximum benefits: £6,000Deferred period: Up to age 44 two years, 45-60 three years, 61 and above four years. Applies to pre-existing conditions onlyCommission: Initial 15%, renewal 5%Tel: 0845 9645252

Model partnership

8 Aug 2002

In two previous articles I have highlighted some of the reasons why so-called wealth management models have struggled to deliver a result and also offered my thoughts as to some of the necessary ingredients for a successful model. I now wish to explore how we may best be able to get the right leverage in place to drive a viable new model. For those organisations already owning a national brand - or those aspiring to own one - delivering increased productivity has always been the ultimate ...

Mortgage packagers want their role clarified in the run-up to regulation

8 Aug 2002

Mortgage packagers are calling on the Treasury and FSA to clarify their future role as the countdown to full mortgage regulation gathers pace. Packagers speaking at packager regulation forums held by Southern Pacific Mortgage have voiced concerns over how far they can be regarded as giving information or advice. They say they need urgent clarification of these terms so they can plan for the statutory regulatory regime which is due to come into being in 2004. As the term "packager" ...

MPs too late to sway Revenue's pension plans FSA adds drawdown to Omo requirement

8 Aug 2002

The Department for Work and Pensions select committee inquiry into the future of pensions is likely be published too late to influence the Inland Revenue's review of pension taxation. The committee is considering a wide range of issues, including the role of tax incentives in pensions and will look to build political agreement for the need for radical change. The inquiry, set up two weeks after publication of the Sandler and Pickering reports and headed by Liberal Democrat MP ...

N&P in exclusive tracker deal for Trigold platform

8 Aug 2002

Norwich & Peterborough is making a base-rate tracker mortgage available exclusively on the Trigold electronic trading platform for intermediaries. The building society says the savings it makes by receiving applications via the platform mean it is worthwhile to choose this as the sole distribution route for the tracker. The mortgage rate is 0.25 per cent below the Bank of England base rate for two years and 0.75 per cent below base rate over the remaining term. The loan ...

New customer service director for Scottish Life

7 Aug 2002

Scottish Life is appointing Isobel Kennedy as customer service director as John Wallace retires from the post after 35 years service.Kennedy moves from her post as head of customer services at Royal London's Wilmslow operations centre.Scottish Life chief executive Brian Duffin says: "I am delighted to welcome Isobel to our senior team. She will bring the benefits of a varied background and a fresh perspective."  

Northern Rock Guernsey goes halves

9 Aug 2002

Northern Rock Guernsey goes halves

9 Aug 2002

Northern Rock Guernsey has established the 10th issue of its offshore fifty fifty product, a combination of a guaranteed equity bond and a high interest account.

One Europe, one pension

8 Aug 2002

Last month, the European Financial Services Roundtable produced a report entitled, One Europe, One Pension - Affording the Future. The report is only 30 pages long and can be found at the EFR's website www.efsrt.org. The EFR is a group of chairmen and chief executives from many of Europe's biggest insurance companies and banks. It includes, for example, the chiefs of Aviva (formerly CGNU), Royal Bank of Scotland, Axa and Allianz as well as my own parent company Aegon. I was ...

Pension schemes 'will not opt out of benefits'

8 Aug 2002

Three-quarters of UK pension schemes believe proposals in the Pickering report on pension simplification do not go far enough to addressing the industry's problems. But while just over half of schemes say they would consider adopting Pickering's proposal to make membership compulsory if demanded by an employer, the majority say they would not drop inflation indexation or spouses' benefits, according to a survey. The NAPF, which questioned 10 per cent of its 1,000 members, ...

People won't buy without persuasion

8 Aug 2002

So, the waiting is over. The biggest problem facing the UK in the new century and after waiting for a year with bated breath, the two masterminds have come up with their solutions on how we are all going to save significantly more. There must be rejoicing in the streets - hurrah, hurrah, we are to get decent pensions at last, cry the people. But what? The emperor's new clothes,you say? Sssshhhhh, this is the work of two greats of our time. They have spent millions and used forests ...

PMI firms say they will survive gene test era

8 Aug 2002

Private medical insurers have rejected a prediction by Nobel Prize-winning scientist Sir Paul Nurse that the individual PMI sector will disappear within 50 years. Nurse, a leading researcher and joint head of cancer charity, Cancer Research UK, said this week that advances in genetic testing will make the PMI market redundant within 30 to 50 years. But product providers say they are capable of adapting to advances in medical science and if genetic testing begins to play a more ...

Product matters

8 Aug 2002

Britannic Money has long claimed, with some reason, to be an innovator in the mortgage market. Following its registration of Cam (current account mortgage) as a trademark, it continues to increase its range with the flexible restart homeloan, which is being rolled out through three packagers. The deal comes in three guises, ranging from mild to heavy adverse credit history and all the rates are linked to three-month Libor. With the Libor rate set at 4.21 per cent, the rates range from ...

Revenue set to prevent long Isa lock-ins

8 Aug 2002

Isa providers will be prevented from locking in investors for lengthy periods under rule changes proposed by the Inland Revenue. The amendments, which will take effect from October 1 if they receive Treasury approval, will mainly affect cash Isas. Providers will not be prevented from offering five-year fixed or guaranteed rates but investors will be allowed to withdraw or transfer their funds by giving 30 days' notice. Previously, some providers of mini cash Isas refused to ...

Royal London and Mortgage 2000 link up

8 Aug 2002

Royal London has chosen sourcing company Mortgage 2000 to provide an online electronic trading platform for its tied salesforce advisers as part of a strategy to offer a full range of financial products. This follows a pilot of the service in London since April. Mortgage 2000 will offer sourcing and illustration facilities and an electronic trading system dealing with a panel of 35 lenders. Royal London has also recruited 20 mortgage advisers and is recruiting more to cover the country.

Sandler report prompts sale of stakeholder.co.uk

8 Aug 2002

Online pension information site stakeholder.co.uk has been put up for sale as its owner believes the Sandler report's proposal for a suite of stakeholder products enhances its value. Corporate finance company Optimise Holdings has been appointed to sell The Stakeholder Group, parent of stakeholder.co.uk. Stakeholder.co.uk managing director Chris Dixon says a wider usage of the word "stakeholder" proposed under Sandler makes the domain name more appealing to product providers. Stakeholder.co

Scottish Life sees increase in pensions business

9 Aug 2002

Scottish Life has announced another strong increase in the amount of pensions business it has carried out in 2002.

SG Hambros targets high-net-worth clients

13 Aug 2002

Wealth management group SG Hambros has established a guaranteed offshore bond that is linked to the FTSE 100 and Eurostoxx 50 indices for an 18-month term.

SLI offers investors option to quit after missing out charges on fund literature

8 Aug 2002

Scottish Life International is having to write to investors in its latest structured product notifying them of the fund's charges after failing to cover them in its initial marketing literature. Following discussions with the FSA, SLI is sending a cooling-off letter explaining all aspects of the protected term deposit fund after failing to state its 10.2 per cent minimum growth was gross of charges as well as tax. As the charges that were omitted would total around 8 per cent ...

Talkback

8 Aug 2002

"No, it has been around a long time, I have been using Scottish Life for 20 years or more. It would be a shame if it were to disappear and become Royal London." Rodney Henry Van der Molan,Executive & Employer Benefits Services & Co "Whether they do or not I am not fussed." Nicholas Feldman,N M Feldman Financial Services "Yes, if they need to. The way things are changing in the industry it will not cause too much problem as clients are getting used to name changes ...

The missing link

8 Aug 2002

This week, all non-gooners will be pleased that I am not starting with an extended analysis of Arsenal's 2001/02 season although, having just watched the Magic Hat video, we really did play some stunning football. Only a few weeks to go until we roll again, if you ignore the now downmarket-sounding Community Shield. Anyway, last week I was looking at an important decision made by the European Court of Justice on the validity of an EU member state restricting tax exemption to dividends ...

Treasury publishes mortgage legislation

7 Aug 2002

The Treasury has today published its new regulation for mortgage advice following the conclusion of consultation started in February. It says once the European Parliament adopts the Insurance Mediation Directive, expected in September this year, there will be a further announcement about the timetable for implementation of mortgage regulation. This was originally intended to come in from the second quarter of 2004. The FSA is expected to begin its consultation next week. Financial ...

Two mistakes that could prove costly

8 Aug 2002

Two fundamental errors in current thinking could result in dire consequences for the financial services industry. One is a relatively new mistake. The second is a classic triumph of faint hope over experience and has been made repeatedly in the past. The first is to believe that cheaper and simpler products will close the savings gap. Only a seismic shift in consumer attitudes ("holiday now or jam tomorrow?") will achieve this - cheaper products will not. The second is ...

Unicorn rides on wave of smaller companies

8 Aug 2002

Unicorn Asset Management has established the Unicorn UK smaller companies fund, an Oeic which consists of a portfolio of 35 to 40 stocks.

Verity's view

8 Aug 2002

Three weeks ago, a Radio 1 news hack sent an email to the BBC's entire corps of journalists appealing for help. Temporarily bored with Big Brother, Newsbeat was running out of zippy, exciting news ideas with which to fill up its bulletins and was looking for any stories relevant or interesting to young people to liven up its bulletin. So I suggested pensions. Yes, yes, I explained in my emailed reply, I know it is not exactly funky. If Newsbeat's morning newsreader Andrew ...

Winterthur to widen its range

8 Aug 2002

Winterthur Life is planning to broaden its product range into life and investments when it moves under the Credit Suisse brand umbrella next year. Sipp specialist Winterthur is expected to drop its 125-year-old brand in the first half of 2003. It has a project team working on the detail of an investment bond product and has suggested that life insurance products and Isas could follow. An announcement on its new name related to its parent's brand will be made within the next ...

Yorkshire offers two fixed-rate loans

8 Aug 2002

Yorkshire Building Society is offering two flexible fixed-rate mortgages with loan to value ratios of up to 95 per cent, which it claims offer the best rates on the market. The two-year fixed-rate loan is set at 4.49 per cent. Arrangement fee is £325 or 4.79 per cent with no arrangement fee. The five-year loan is fixed at 5.24 per cent. Arrangement fee is £325 or 5.39 per cent without the fee.