View more on these topics

&#39Abbey closed WP funds need no further capital&#39

Abbey says its closed Scottish Provident and Scottish Mutual funds need no further capital to comply with the FSA&#39s realistic reporting requirements and it plans to increase the equity content of both.

The company says just under half of its with-profits policyholders&#39 market value reductions will be improved, with the remainder staying the same.

ScotProv&#39s maximum MVRs fall from 26 per cent to 17 per cent while ScotMut&#39s maximum MVR stays at 26 per cent although it will affect fewer policyholders. Abbey says the equity exposure in the funds will increase from 24 per cent for ScotProv and 28 per cent for ScotMut to around 35 per cent across the board.

From July 20, Abbey is allowing policyholders in the Scottish Mutual with-profits investment bond and select with-profits bond to switch from the with-profits fund into either the smoothed investment fund or the multi-manager funds without a surrender penalty although a market value reduction will apply.

Abbey will also increase the number of unitised with-profits policyholders who can switch funds to allow investment in funds with higher equ-ity backing ratios than the with-profits fund. Abbey National Life customers can already move their investments to alternative products without facing surrender charges.

In recent weeks, there has been speculation that Abbey intends to sell its with-profits closed books but it says it has no current plans to offload its with-profits businesses.

Director of intermediary distribution Ambrose McGinn says: “The future make-up and ongoing investment management of the with-profits funds of both Scottish Mutual and Scottish Provident have now been settled. Our with-profits customers and their advisers now make investment decisions based on the detail in today&#39s announcement and taking account of individual circumstances.”

Recommended

Talkback

“Yes. The idea is sound but whether it will be implemented by IFAs or not is another matter.”Chris Moxon,CW Moxon & Co “Yes. I don&#39t expect it will work but something has to be done over misleading ads.”Pravin Bhatt,Bhatt & Associates “Yes, but its success depends on whether people use it.”Michael Rice,MJR Financial Services “I […]

Nikko is close to selling off Mortgages plc

Mortgages plc is to be sold by majority shareholder Nikko Principal Investments. The sale will involve all Mortgages plc&#39s group companies, including Genesis. Nikko has entered into negotiations with a global financial institution and has granted a period of exclusivity to allow the institution to go through a process of due diligence prior to completing […]

Worldwide buys Kingsmead IFA and sets out its plan to move into top 50

Cornwall IFA Worldwide Financial Planning has bought Kingsmead IFA in a deal that brings the number of its offices to seven. The acquisition will add £0.5m turnover to Worldwide which says it is on course to achieve its £3m turnover target by the end sof the year. Kingsmead&#39s six RIs bring the total number of […]

Ex-MD pleads guilty to £750k theft

Lucas Fettes & Partners former managing director Michael Hart has pleaded guilty to 14 counts of theft amounting to £750,000 at Norwich magistrates court. The former IFA has asked for 40 cases to be taken into account, taking the amount stolen from Lucas Fettes and insurance broker Heath & Co to £1.73m from 21 clients. […]

China’s economic bounce may already be over

By Mike Riddell (17 May 2016) Most people would explain the rally in global risky assets since mid-February as being primarily down to the spectacular volte-face from the Federal Reserve, where Janet Yellen (and others) dramatically toned down their narrative that the Fed would be hiking rates as many as four times in 2016. This explanation […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment