View more on these topics

ABI could add cash fund sector

The Association of British Insurers could introduce a new cash fund sector in the wake of its probe into money market funds.

Last week, the ABI said that it it reviewing its money market sector in a bid to improve consumer clarity in light of current economic circumstances. It says it will propose options for reform in April which will be followed by a review of other ABI fund sectors.

The review follows Standard Life’s decision to compensate pension sterling fund investors after it emerged that the fund had over 40 per cent invested in mortgage-backed securities rather than being “wholly invested in cash” as its literature suggested.

ABI spokesman Jon French says the need for the probe was crystallised over the past three to four weeks due to market conditions. He denies that the outcry over the Standard Life fund led to the review.

French says: “One suggestion is that we introduce an additional sector for funds which are genuinely invested in cash compared with money market funds that are invested in money market instruments close to cash. We will also examine options such as changes in the assets which are permissible within different sectors and changes to sector definitions.”

Hargreaves Lansdown head of pensions research Tom McPhail says: “This is a depressingly transparent case of shutting the stable door after the horse has bolted. We welcome the move but it is a painfully overdue acknowledge- ment that the sector definitions need an overhaul.

“I believe the ABI needs to come up with two definitions, one for genuine cash or near-cash funds and another one that is more akin to what we currently know as money market funds. My instinct is that the vast majority of investors will go for the cash variation.”


Identity crisis

At our last Meeting of Minds event, which brings together the chiefs of all the top distribution firms, a key conversation was the trend towards offering defined service solutions to the client.

Confidence builder

You may recall, that Sir Callum McCarthy’s Gleneagles’ speech used historical references to make a point about how incentives drive behaviour and how the wrong incentives can have results that are contrary to the public interest.

Globe - thumbnail

Considerations for overseas workers in Germany

With Germany’s strong economic growth leading the eurozone’s recovery, many UK businesses are keen to be part of the success story: recent data shows that there are currently more than 280,000* employees working for a UK-controlled company in the country.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm