View more on these topics

Analysts commend FSA&#39s handling of endowment crisis

Independent analysts have praised the FSA&#39s conduct in the endowment crisis despite IFA concerns.

Analyst Ned Cazalet of Cazalet Financial Consulting believes the FSA was sensible to revise projection rates in light of changes to the economic cli-mate. Both bond yields and the yield from the FTSE All Share index have fallen dramatically in recent years.

His opinion is shared by Merrill Lynch analyst Roman Cizdyn.

Cazalet says the FSA is also right not to factor in product charges to the projection rates as these fluctuate, while Cizdyn points out that information on charges is in the public domain for anyone who wants to use it.

A group of IFAs have claimed that the projection rates are flawed because they do not take into account expenses such as administration charges, which have the effect of reducing returns.

IFAs have also accused the FSA of creating an endowment “scare” but Cazalet believes the regulator has done the right thing.

The new projections rates have prompted the FSA, the ABI and life offices to write to consumers informing them of potential shortfalls in their endowment policies and advising them what to do next. The letters are colour coded red, amber and green according to the level of danger of a shortfall on maturity of the endowment – red being high risk and green low.

Money Marketing revealed last month that a staggering 40 per cent of the 10 million letters sent out are red and 20 per centare amber.

Cazalet says: “The rates had to be reviewed and 6 per cent seems a perf-ectly sensible figure to me. We are now in a low-inflation era. Reductions in yield cannot be included because they go up and down almost from day to day.”

l IFAs&#39 anger, p9

Recommended

Revamp at Charcol in bricks and clicks bid

John Charcol and CharcolOnline are to rebrand as part of a bid to create an integrated business and achieve higher awareness in the market.The move will see the mortgage broker drop John from its name and trade simply as Charcol.John Charcol says the rebranding follows research which shows that only 6 per cent of the […]

Lenders rapped on MPPI

Borrowers can save £1,500 over the lifetime of their mortgage by moving their mortgage payment protection ins-urance away from their lender, claims a survey.Goodfellows Group found the average cost for the insurance from a lender is £5.06 per £100 of cover. This compares with an average of £4.95 from the broker market. Over a period […]

AbbeyNat takes an online stake

Abbey National is offering an online pre-stakeholder plan for small businesses which it claims allows employees todo most pension admin electronically.The group flexible pension plan will not be available through IFAs but Abbey insists that stakeholder needs advice and says it has a nationwide team of relationship managers to guide employers.It says members will be […]

We challenge the FSA to reveal recommendation

Money Marketing&#39s Poles Apart campaign is demanding that the FSA goes public with its recommendation to the Treasury on polarisation, amid fears it will refuse to do so.The regulator has not decided whether to confirm it will go public, provoking a furious reaction from IFA leaders.The row comes as Treasury economic secretary Melanie Johnson has […]

How to use wills to protect your clients’ wishes

March was Free Wills Month! Free Wills Month brings together a group of well-respected charities to offer members of the public aged 55 and over the opportunity to have their simple wills written or updated free of charge by using participating solicitors in selected locations around England and Wales. Research by the Law Society* highlighted that only 64 […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    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

    Email: customerservices@moneymarketing.com