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Autif&#39s McMeehan slams &#39short-termist&#39 pension fund strategies

Pension trustees and fund managers are becoming “short-sighted, short-termist and lacking in vision” and will continue to move towards less volatile investments, according to Autif director of communications Anne McMeehan.

The increasing frequency of reviews of investment strategy of pension funds means individual managers will want to be sure of some positive returns over shorter periods to be retained, and will lead to more pension funds following the Boots pension fund out of equities and into bonds, said McMeehan, speaking at IFA UK last week.

McMeehan said: “Forgive me for my cynicism but pension mandates are being reviewed over increasingly shorter periods. The average pension fund manager&#39s mandate is now for three years. If a pension fund manager knows he may lose his mandate he will feel the need to generate more secure income.”

Boots has come in for criticism for responding to the bear market by switching its pension fund entirely into bonds to meet its defined-benefit pension obligations.

Edinburgh Fund Managers managing director Harry Morgan said: “I think Boots&#39 decision is extraordinary. They are only buying triple and double-A-rated bonds when quality corporate bonds have been performing better. If there is an oil price shock and inflation goes up they will see the value of their returns hit badly.”


Technology could cut processing time by 38 per cent, NU tells Sofa

Using technology efficiently could cut the time of the average transaction by 38 per cent, according to Norwich Union.Speaking at the Society of Financial Advisers conference in Birmingham this week Norwich Union director of marketing Robert Fletcher told delegates that a typical sales transaction took 3 hours attendance with the client, 1.5 hours for analysis, […]

Don&#39t go wide of the benchmark

Over the last few weeks, I have been conducting a series of seminars on investment portfolio planning for over 1,500 IFAs and around 600 broker consultants. One of the more popular sessions has touched on the interpretation of data in the quality financial newspapers and its uses in mainstream financial planning.Over the next few articles, […]

FSA move to axe designations in exams overhaul

The FSA has unveiled proposals to replace designatory letters, introduce limited retesting, toughen entrance exams and back a single accreditation scheme in the long-awaited paper on IFA qualifications.The news comes as head of industry training David Jackman has provoked a row with IFAs by agreeing with Ron Sandler that IFAs&#39 investment knowledge is not up […]

Consumer borrowing set to fall amid fear of rate rises

Consumer borrowing is set to plummet this month, with Britons intending to borrow an average of £29 a person, according to findings from Alliance & Leicester.This is almost half the amount borrowed per person in July, which stood at £56.A&L&#39s quarterly wealth tracker index shows that Britons fear being burdened with debt if interest rates […]


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