View more on these topics

Cazalet tells industry to stand up and fight price caps

Life analyst Ned Cazalet has hit out at product providers for not standing up to Government ministers over price-capping and has described the £27bn savings gap as a “leap of fantasy”.

Cazalet, speaking at the Investment and Life Assurance Group annual dinner in London last week, said product providers had to tell the Government that price-capping was stopping them from making a profit.

He suggested that despite the fact that the Sandler products would do exactly what they said on the tin, no one would want to sell them to a bus driver and a bus driver would not buy them.

Cazalet was scathing about the cap and the savings gap, saying: “Why doesn&#39t somebody say to the minister we are commercial organisations? We have to make a commercial profit. I do not know what the trade bodies do. Why don&#39t they say we cannot put up with it? It does not help itself by going along with this nonsense. But it does not help going to the other extreme on £27bn for the savings gap.”

He said levels of discontinuance were running at 75 per cent of new business and last year&#39s £3.7bn spent on initial commission and £3.4bn in assimilating new business was unsustainable.

Rising volatility and falling returns made equity savings less appealing, said Cazalet, but, despite this, changing demographics still meant there were great opportunities for providers.

Recommended

Green Paper will not review pension credit

The pension credit and the interface between state and private pensions will not be reviewed in the pensions Green Paper, Downing Street economic adviser Derek Scott has told Money Marketing.Scott, the Prime Minister&#39s personal economic adviser, says the Government has no appetite for a rethink on the pension credit which is due to be introduced […]

Top up with a Tep

From September 1, the FSA has required life offices to inform policyholders who enquire about surrendering endowment policies that they may be able to obtain a higher price on the secondary market. This will increase the number and variety of Teps available to investors.People are more worried about their future than they have been for […]

Aberdeen to float property arm

Aberdeen Asset Management is to float its property management division and has cut the size of its board of directors by almost half.Aberdeen Property Investors represents 26 per cent of the overall group&#39s assets under management, with earnings in the year to September 30 reaching £10m.The company at the centre of the split-cap investment trust […]

Inside edge

Is there a future for with-profits? It might have seemed unthinkable only a few years ago to ask such a question. How could a product with over£480bn invested in it and providing long-term returns of up to 11 per cent after tax become the subject of such negativity?Well, volatile investment conditions, falling bonus rates, market […]

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