View more on these topics

Chancellor backs IFA commission attack

The retail investment industry is now facing a Myners-style investigation, following attacks on IFA commission and with-profits policies in the Myners report.

The Chancellor announced in this week’s budget that the Treasury has accepted the recommendations of the Myners report, and will carry out a separate independent review on personal investment products.

The review is set to look at commission levels, with-profits, unit and investment trusts and the skill base of advisers.

Myners says IFA recommendations are slanted by higher offers of commission from life offices. It says lesser known life offices can increase sales by improving commission terms.

The report says this ‘casts doubt over whether competition for policyholders by life offices is on the basis of investment performance.’

Aifa has reacted angrily to the implication there is a link between commission to IFAs and the products selected. It points to the London Economics report which found no evidence of commission levels buying business.

Life offices also look set to be scrutinised for their use of free asset ratios, which the report says can be manipulated, the obscurity of with-profits business, in particular the relationship between bonus payments and fund performance, is also challenged.

This fresh investigation comes as a surprise to most of the industry as with-profits business is already coming under close scrutiny from the FSA.

The Treasury has not released details on who is to chair the investigation or what timescale and exact remit it will have.

FSA spokesman Rob McIvor says: "We see this review as complementing the work we’re doing rather than supplanting it. It appears to be going in to territory we aren’t covering, such as unit trusts and the commercial relationship between advisers and providers."

Aifa chairman Lord Hunt says: "Surprisingly the Myners report strays in to the area of personal finance when its primary concern is institutional investment. A new inquiry looks like a review too far."

Syndaxi Financial Planning principle Robert Reid says: "I think the danger in having two reviews running simultaneously is that we could find ourselves implementing changes from one report when proposed changes from the other report push us in another direction."


Northern Rock feels the seven year fix

Northern Rock is the second lender to offer a seven year fixed rate mortgage.The mortgage has a seven-year fixed rate of 5.79 per cent for loans of up to 95 per cent of valuation and is available to all borrowers. It is also fully portable.The 5.79 per cent fixed rate mortgage has redemption penalties of […]

Revenue renews IPA commitment

The Inland Revenue has renewed its commitment to launching Individual Pension Accounts on April 6 despite industry concerns that it will not have sufficient time to develop appropriate products.Pension experts say that because of the delayed publication of the final regulations for the new pension vehicle, they will struggle to develop a product in time. […]

WP survey slams free-asset ratios

The UK&#39s top with-profits life offices are Britannic Assurance, Liverpool Victoria Friendly Society and Teachers, according to a new survey by Cazalet Financial Consulting. All three life offices get 10 marks out of 10 in the survey which uses a new system designed by Cazalet. Equitable Life was rated before it closed to new business […]

Take a positive view of review

The forthcoming review on polarisation could be divisive and damaging with a negative impact upon all parts of the industry. However, have we fully considered that this could be an opportunity to work co-operatively? It could have a positive effect on the image of the whole sector, and reduce the blood pressure of those working […]

Happy while you work

Well we’ve had scorching weather (yes even up here in Scotland!) and now the Euros 2016 are on – you can’t blame people for wishing life was just one big holiday.  With all these distractions it sometimes feels like work just gets in the way of having a good time! But sunny day skivers are […]


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