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Complications of a simple plan

Fans of incremental change should pack their bags – the revolution may hardly have started.

This week gave us insight into Ron Sandler&#39s review. According to one Sunday newspaper, the head of the Treasury savings review believes regulation has stood in the way of people buying simple investment products, literally off the supermarket shelf.

The review could bring another round of simplification, perhaps complemented by the Pickering review of pensions which seems to involve yet another rewrite of the tax rules in coordination with the Inland Revenue.

Many in the industry will agree with the need for simplification. But we would urge the reviewers not to throw out all the old regulations in the cause of getting people to save. There is no point simplifying to the point where more regulation is then required to put right what goes wrong subsequently. Protecting consumers while keeping down costs is a balancing act. Regulating products only works firstly where there is an incentive to sell them and to buy them and where it doesn&#39t leave one or two providers with a stranglehold. That simply shuts down competition.

Finally, simplification should not be used to defraud the public by getting them to save without advice in a bid to bail out the welfare system. It is not their fault for not saving if it is not worth their while. It is the fault of those who created the disincentives in the first place. As advisers are aware, investor education for some income groups may mean telling people not to save. Is the FSA&#39s consumer education programme up to the task and will the assorted reviewers grasp that particular nettle? Somehow we doubt it.


NU and Friends Prov take 20 per cent of Tenet Group

Norwich Union and FriendsProvident are each taking a 10 per cent equity stake in the Tenet Group. In the transaction, both life companies have each invested £9.5m made up of shares and loans in the group which owns networks M& E and Interdependence.

Long delays as NU struggles with overload

Norwich Union appears to be creaking at the seams in coping with new business levels, with IFAs recounting horror stories of dealing with the life office.IFAs say they are experiencing severe backlogs of up to six months with some still waiting for policy documents for stakeholder applications sent in October last year.But NU&#39s problems seem […]


“Yes. I don&#39t think consu-mers will know which way to turn. They will be completely confused.”Paul Walters, Foley Financial Services“Yes. In its current form, the FSA would fail its duties.”Oscar Adams,IFA Plus“Yes, it will take out a lot of people who want to receive independent financial advice but do not want to pay fees and […]

Anything but a pension…

I read the other day that the Department of Work & Pensions is to release its requirement for money-purchase providers to give policyholders a meaningful illustration of their future pension entitlement.It will replace the current PIA-based projections…with a single growth projection of 7 per cent eroded by 2.5 per cent inflation.If we reduce the remaining […]


Case study: administration — implementing a management log

Our client is a leading video game and publishing company best known for its console role-playing game franchises. The client provides a number of benefits, at varying levels and cost that attract a P11d liability. With the absence of a management log to track data for benefit movements, enormous administrative and therefore cost implications were occurring each year just to comply with P11d reporting requirements.


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