View more on these topics

Counterparty call may bring more openness

Increasing investor demand for transparent counterparty disclosure may drive changes for the structured product industry, according to Bestinvest.

Bestinvest senior investment adviser Adrian Lowcock said more investors want to know the identity of counterparties as their trust falters in major banking institutions and this may force more open disclosure in the market.

He said: “There is going to be greater pressure to name the counterparty so investors may end up driving the market. They are the people buying the products and if the IFAs do not know the counterparty they will not be able to sell the product confidently.”

AWD Chase de Vere head of structured product and protection research Julie Smith said: “I would not put anything on panel unless I knew the counterparty and what the structure was but I keep that information and it is embargoed. I do not tell the adviser who it is but they know I am happy who the counterparty is and its financial strength.”

Smith said public offer rules block disclosing this information. She added: “If you look at the example of Lehmans, they had a good S&P rating and CDS levels were not too poor but overall, even knowing who the counterparty was, you were in no better position than not knowing.”


Consolidate with destiny

The reasons behind the FSA’s desire for IFA businesses to be better capitalised, for advisers to be better qualified and for initial commission to be consigned to history have already been commented on widely in the press. Implementation of these measures, in line with last year’s retail distribution review, will undoubtedly help to professionalise and raise the esteem of the IFA industry.

Prudent shall ensure value

Last week, I focused on the importance and potentially strong commercial benefit in adopting a “provocation-based” approach to doing business with existing clients and to acquiring new clients – of the right type.

Data reflection for income protection

Providers have been promoting their critical illness claims statistics, with Aegon paying 91 per cent, Norwich Union paying 90 per cent and Scottish Provident paying 86.7 per cent of CI claims in 2008.


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