View more on these topics

Debate highlighted misunderstanding of with-profits

It was good to read your lively debate on with-profits (Money Marketing, April 15) but it strikes me that most of the people on the panel would not know with-profits if it jumped up and bit them on the nose although at least Prudential gave a good account of itself.

I conclude that the only reason you give Mick McAteer so much space in your columns is to elicit letters from people like myself. If the Consumers&#39 Association conducted accurate research and was truly representative of the consumer, it would do more to promote savings rather than destroy the infrastructure.

I leave your readers to judge what comes before a McFall. I can only say that, as the chairman of the Treasury select committee, having read all the evidence and noted the balance and expertise of the witnesses, his particular reference to endowment mortgages left a lot to be desired. Yet another individual who fails to understand the workings of with-profits funds.

Do the public understand? You bet they do. Those who stay the course invariably see the benefit of with-profits funds, particularly over the long term.

The continual barrage of criticism of with-profits, as the Pru&#39s Mark Wood points out, is totally disproportionate when you consider how many people have lost huge capital sums in the last few years, with not a column inch dedicated to their cause.

What you should remember is that it was Hargreaves Lansdown and Best Invest who advised clients to come out of with-profits funds (particularly those with Standard Life who did not have an MVA) halfway down the slippery slope to the bottom of the market.

Perhaps your next debate should be whether those policyholders ended up with more or less of their investment capital in March 2004 after a 50 per cent recovery in the 250 and 350 indices and upward of 30 per cent on the FTSE 100.

Needless to say, Standard Life was forced to invoke an MVA because of the outflow of funds by irresponsible advisers. IFAs? I don&#39t think so. Valid independent comment? Not in my experience. Churners? Well, that is a completely different topic. Perhaps you should have a debate on that as well.

Thank you at least for organising the debate. The report in your paper made very interesting reading, even if the two sides of the argument were rather unevenly matched.

Terence O&#39Halloran Chartered insurance practitioner, O&#39Halloran & Co, Lincoln


Edinburgh Partners – UK Opportunities Fund

Type: Oeic Aim: Growth by investing in UK companies Minimum investment: Lump sum £10,000 Investment split: 100% in UK equities Place of registration: Dublin Charges: Initial up to 5%, annual 1.25% Commission: Subject to negotiation Tel: 0131 270 5570

From the FSA team to the A Team?

An invitation to a gala dinner from The Compliance Register, the international organisation for compliance managers, started a rumour that FSA supremo John Tiner could be leading the after-dinner entertainment. A circular promises live music from The Deadbeats, starring Credit Suisse Asset Management&#39s Bob White on lead guitar and a mysterious Mr T from the […]

Reid all about it

As someone who has survived the chore of a quarterly VAT return for over five years, I still recall the pain of being subject to a formal VAT visit. The visit came about after I asked the local VAT office about how a particular purchase from another EU country should be handled. Its advice was […]

Route march

The FSA&#39s deadline for direct authorisation registration is upon us and the networks are lining up their mortgage offerings. After April 30, firms are not guaranteed that their direct authorisation applications will be processed in time to continue doing business and networks are seeing this as the perfect opportunity to bring new recruits on board. […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment