View more on these topics

Ex-lenders facing challenge on savings move

Homefunding chief executive Tony Ward warns that moves by ex-lenders into the retail savings products arena present challenges for their distribution database.

In an article for Money Marketing’s Cracking the Crunch website, Ward questions whether intermediaries are equipped to move into the retail savings market.

His comments follow Edeus’s partnership with Newcastle Building Society which will see it offer two savings products to its broker database. It has promised a procuration fee of up to 2.75 per cent of the deposit.

Edeus says intermediaries do not need FSA investment permission or to produce a key features document as the products are sold on an informed choice basis.

Ward says: “How many int-ermediaries have successfully integrated treating customers fairly into their businesses and are equipped to move into this product arena? It is asking new questions of their distribution.” He says he is interested to see what impact the retail distribution review will have on this idea.

Ward believes these former lenders must see the wave as just a way of earning commission. He says: “By selling a building society bond, branded as its own, it uses its broking distribution database to sell the products. The broker gets commission, it gets some too, and the institution gets its funds – a kind of savings packager.”

“I must conclude it is a temporary measure, not least because no savings product provider wants to pay two sets of commission when it can get away with one.

“In cash-hungry businesses such as brokers, business turnover is everything but is it sustainable in the longer term?”


JPM looks to the consumer

JPMorgan Asset Management has introduced a thematic fund that invests in companies that provide consumer goods and services.

Barclays kicks out

Barclays Wealth has introduced a FTSE 100-linked capital -protected bond that has the potential to mature each year during its five-year term.


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