View more on these topics

Firms deny with-profits push

Product providers have rejected claims that a recent surge in with-profits bond sales is the result of a marketing push.

Prudential and Norwich Union reported big rises in WP bond sales in their interim results but say there has been no particular marketing drive.

However, Legal & General says a 133 per cent increase in its WP bond sales in the first half of 2008 compared with the same period last year was due partly to the launch of two products in May, the capital protection income bond and capital protection growth bond.

Hargreaves Lansdown chief executive Peter Hargreaves recently suggested that commission levels of around 7 per cent could be driving advisers to “shovel” the products.

L&G declines to reveal the commission level paid on its new products due to commercial sensitivity but says it tries to ensure it does not create commission bias between different product types.

NU head of investment marketing Richard Kelsall says: “There has been no specific sales push but we have always promoted the products as a safe place for money.”

Syndaxi Financial Planning principal Robert Reid says: “With markets difficult to call, reaching for with-profits is not necessarily sensible as there is no explicit downside guarantee and if you are doing so because of increased commission, it is unethical.”

Recommended

Pawns in the game

Given the gathering clouds on economic performance, shares have been remarkably resilient. As the autumn approaches and that most capricious of months, October, nears, can we be sanguine over our likely fortunes?

Keep up the pressure on pensions

The Conservatives’ back-room policy scribes have been busy this summer drafting Shadow Chancellor George Osborne’s Unfair Britain dossier.

Planning now for the residence nil-rate band

Graeme Robb, senior technical manager at Prudential, writes about the residence nil-rate band and the advice opportunities it presents for you when tax year-end planning with your clients. On our Planning Matters hub, we considered a widow, Margaret, and a married couple, John and Anne, for whom the residence nil-rate band (RNRB) is influencing planning […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment