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FSA eyes firm claiming to solve endowment crisis

The FSA is understood to be closely monitoring a company which claims it

can solve the endowment shortfall crisis.

Mortgages Paid for Sure launches this week, arousing fears from both the

regulator and lenders because the venture is not underwritten by any bank

or life office.

The Midlands-based firm is offering endowment policyholders the chance to

pay a one-off £175 fee to guarantee any shortfalls will be paid. If

policies pay out a surplus, MPFS takes a 25 per cent cut.

But suspicion about the firm is rife as it relies only on a reserve fund

stumped up by its five directors, which will be topped-up from the

registration fee.

The reserve fund is also dependent on individuals surrendering their

policies, which incurs a penalty of 10 per cent of the surrender value.

This flies in the face of received wisdom on best advice for endowments

which recommends policies should not be surrendered.

FSA spokeswoman Sarah Modlock says: “The sort of business they are running

requires some sort of financial backing under the Insurance Companies Act.”


IFAP survey shows advice is not just for the wealthy

IFA Promotion has dispelled the myth that independent financial advice isonly for the well-off.Research reveals that 41 per cent of users of the IFAP hotline service arein the C1, C2, D and E social brackets.Those in the C1 group – white-collar workers – were found to be more loyalthan other users, with 84 per cent […]

Communicating to existing clients

The fact that most employers will have to consider the impact that the stakeholder regulations will have on them, will mean you have a number of prospective stakeholder clients within your own client bank. Historically, existing clients have been a very profitable source of business for the IFA market. If you do not contact your […]

IFAs told to make supermart choice

The fund supermarket war hotted up this week with latest entrantConsolidated Funds warning IFAs they must choose between the company orrival Fidelity.Consolidated has told IFAs it will be impossible to sign up to bothcompanies because they will experience operational difficulties.It says signing up to Fidelity means they risk missing out on Consolidated funds.Consolidated Funds chief […]

Edinburgh trust&#39s promotion drive to 6,000 advisers

Edinburgh Investment Trust is striving to forge new links with IFAs.The trust is promoting itself on the back of recent past performance whichhas seen it return 15 per cent growth in the last year, beating itsbenchmark by 7.6 per cent.A letter outlining thefund has been sent to the 6,000 IFAs who are membersof the AITC&#39s […]

'Feeling the Squeeze'

Royal London carried out a UK wide survey with 2,500 consumers age 35-44 over the summer. The survey found that over a third, 34 per cent, said their finances felt Squeezed and so were struggling to meet day-to-day expenses, despite 87 per cent being aware that they need to save more. However, the survey did […]


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