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Information is the key for with-profits clients

Leading consultancy KPMG is urging life offices to provide with-profits

customers specific details of how bonus policies are calculated in a bid to

to restore confidence.

In the wake of the FSA&#39s with-profits review and Equitable Life slashing

its bonuses, KPMG says customers need to make an informed choice about

their appetite for risk.

There is still a future for with-profits, says KPMG, but consumers must be

kept informed if they are going to trust the life office with their


The easiest way to achieve this objective is for life offices to define

and publish the bases they use in calculating the amounts policyholders

will receive.

The consultancy says these would include details of how the investment

returns will be smoothed, how expenses will be charged to the policy, the

basis for providing lock-in guarantees and any circumstances in which

surrender penalties will be levied and how any penalties will be arrived at.

KPMG head of actuarial services Seamus Creedon says if with-profits

policyholders are provided with improved individual contractual rights,

there is no need to give them rights of representation or to have a

designated actuary look after their interests.

Creedon says: “In the past, regulatory protection has been directed at

policyholders as a class. But, as the Equitable Life case has shown, it is

quite possible for individual policyholders to lose out to other



Pru calls for stakeholder review

The Prudential is calling on the Government to review its stakeholder pensions in 12 to 18 months time to gauge how successful the products have been.In announcing its business results for the six months to June, chief executive Jonathon Bloomer said the take-up of the pensions would have to be looked at and changes such […]

Signs of life as funds bounce back

Unit trust and Oeics showed signs of recovery in the second quarter, with71 per cent of funds producing positive returns. The figures published in Lipper&#39s latest quarterly fund survey show theaverage fund return has risen by 2.52 per cent over the three months toJuly, making it the best quarter since the first quarter of last […]

CML says lenders must innovate to keep share

Mortgage lenders must continue to innovate with new products or facedramatic loss of market share, warns the Council of Mortgage Lenders. Research by the CML suggests the ageing and increasingly migratoryhomebuying population will look to lenders capable of offering a morediverse range of mortgages over the next 20 years and desert those which donot. The […]

Free loan cover from Leeds & Holbeck

Leeds & Holbeck is offering free mortgage payment protection insurance on all new mortgages this week. The insurance is provided by Norwich Union and provides cover for mortgage payments against sickness, accident, unemployment or hospitalisation. The offer is for £154.14 worth of cover over six months on a 20 year £60,000 capital and interest mortgage […]

Global equities: time to de-risk?

While equity valuations have doubled since the financial crisis, Simon Edelsten explains that there are still pockets of value. But not where you might think Macro-economic uncertainty is causing turbulence in equity markets. Artemis Global Select Fund manager Simon Edelsten says his investment themes are taking him in a different direction to some of his peers – away […]


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