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Integrity is vital in rebroking

Having worked over the years with a number of advisers who were, let us say, keen on bond rebroking, I have always been a bit suspicious of whose interest is really being served.

What Glynn Downton fails to point out (Money Marketing, September 28) is that the new bond he has recommended to his clients almost certainly has a limited administration or establishment charge, usually levied at 0.5 per cent of the investment value for the first five years. While Mr Downton claims that the benefit to his client of his advice is around 8,000, a quick bit of maths suggests that the uplift for the client is probably nearer 3,500 when the additional charge is taken into account.

Some people will accuse me of being a bit sniffy about this. After all, the client will certainly benefit in this case. However, if the provider in question did not have a special offer available at the time, which I presume is the case here, or a less generous IFA did not give up some commission, as has Mr Downton, the client would probably end up in a worse position after rebroking.

We should take advantage of insurers buying business if this is benefits our clients. However, insurance companies are not charities and we must all endeavour to understand all policy charges before advising clients if the integrity of the profession is to remain intact.

Malcolm Robinson

IFA consultant,

HW Financial Services,

High Wycombe, Bucks


Pivotal points

Sources say a pension-style review of contracting out could cost the industry almost £3bn. To put this into perspective, and to demonstrate why the industry is so anxious to put its own house in order quietly, the combined profits of UK-listed insurers in 2005 was £6.376bn.

Kayes quits Tenet at the top

Tenet chairman Barry Kayes is leaving the firm, saying he would rather go out on a high than “do a Tony Blair” and outstay his welcome. He has been chairman since 2000 when the Tenet Group was formed from the 17m management buyout of M&E and Interdependence. Kayes, who is expected to seek another position […]

Carr joins Cordea Savills

Cordea Savills has appointed former manager of the ING UK residential property fund Patrick Carr as director of UK Residential.Carr joins the residential team managing the diversified residential opportunities fund, the Cordea Savills student hall fund and the accommodation investment fund for charities.Carr worked for ING Real Estate for seven years spending the last two […]

Stop the cold-calling

Royal London is pleased to support the petition calling for a ban on cold-calling for pension and investment products. The petition, launched by IFA Darren Cooke of Red Circle Financial Planning and hosted on the Parliamentary website, calls on the Government to ban cold-calling for pensions and investment products. A similar ban is already in force […]


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