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Lower ratings for Clerical and Widows

Moody’s has highlighted the weak profitability of Clerical Medical’s business through IFAs.

This week, the rating agency downgraded both Clerical and Scottish Widows to reflect a downgrade of parent Lloyds Banking Group from B+ to C+.

Moody’s points out Widows’ “strong and diversified distribution through both IFAs and Lloyds TSB’s bank branches and good product risk with sales in all major lines”.

But it refers to Clerical’s “weak profitability, in particular, those generated through the IFA channel” which it says is offset by its strong business profile, well-diversified distribution channels and good capitalisation.

P3 managing director Frank O’Connell says: “Strong firms have good contact with advisers but Clerical just emails us and expects us to run round after them. Widows has more contact and support.”

Church Hill Finance principal Anthony Badaloo says: “Clerical communication seems to have been done away with.”

Clerical says it anticipated the downgrade and remains strongly rated in line with its global peers.


Rose-tinted statistics

Certain statistics have been released recently that may lead some to believe the economic situation is getting better. The Halifax house price index recorded a 1.9 per cent increase last month while retail sales showed a big tick up. Unfortunately, I am convinced that both are just blips.

Fee rise is unfair for advisers

It would be grossly unfair if the advice sector shouldered more of the financial burden of the current crisis than other sectors of financial services. Indeed, there is a strong argument for why they should shoulder proportionately less.

Campaign victory

Well, we got there. Some months ago, I talked in this column of how a generic industry marketing or advertising campaign might be got off the ground.


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