The average market value reduction on with-profits funds has fallen from 42 per cent to 5 per cent over the past three-and-a-half years.Data from Standard & Poor’s shows that MVRs hit their peak in December 2002 and have since been on a gradual downward spiral as investment markets have recovered from the dotcom crash. Last week, both Norwich Union and Scottish Widows made further cuts in MVRs across their with-profits funds. But both firms warned that despite improving returns and decreasing MVRs, WP payouts are set to continue falling for at least the short term. The Hartford managing director, marketing, John Enos says: “With-profits is a non-performing asset. We have seen MVRs come down as a percentage of surrender values in the past few years but with-profits bonus rates are on average around 2 per cent despite investment returns of 9-10 per cent.” Hargreaves Lansdown head of research Mark Dampier says: “The stronger life offices do not need to charge MVRs but I am still not sure that there is a future for with-profits. “Everyone has lost so much faith in it and that is partly because people now partly understand how it works and do not want it now.”
Premier Fund Managers
UK Growth Plan Limited Editions 27
Friends Provident saw total life and pension business rise by 33 per cent from 212m to 282m in the first half of this year but says the market is difficult to assess in the run-up to A-Day.
Progress is being made in revamping the Foreign & Colonial investment trust.
Friends Provident saw total life and pensions business rise 33 per cent in the first half of 2005 but says the market is difficult to call in the run up to A day.Total life and pensions new business weighed in at 282m on an APE basis, up from 212m in the first half of last […]
By Kunal Desai, Head of Indian Equities The Neptune India Fund’s investment process serves as a key differentiating feature of the portfolio versus its peers, contributing to its significant outperformance under Manager Kunal Desai’s tenure. Focusing on industry disruption, accounting quality, liquidity and corporate governance, Kunal sets out three stocks that he’s buying in the […]
News and expert analysis straight to your inboxSign up
Latest from Money Marketing
Scotland has introduced a new set of income tax bands, but pensions experts warn that the changes could cause issues with pension tax relief calculations. In the Scottish Budget today, the Government announced a new starter rate of 19p and then a 21p rate for those earning over £24,000. The higher rate of tax is […]
The scramble to do as many defined benefit transfers as possible while values remain high is unabated, and I am constantly amazed at how some firms have thrown caution to the wind in the hunt for their share of this – admittedly lucrative – opportunity. The problem is that advisers are putting their profits before […]
The FCA working group tasked with setting a template for fund charge disclosure is considering whether one or multiple templates would be more suitable. The institutional disclosure working group, chaired by transparency champion Chris Sier, has been tasked with creating a new template for fund costs and charges following the package of remedies outlined in […]