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Northern Rock & L&G team up for balanced match

Northern Rock and Legal & General have joined forces to introduce balance-choices, a combination of a with-profits bond and an instant access savings account.

Investors can divide their investment between the two elements within specified limits. They can invest between 50 and 80 per cent in the Legal & General with-profits income bond, which invests in shares, fixed interest securities and commercial property. The rest must go into the Northern Rock instant access savings account, which has a fixed interest rate of 7.05 per cent until July 1, 2002.

The with-profits part of the investment provides cautious investors with higher returns than building society accounts without exposing them to stockmarket volatility. This is useful in the current climate, as interest rates are low and the performance of the stockmarket has been moving in the wrong direction.

The with-profits element pays investors an annual bonus, which is currently 6.50 per cent net of basic rate tax. The amount of the annual bonus is not guaranteed because it depends on the performance of the underlying investments and Legal & General&#39s expectations of their performance in the future. This means that investors could get higher or lower bonuses in subsequent years, which illustrates its lack of transparency.

On the other hand, investors do have penalty-free access to some of their money through the instant access account, which gives them a greater degree of flexibility than investing exclusively in with-profits.


Mark dampier

Hargreaves Lansdown head of research Mark Dampier is a self-confessed“media tart” who loves seeing his name in the national and trade press. But then again, anyone in his position would need to love the attention.Why else would they put themselves forward as the mouthpiece for one of theUK&#39s leading and often controversial IFAs? As the […]

Your Pension @ Norwich Union

NORWICH UNION Your Pension @ Norwich Union Type: Group stakeholder pension. Minimum premium: £20. Minimum group size: 1. Minimum-maximum ages: 16-74. Fund links: Stakeholder with-profits, balanced managed, UK index tracker fund, sustainable future managed, retirement protection, deposit, defensive managed, UK equity, European equity, US equity, global bond, global equity, Pacific equity, index-linked gilt, gilt, international […]

IFA fined £20k over review

The PIA has fined IFA Westerby Investment Man-agement £20,000 forpension review failings. The Hampshire IFA must also pay costs of £3,850. PIA visits to the firm in March last year identified serious failings inits conduct of the review, including failures to identify its startingposition accurately and adequately verify its starting population. Westerby also failed to […]

Exam incentive to greater qualification

IFAs completing both the Financial Planning Certificate and Mortgage Advice Qualification can now go forward with a half credit towards the higher level Advanced Planning Certificate. The decision by the Chartered Insurance Institute and the Society of Financial Advisers supports the regulator&#39s wishes to see greater incentives for people to go beyond the regulatory minimum […]


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