View more on these topics

NU pension sales drop 10% after commission cut

Norwich Union has seen pension business fall by 10 per cent since cutting commission last September.

The fall put a dmaper on generally positive results for the firm, which last year saw life and pension sales increase by 9 per cent to £2.55bn from £2.37bn in 2003 on an annual-premium equivalent basis.

For the first time, more than half of Aviva’s business came from outside the UK, with the bulk of the business coming from Europe. Sales of UK inv-estment and savings products rose by 18 per cent to £16.7bn from £14.4bn.

Inflows through the bancassurance channels rose by 17 per cent to just over £4bn. With-profits sales were one of the group’s few weak spots.

UK chief executive Gary Withers says he is confident that with-profits sales will recover in the long term once investors return to logical investment decisions.

Withers says he is adamant that the current lull in with-profits sales is an emotional res-ponse to recent problems following the 2000/02 bear market rather than a rational investment decision.

Industry with-profits bond sales have fallen from £15bn in 2000 to around £1bn last year and. Around 20 per cent of NU’s new business flows in 2003 came from withprofits.

Withers says: “The fall in with-profits sales is an emotional response and they remain a very good investment vehicle. Over time, emotions will subside and logic will reinforce that it is a valuable product and people will come back to it.”

Hornbuckle Mitchell adviser Viv Belcher says: “What has happened in the markets over the last five years has exposed the weakness of withg-profits. Life offices need to push with-profits because, other than for protection, why would you use them?”•NU cuts bonus rates, p9

Recommended

Day is dawning for commodities

Structured product provider Dawnay Day Quantum has created another issue of protected commodities accelerator, capital-protected bond linked to a basket of eight industrial metals and energy-related commodities for a four-year term.

L&G pass 100bn corporate pensions milestone

Legal & Generals corporate pensions division has announced that its funds under management has passed the 100bn milestone.The results are part of record business figures of 15.2 billion from UKand European clients as Corporate Pensions funds rose to over 103bn.L&G group director, investments Tim Breedon says: “The new managing director of our corporate pensions business […]

Derbyshire expands its mortgage services

Derbyshire Building Society is increasing its product range, becoming the latest corporate introducer to work with national broker Mortgage Force. The deal, available through all 53 of their branches and online, increases the number of mortgages approved for Derbyshire customers, benefiting those who may face difficulty getting a mortgage due to poor credit rating or […]

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 […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment