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Pension admin costs will soar due to Euro directive

The cost of running company pension schemes looks likely to rise sharply after the implementation of the insurance mediation directive in January, says the Society of Pension Consultants.

Financial services committee chairman Mike Young says the IMD will bring a number of activities provided by third-party pension administrators under FSA regulation.

He fears the move will have huge cost implications for many pension administrators. He thinks few firms which provide pension admin services are aware of the significance of the impact of the legislation.

Young says the cost of FSA regulation will hit margins and the real impact will have to be passed on to the schemes, which may drive a number of smaller occupational schemes to consider alternative arrangements such as GPPs.

Third-party administrators need to consider how they will seek authorisation to undertake regulated activities along with how they will ensure compliance with requirements on financial reporting, capital adequacy, money laundering regulations, client money regulations and senior management systems and controls.

Young says: “I imagine that smaller firms, particularly those with no current in-house compliance experience, will struggle to meet the extra cost demands of this impending regulation.”


Panel confusion concern on FSA&#39s double meaning

The FSA&#39s decision to allow different meanings of the term independent for insurance and investment intermediaries has been slam-med by the Financial Services Consumer Panel. As things stand, investment advisers who call themselves independent must offer whole-of-market propositions whereas the FSA will allow unrestricted use of the term independent in the general insurance market as […]

Alliance & Leicester to close 46 branches

Alliance & Leicester is closing one in seven of its bank branches, resulting in the loss of 310 staff. The bank says some redundancies are inevitable although it will look to redeploy as many staff as possible. A&L says the move reflects the increasing use of telephone and internet banking by its customers.

Volatile substance

In my last article, I examined investment risk, the difference between average rates of return and volatility and, last, risk and reward. In this, my second of three articles on planning a portfolio, I will look specifically at standard deviations, including the use of more than one standard deviation, preferred investment strategy and devising investment […]

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