View more on these topics

Product Matters

It seems the Pru is trying to tempt investors out of cash and back into with-profits-style investments with the launch of the PruFund investment plan.

Now, I respect Pru as a financial institution. Indeed, it is one of the few with a good level of financial strength behind it. But on this occasion, I must question its sense of timing and lack of sensitivity to existing clients.

The plan looks a good offering – 5 per cent expected growth rate, a smoothing formula to reduce volatility, transparency and no market value reductions. But there are a few things I must question.

First, Pru labels the product: “A plan aimed at revitalising the lump-sum, long-term savings market.” Is this a crusade to turn investors&#39 £s into ££££s or a cynical ploy to lure them into a product that may not be suitable, with high back-end charges?

Second, it boasts: “Say goodbye to MVRs, annual and final bonuses.” A wonderful marketing ploy to attract new investors or an almighty kick in the teeth to existing ones?

Third, it says: “Our aim is to reheat investors&#39 cold feet.” Or should this be a warning that investors should not get their fingers burnt?

The Pru makes a very bold statement in its literature that investors hold £107bn excess cash on deposit and says: “We want to give lump sums the potential to earn a decent return rather than sit on deposit.” But many people hold money on deposit for very good reasons, for example, emergency funds or to pay for a deposit on a house. Or maybe the investor in question has an extremely low-risk profile and, hence, a high allocation to cash.

Matthew Woodbridge is bond & VCT manager at Chelsea Financial Services


Pru in £1.5m push for smoothed plan

Prudential is launching a £1.5m marketing campaign to convince consumers to switch to its smoothed investment plan rather than keeping their money in cash. The firm says its PruFund investment plan – first revealed in Money Marketing earlier this month – will target the £107bn which Prudential bel-ieves consumers have tucked away in deposit accounts. […]

Direct Line pull out of mortgage market until M-day

Royal Bank of Scotland subsidiary Direct Line is the first lender to pull out of the mortgage market temporarily in the run up to mortgage regulation. The FSA requires lenders to lay out &#39key facts information&#39 uniformly so that easy comparisons between lenders can be made. This will come into effect on M-day (October 31) […]

Vive la revolution

Having already expressed a view on the proposed merger of the LIA and Sofa from the perspective of being an LIA member, I feel that, as a full member of Sofa, a comment is needed with regard to what I consider to be the disgrace concerning voting rights. If we were flies on the wall, […]

Cancer charity says firms misleading public on PMI

Private medical insurance providers are misleading consumers about the extent of cancer care they offer and could face a wave of misselling claims, says a leading cancer charity. Charity Cancer BACUP wants clearer information from providers on PMI policies to make consumers aware that the policy they are buying may not cover them throughout the […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment