View more on these topics

Protection firms fear offset review

The impact of a combined Treasury and HMRC review of protection offset tax rules could see £350m of commission taken out of the market, according to Aviva.

Richard Verdin, protection director at Aviva, says the current review is likely to scrap rules that allow providers with investment management businesses to offset the costs of writing protection business against investment income and protection products will become more expensive as a result.

He adds that the ability to rebroke protection business will be severely curtailed because removing the ability to offset will lead to more uniform prices across providers.

He says: “The market impact could be significant as rising prices leave less scope for rebroking, which is estimated to be around 20 to 30 per cent of new sales. The effect of this on advisers, providers and the wider economy would be significant.

“The loss of a quarter of market commission would add up to around £350m a year, with most of this concentrated in the IFA market.”

Verdin says the timing of the protection offset review and its outcome are still not entirely certain but the most likely date for any change is 2012.

Protection Review chief executive Kevin Carr agrees that the ability to rebroke business based on cost could well disappear if firms are prevented from offsetting expenses.

He says: “If a client bought a policy in the last two or three years it will not make any sense to move based just on price. If you bought more than five years ago it may make sense but the days of switching every year could be a thing of the past.”



Euro Parliament votes through new pan-European regulator

The European Parliament has approved the framework for the European Supervisory Authorities. The ESA will include a European Systemic Risk Board chaired by the head of the European Central Bank for the first five years. In a political compromise to enable expediency in setting up the framework, three years into Jean Claude Trichet successor’s tenure […]

Northern Rock to sell its mortgage portfolios to repay Govt loan

Nationalised bank Northern Rock is set to sell off some of its mortgage portfolios in an effort to pay back its £22.5bn government loan. According to a report in the FT, the bank is looking to repay around two-thirds of the loan in the next five or six years and prefers selling some of its […]


PFS Conference: Suitability letters are failing to meet standards

Law firm CMS Cameron McKenna has warned advisers that their suitability reports are failing to meet FSA standards, which could open firms up to the risk of regulatory action. Speaking at the Personal Finance Society annual conference in Coventry today, CMS Cameron McKenna partner Simon Morris said he has seen many instances where suitability reports […]

Woodford says his income duo are not depending on a double-dip to perform

Invesco Perpetual head of investments Neil Woodford says he does not need a double-dip recession in order for his £7.4bn income and £9.5bn higher-income funds to outperform. He believes that a return to recession with a double-dip is likely in the UK, claiming the outcome will be “dictated by the pace and scale of fiscal […]

Time to stop the salami slicing on tax relief

Steve Webb  – Director of Policy and External Communications As the Autumn Statement approaches, Steve Webb calls for the Government to stop tinkering with tax relief. Twice a year, in the run-up to the Spring Budget and the Autumn Statement, we face a torrent of speculation as to what changes the Chancellor might make to […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm