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Pru and NU slam WP claims

Actuary AKG’s claims that the with-profits is fatally wounded and advisers will struggle to sell the product have been shot down by Prudential and Norwich Union.

AKG say surrenders are continuing because with-profits have become “toxic words”. But Prudential head of investments Andy Brown says this is nonsense and AKG is generalising across the board. He says Pru’s with-profits bond sales have risen by 29 per cent in the first nine months of the year.

NU senior actuary David Riddington says the group’s with-profits bond sales have more than doubled to £552m in the first nine months compared with last year.

AKG communications director Guy Vanner says: “It is so difficult for advisers to sell with-profits because it has such a bad name. Even if the market improves, it is so tainted that people do not want to recommend it. It has not got the ability to come back or ever be like it was.”

Brown says: “The report is effectively tarring all with-profits products with the same brush. I would not say that the surrender rate is any different from the surrender rate we get on normal bonds.”

Riddington says: “We believe that there is a place for with-profits although there will not be anything like as big a market as there was five or 10 years ago. I think AKG’s conclusion is very generalised.”

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