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Pru chief Bloomer sets out 401(k) plan to MPs

Prudential chief executive Jonathan Bloomer has submitted plans for an American-style 401(k) savings product to the Treasury select committee in a bid to encourage more people to save for retirement.

Speaking at a committee meeting this week, which was also attended by Aviva chief executive Richard Harvey, Legal & General chief executive David Prosser and Standard Life chief executive Sandy Crombie, Bloomer said he feels that customers need a flexible vehicle which does not lock money away and allows them to feed savings into a pension.

He agreed that it could operate in a similar way to the Investment Management Association&#39s suggestion of a “super” 401(k) concept offering a liquid savings account.

Bloomer also said that he would prefer consumers to pay fees for financial advice but consumers are not willing to pay fees.

L&G chief Prosser reiterated his stance on the 1 per cent charge cap, saying he continues to believe that the cap would be viable if simplified distribution is achieved.

The committee asked the panel to commit to a summary box along similar lines to the idea for credit card companies highlighting charges and giving an indication of risk.

Bloomer says: “We have put forward something that would start people off in an Isa that they could then use as a portal to a pension but would allow them to be flexible.”


Outside edge – John Ellis

The FSA will be aware that, in our comments on CP121, we advanced the view that the initial disclosure at the outset of the advice process should contain some generalised paragraphs on the way in which advice, order taking and arranging is paid for. Subsequently, of course, Aifa and product providers developed the concept which […]

Consumers&#39 Association appoints new chief executive

The Consumers&#39 Association has announced the appointment of Peter Vicary-Smith as its new chief executive. Vicary-Smith has been commercial director at Cancer Research UK since 2002 and was previously director of fundraising and communications at Imperial Cancer Research Fund from 1996. He will join the CA at the end of August. The appointment comes after […]

Age Concern could set up a national IFA network

Age Concern is considering a plan to launch a national network of IFAs to service the retirement market for financial services. The charity is believed to be preparing a business plan that will be considered at its June board meeting, where a decision will be made whether to go ahead with a national advisory presence. […]

Savings on bond transfers

The personal investment and pension markets are now more difficult places in which to be an adviser. However, it is important that you do not forget the enormous opportunities that still exist for your clients. Some of your clients, who have existing single-premium insurance bonds, will be dissatisfied with the opportunities for future returns offered […]


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