View more on these topics

Puzzling approach to reprojections

Although the FSA has wriggled away from all calls for a formal review of low-cost endowment sales practices, it seems to be doing everything else in its power to ensure that the public are encouraged to complain about them. For example, we are now seeing:

•Reprojections of possible maturity values based on assumed future growth rates which are significantly lower than those approved by the FSA&#39s predecessors at the time that most policies were sold.

•Reprojections based on the policy being surrendered but, from that point on, premiums continuing to maturity (which cannot happen in the real world).

•Insurers apparently banned from explaining or offering any comment on the basis of these new and severely pessimistic projections, much less any-thing about track records or financial strength.

Certain life companies are not helping matters, most notably (for us) Norwich Union, for the simple reason that they seem to think it is okay to send these reprojections directly to our clients without sending a copy to us.

So far, we have had just one complaint about a low-cost endowment (needless to say, a Norwich Union one) which, thankfully, had been sufficiently well documented at the time of sale for the complaint to be justifiably rejected.

Norwich Union&#39s reaction to our stern demand for copies of all future reprojections to be sent to us is somewhat puzzling. In short, they will not do so on a regular and automatic basis. We will have to ask them to do so on a case by case basis and such a request will be treated as a one-off. Next year, we will have to ask again. Thank you very much, NU.

Julian Stevens




McDonald Glencross – McDonald Glencross Approved EIS Fund 5

Type: Enterprise investment scheme fund Aim: Growth by investing in unquoted companies Minimum investment: Lump sum £50,000 Opening/closing dates: December 1, 2003//March 26, 2004 Charges: Initial 5%, annual up to 2.5% Commission: Initial up to 3% Tel: 020 7229 0054

£24bn moved out out of WP bonds in last five years

Up to £24bn-worth of with-profits bonds have been cashed in early or transferred over the last five years, according to research by Prudential. It reveals that since 1998, 1.5 million with-profits bonds valued at £24bn have been cashed in or transferred, with another 718,000 with-profits bond investors considering transferring out or cashing up. Pru says […]

Morgan Stanley maintains protection

Morgan Stanley has introduced a third issue of the FTSE protected growth plan, a capital-protected bond with a six-year term that could mature in year three, depending on the performance of the FTSE 100 index. The bond will return investors&#39 original capital regardless of the performance of the index, providing the investment is held until […]

Software firm sees upheaval from menu system

The menu system will cause massive upheaval among IFAs as firms struggle with the burden it will add to their compliance, says software firm Dunstan Thomas. It says the menu will add another layer of cost and complexity for IFAs. The firm has customised its flagship software component ahead of what it expects to be […]

International jurisdictions

By Neil Jones, Canada Life Investing through international providers has grown in popularity over recent years as investors seek out the benefits of gross roll-up and the wider range of investment options that can be available. When considering a recommendation for a lump sum investment, not only does the adviser have to select a suitable tax wrapper […]


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