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Review of 2004: Offshore markets

For the first six months of 2004, the offshore market was dominated by allegations of misselling against Towry Law International.

The allegations concerned the sale of two hedge funds for which TLI agreed to pay compensation in August – geared with-profits bonds and Circus Capital’s protected growth fund. Disgruntled investors formed a global action group in July and hired London lawyers Class Law to take legal action in the UK against TLI and its present and former parent companies HHG and AMP. On July 9, TLI closed to new business, blaming “difficult market conditions”.

One issue that seemed to have been resolved in May was the European Union Savings Tax Directive. A compromise was agreed after lengthy negotiations to allow both Switzerland and EU member Luxemburg to preserve their banking secrecy provisions. This did not prevent the EU announcing in July that the directive would start on July 1, 2005 rather than the previously scheduled start date of January 1, 2005.

The delay was caused by the fact that Switzerland was unlikely to pass the necessary legislation in time. Observers are sceptical as to whether all 25 EU members and 13 non-EU countries will even be able to meet the revised start date.

One piece of legislation that has been implemented is the relaxation of the rules on how offshore funds gain distributor status. In the past few months, asset managers, including SG Asset Management, Merrill Lynch and Fidelity, have been bringing Luxemburg funds into the UK.

The offshore life sector ended the year in better spirits. In March, SG Life became the latest insurer to close to new business while many others have retrenched. But at the end of the year, Standard Life and Legal & General revealed that they are carrying out feasibility studies into establishing offshore operations while Axa and Prudential have been setting up specialist offshore salesforces for the UK.

Insurers also celebrated the news that certain trusts will be unaffected by the pre-owned assets tax that will begin on April 6, 2005.


Review of 2004: Fund managers

The year has seen the usual moves among fund managers, with one of the highest-profile movers being Clive Beagles, who quit as manager of the Newton higher-income fund in March to join JO Hambro Capital Management’s new UK equity income fund.


Pensions Regulator names chairmanFormer head of Marks & Spencer pensions trustees David Norgrove has been made chairman of the new Pensions Regulator. Norgrove, who has held positions at the Treasury and was Margaret Thatcher’s private secretary, will start his new role in January and his first task will be to select the regulator’s non-executive board.

Fidelity will not enter child trust fund market

Fidelity Investments has decided not to enter the child trust funds market at this time.It says this is because its latest feedback indicates demand for CTFs among IFAs and its investor-base is likely to be limited at the moment.But it will continue to monitor the progress of CTFs over the coming year.Managing director Richard Wastcoat […]


The introduction of the child trust fund has come at an opportune time for the family of one woodworker.

Why your clients need some tough love

In any relationship that matters, professional or personal, you should be upfront with someone if you think they’re making a decision or doing something they might later regret. Being honest with someone and having their best interests at heart, however hard the message, is key to building trust in any relationship. So how does this […]


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