View more on these topics

ScotMut smoothing the way to new with-profits

Scottish Mutual has become the latest company looking to reinvent

with-profits with the launch of its smoothed investment bond.

Drawing on many of Ron Sandler&#39s recommendations on with-profits, the

product is ringfenced with explicit charges – an annual management

fee of 0.85 per cent and a rebatable 1.3 per cent a year for the

first five years to cover IFA commission.

A dedicated website will feature a daily smoothed price, achieved by

taking a 12 month average. Investors can choose or combine an equity

fund or a bond fund with three free switches allowed per year.

ScotMut&#39s move follows the launch of Sandler-style with-profits last

year by Scottish Widows and Scottish Equitable. It is likely to

increase the pressure on the biggest providers of traditional

with-profits products – Norwich Union, Pruden-tial, Legal &

General and Standard Life – to launch a second generation of

with-profits products.

ScotMut closed its with-profits fund to new business at the end of last year.

Head of investment products Nick Kelly says: “The smoothed investment

bond combines a unique way of smoothing out the peaks and troughs of

markets with a high degree of transparency.”

Hargreaves Lansdown pension research manager Tom McPhail says: “This

does address many of the concerns about with-profits. Explicit

charging for advice is the way that the industry is going to have to

go. I would be astonished if the other big providers were not looking

at launching similar products.”

NU spokesman Ian Beggs says: “We believe that the 90:10 structure

provides advantages to consumers and is a better deal all round. But

we are currently working on alternative options that will utilise the

100:0 structure.”


BM Solutions offers online sales tools

Specialist lender BM Solutions has launched a range of sales tools on its intermediary online service, BM Solutions Online. The tools include affordability calculators, covering buy-to-let and flexible repayments and are intended to help brokers maximise sales. Personal illustrations are available to reveal bottom line savings for clients and users are guided through the facility […]

Property funds shut until prices go down

Scottish Widows has temporarily shut its property funds to newbusiness because of concerns about the commercial property market.Widows says that the popularity of property as an asset class in thecurrent turbulent stockmarket environment is driving up prices tolevels where it is unwilling to buy.The company says it is being forced to stockpile cash and this […]

AITC backs call to retain Isa tax credit

The AITC has joined forces with five other financial organisations to urge the Chancellor to retain the equity ISA tax credit.Alongside the Pep and ISA Managers’ Association (PIMA), the Investment Management Association (IMA), the Association of Private Client Investment Managers and Stockbrokers (APICMS), Proshare and the Association of Independent Financial Advisers (AIFA), the AITC is […]

Friends challenges firms to match one-day admin

Friends Provident is throwing down the gauntlet to pensioncompetitors, saying only those able to get paperwork out to clientswithin 24 hours can claim true end-to-end processing capability.The company says IFAs can tell if a product provider&#39s claim ofstraight-through processing is correct by being able to send policydocuments to members within a day of application.It says […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment