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Selestia chief says IFAs have no duty to sell WP

Selestia managing director Brett Williams has hit out at Prudential UK chief executive Mark Wood&#39s stance on with-profits, saying his comments stem from a vested interest.

Wood criticised Hargreaves Lansdown at a Money Marketing round table on with-profits last month, saying its decision not to offer with-profits bonds was a “dereliction of duty”.

But Williams says this is wrong, pointing out that IFAs have no duty to sell “life offices&#39 old-fashioned products” as their duty lies with their clients.

Writing in MM this week, Williams says in an increasingly litigious world, clients must understand the risks they take with any investment decision. However, he does not believe it is possible to assess with-profits risk due to the opacity and discretionary nature of the product.

He also says that smoothing can only work against today&#39s investors although it did work for investors in the past when reserves were large.

Williams says: “I know what I would call a &#39dereliction of duty&#39. It is life offices encouraging clients to invest in something which is opaque, where there is a massive potential conflict of interest between the decision makers and investors and where asset allocation has been driven by the needs of the decision makers.”


&#39IFA networks will lose market share to banks&#39

Squeezing margins will force IFA networks to move towards multi-ties following depolarisation, losing market share to highstreet banks in the process, according to John Scott & Partners chief executive Toby Strauss. He told the MM round table that depolarisation would likely have a significant impact on the IFA sector. Strauss, who until he joined JS&P […]

Widows urges caution on financial strength

Scottish Widows is advising caution when comparing the financial strength of its competitors because of the different reporting measures that life offices are using. Widows says it has arguably the strongest with-profits fund of the major life offices but warns IFAs to distinguish between life offices using ABI and FSA reporting protocols. Widows&#39 WP fund […]

Brodie warns FSA to keep its eye on big listed firms

The FSA needs to spend more time and resources monitoring the activities of the listed IFAs according to Master Adviser director Doug Brodie, who warned that a Mack truck may be heading the regulator&#39s way without it even being aware. Brodie, one of Sesame&#39s biggest member firms, told FSA managing director David Kenmir that the […]

Jefferson joins Henderson

First State head of UK and European retail sales Phil Jefferson is joining Henderson Global Investors in a similar role. He will be reporting to UK and Asia managing director Mike Clare.The position has been vacant since Simon Ellis departed for Axa Investment Managers at the beginning of the year.


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