The year also heralded a decade of change for the life offices, with Abbey National taking over Scottish Mutual and NatWest launching a joint venture life office with Clerical Medical.
Meanwhile building society rationalisation was under way with Portsmouth Building Society merging with Cheltenham & Gloucester. When James Capel and Wardley merged its unit trust operations, JCUTM managing director Jonathan Custance had no option but to resign saying the merger left him “without a strategic or decision-making job”. MI Group chief executive Trevor Deaves also quit after a row with Cornhill over MI’s future strategy.
Fimbra saw yet another funding crisis. Chairman Gordon Downey wrote to corporate affairs minister John Redwood warning that it might have to declare insolvency because of pressure from Investors Compensation Scheme claims. The letter also suggested “a realignment of regulatory responsibilities with Fimbra, Lautro and IMRO being merged into two SROs.
SIB asked Sir Kenneth Clucas to look at “the scope, structure and organisation of a new retail SRO”, putting a question mark over Fimbra’s future. Fimbra was given a £1.5m cash injection from The Independent Market Assistance Group.
Fimbra’s submission to the review called for the strengthening of polarization, tighter regulation of tied agents, mandatory qualifications and a buyers guide form to be signed by the client and kept for compliance checks. Intermediaries should use a minimum level of 12 product providers to reinforce their independence, it suggested.
Norman Lamont’s Budget proposed the establishment of high-street share shops and reintroduced baby bonds. In IT, Misys Dataller and IBM said in June that they would launch a networking service for intermediaries in a direct challenge to Origo and Inview provider AT&T. A month later BT pulled out of talks with Origo about possible links with British Telecom insurance Services and The Exchange. By October, however, The Exchange took over the intermediary business of the AT&T Inview network in a deal worth £3m.
Lloyds Abbey Life chairman and chief executive Michael Hepher quit to join BT as group managing director. Skandia Life saw its managing director Paul Bradshaw leave. Allied Dunbar appointed former Mars UK managing director George Greener chief executive, while John Elbourne, life and pensions group director at L&G, moved to the TSB Group as chief executive of its insurance division.
Barlow Clowes chairman Peter Clowes trial rumbled throughout the year. June saw Dunsdale Securities managing director Robert Miller jailed for six years for procuring securities by deception. And the death in November of Robert Maxwell led to the disclosure that he had milked company pension funds of about £426m. MPs launched a fierce attack on the rules permitting directors to be trustee of their own company’s pension scheme.