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Year to Year: 2005

It was Standard Life chief executive Sandy Crombie who graced the front page of Money Marketing’s first edition this year and for good reasons.

Crombie received a pat on the back for handing back his £500,000 performance bonus after the tumultuous times the life insurer has seen over the 12 months previous, a move that boosted Crombie’s standing in the eyes of many.

But the following week the lead story was not such a happy one. Cardiff IFA Ethical Financial went bust, leaving investors facing losses of £900,000, including some of the firm’s clients.

January also saw the end of the professional indemnity insurance waivers thanks to the introduction of the insurance mediation directive. As many as 300 IFA firms are thought to have relied on the waivers during the PI crisis.

The Treasury’s announcement in February that it is to consult on ruling out intermediaries from the Markets in Financial Instruments directive, due to come in next year, was welcome news on this front. The directive means that from next April firms would need £500,000 in extra cover and to set aside £300,000 capital, or have a combination of these two in place. Any firm that deals with collective investments would be likely to fall under this legislation.

The face-off between the FSA and Legal & General over the fine imposed by the FSA for mortgage endowment misselling, ended in a draw early this year but with both sides claiming victory, but the FSA was ordered by the Financial Services and Markets Tribunal to cut L&G’s fine.

January saw Money Marketing on the scent of AWD’s impending deal to buy Chase de Vere Financial Solutions from the Bank of Ireland.

The month wound up with news that Zurich was facing another pension probe over selling higher-charge policies when stakeholder products could have been more suitable.

The ongoing saga of the split-cap fiasco has also spilt over into this year, with lawyers deciding to continue law suits against IFAs who sold split-capital trusts, despite the regulator’s creation of a £194m compensation fund for investors.

February saw BM Solutions kick off a campaign to name and shame lenders it believes are not giving consumers a fair deal, igniting a war of words. Meanwhile, Bates Investment Services founder Graham Bates and his sister, former managing director Helen Peace, settled their case with BIS owner The Money Portal out of court with Bates saying he was vindicated following his earlier dismissal.

But Bates popped up again on the front page in March, making a comeback as the fund manager for a range of property funds from Keydata.

Also making a comeback in 2005 is Keith Carby, former chairman and chief executive of Inter-Alliance, being appointed as executive chairman of Tenet Group’s national IFA Capital Planning UK

The year 2005 has seen IFAs hitting back at the misselling claims that have plagued the industry in recent years.

Around 180 small IFA firms have pooled funds and are consulting a top barrister to gauge whether they have a case to argue that product providers breached contracts with advisers with the marketing material used in the sale of precipice bonds, endowments, with-profits and split-capital products. The group wants to see providers take responsibility for material they say could have contributed to missales and want to know why they are held responsible for material created by them.

Then in recent weeks a high court judge ruled that marketing company Zurich IFA has to share liability with an adviser because of inaccurate marketing material and false risk-warnings on a collapsed investment product.

Legal experts are hopeful the case will open the floodgates for IFAs keen to recoup part of the compensation costs they have had to pay to the likes of endowment, precipice bonds and split-cap investors.

Aifa director general David Severn wasted little time getting stuck into issues facing the sector after starting his new role in February. Indemnity commission was one of the first areas he sunk his teeth into.

The Association of British Insurers proposed scrapping indemnity commission which Severn and Aifa have hit back at as a knee-jerk reaction to Treasury select committee criticism.

At the same time, Severn complained to the regulator that its estimates for market averages for advice in the new menu system are wrong, asking them to reconsider the figures. He asked the Office of Fair trading to review the menu system. However, Severn’s role has been cut short after he recently stepped down due to ill, being replaced by Chris Cummings.

Shepherds found itself on the front page in March after UK investors and IFAs who had put money into an offshore Shepherds’ traded life fund found themselves on unsteady ground as the US company it invested through, Mutual Benefit Corporation, faced collapse.

Not even halfway through the year and already a front-page story of fund manager swashbuckling has hit the press. Nicola Horlick’s exploits in April with armed attackers outside her Kensington home has done little to help her shake off her “superwoman” image.

But even the last few weeks, may have brought a sea change. Money Marketing reported exclusively that the Prime Minister had attacked his own regulator the FSA for being hugely inhibiting of efficient business.

Only the next week, Money Marketing revealed details of an FSA investigation visit to an IFA That anonymous IFA had finally had enough and taped the FSA officials revealing a rather cavalier attitude among some FSA staff.

As he mulls letting multi-tied firms join Aifa, is new director general of Aifa Chris Cummings, confronting a regulator that is on the back foot or a wounded and all the more dangerous animal? Time will tell.


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Neptune video: Abenomics: the impetus for Japan’s fast-track recovery?

The remarkable performance of the TOPIX over the past year has caused many sceptical equity investors to look again at the Japanese market. These returns have come despite very significant problems facing the Japanese economy. Chris Taylor, manager of the Neptune Japan Opportunities Fund, discusses these problems and whether Abenomics will be able to overcome them, enabling the market to continue to rise.

In the video, Taylor addresses the following:

• The size and speed of Japan’s unprecedented monetary policy
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