Money Management articles from April 2004

Money Management archives from April 2004

Heading for a McFall.
April 1, 2004... The recent Treasury report entitled 'Restoring confidence in long term savings', dealing specifically with endowment mortgages, seems somewhat inappropriately named. Thus far it has probably had the opposite effect and dented confidence badly....

Aqera changes direction: Wrap engine will power existing platforms.
April 1, 2004... Software house Aqera, which can automate valuations for legacy life and pensions products, wants to power existing platforms or portals rather than build its own wrap account. The change of strategy comes during the middle of a feasibility...

State pension reform vital :Leading think tanks call for increase to benefits.
April 1, 2004... A radical reform of THE State pension system could breathe new life into the pensions and savings industry, according to recent reports by leading think tanks. The Adam Smith Institute argues that the State pension should be doubled to...

Split capital punishment: A resolution inches closer.
April 1, 2004... 21 firms under investigation as part of the FSA's split capital investment trust inquiries have now informed the regulator whether or not they have acquiesced to its demands to expedite compensation. The firms were given a 16 March...

It S2P perfect: State second pension brings back investors.
April 1, 2004... Millions of investors might be best served by contracting back into the State Second Pension (S2P), formerly SERPS, but are not being told. As many as 12m have contracted out since the late 1980s. The then Tory Government had introduced...

Destroying confidence in long term savings: Treasury committee calls time on endowment mortgages.
April 1, 2004... The long awaited Treasury Select Committee report on endowment mortgages has provided the predicted damning critique of the UK life industry. The report, ironically entitled 'Restoring confidence in long term savings', looks like it may...

Life, but not as we know it: Trade body set for revamp.
April 1, 2004... The LIA is to undergo a complete overhaul as it attempts to reinvent itself as the leading trade body for IFAs. The changes are subject to approval at a forthcoming EGM, but should see the organisation position itself as a champion of the cause...

Cheaper mortgages offered to all?: Miles report calls for 'fairer' deals.
April 1, 2004... Mortgage lenders should be made to offer existing customers the cheaper deals that they offer to new customers, a Treasury- commissioned report has recommended. The Miles report encourages more borrowers to take up long term fixed rate...

A quick study?: Skills Council to announce IFA exams.
April 1, 2004... The Financial Services Skills Council will publish the requirements for investment and mortgage advice as well as the list of appropriate examinations this month. Under the new exams framework, candidates will be assessed on their ability...

Web wonder: Scottish Widows pensions advice.
April 1, 2004... In the run up to April next year, IFAs will have a variety of complex pensions questions that they will need answered in order to give best advice to their clients. Scottish Widows' site at www.pension-simplification.co.uk has been set up...

Watching the watchdog: Consumer's Association accused of "misselling".
April 1, 2004... The Consumer's Association (CA) has long angered IFAs with its stance on endowment mortgage misselling. There is a feeling among advisers that the association encourages policyholders to make complaints irrespective of whether their policy was...

Financial Planner of the Year Awards: Jennie Bond to host London award ceremony.
April 1, 2004... Look out for the May issue of Money Management, which will contain the case studies for the 2004 Financial Planner of the Year Awards. The awards, widely acknowledged as the best IFA awards in the industry, will be held on 14 October at...

Policyholders take ethical stance: CIS customers get their say.
April 1, 2004... Co-operative Insurance Society (CIS) is to give its 5.4m customers a say in the development of a socially responsible investment policy by allowing them to vote on the priorities for its ethical policy. Dave Smith, spokesman for the CIS,...

Website re-launch: Online upgrade for MM.
April 1, 2004... www.ftadviser.com is set to be re-launched at the end of April. The website has undergone a major upgrade to make it the most reliable and comprehensive online service for personal finance professionals. FTAdviser will be the quickest way...

SCARPS probe: FSA questions providers.
April 1, 2004... The FSA has written to a number of structured products providers requesting details of all products sold. The regulator is seeking details of the number of sales, position and degree of capital protection, as well as details of how these...

Will low cost endowments survive?
April 1, 2004... Having read your feature on low cost endowments, I too fear that, as a product class, it may not survive. The combined assault from the media, the FSA and from amateur self styled endowment bashers masquerading as consultants may well prove to...

Mortgage regulation.
April 1, 2004... With regulation for mortgage brokers imminent, the FSA has advised brokers to make an application for both direct authorisation with the FSA and, at the same time, AR status with a network. The reason for this dual application, they state, is...

Endowment mortgages.
April 1, 2004... The article on low cost endowments presented a bleak picture. The high levels of red and amber letters indicates a problem intrinsic to the product as opposed simply to the recent economic downturn. The majority of providers have placed an...

Don't see red.
April 1, 2004... I fear that the article 'Endowment mortgages - don't see red' is doing consumers a great disservice by trying to suggest that the endowment vehicle does not deserve the bad press that it has received. It has been my experience that the...

A future for pensions.
April 1, 2004... Thank you for your excellent comment column in the March 2004 edition. A developed country like the UK should be able to provide pensions mechanisms for the great majority of its citizens to save for their older age. Our history has shown...

Fair exchange?
April 1, 2004... It is 60 years since I learnt my sums, so in my dotage I may be wrong in questioning the effects of Martin Ansell's article on fair exchange of income for greater pension contributions (February issue Group pensions supplement). This may be...

Call centres.
April 1, 2004... In view of the recent news from the Norwich Union/Aviva Group I thought readers might be interested to share my recent experiences and my favoured solution, both as consumer and an IFA. I have received calls from what are now...

getting up to monkey business.
April 1, 2004... Dawnay Day Quantum (DDQ) has launched the first structured product linked to China. The DDQ Protected China Fund is a six year product that provides 70% of the growth (uncapped) in the FTSE Xinhua China 25 Index. Capital is 90% protected,...

Teetering on the precipice?: More IFAs could go under.
April 1, 2004... A number of IFAs are likely to follow RJ Temple and the David Aaron Partnership into insolvency due to 'precipice' bonds, according to the FSA and KPMG. Ros Kitley, senior manager at KPMG, said that more IFA insolvencies were likely in the...

Structured products.
April 1, 2004... I am writing in response to Graham Devile's article 'Regulatory rigour' in the February Money Management supplement on structured products page 6 which makes a number of assertions about the National Savings and Investments guaranteed equity...

A UNIQUE PRODUCT.
April 1, 2004... Equity release schemes come in two different forms: lifetime mortgages, where interest rolls up on the sum borrowed, and reversionary plans where a percentage of the property's value is sold outright. In-Retirement Services' equity release...

you can do it.
April 1, 2004... Keydata is branching out from structured products and has launched a limited property partnership in conjunction with Strategic Investments. Strategic Investments has already raised GBP2.9m and has teamed up with Keydata to raise a further...

the empire fights back.
April 1, 2004... For years, Japan was a major driving force behind the world economy. The home of technology, Japanese companies made a lot of money very quickly during the boom years of the 1980s. In fact, from the late 1960s to the end of the 1980s, apart...

Traffic light panic.
April 1, 2004... Endowment shortfalls are likely to affect up to 3.5m borrowers, according to the FSA. Most of those borrowers will have received at least one of the FSA's red, amber, or green letters informing them of what their policies are projected to...

now here's the winterthur dist' content.
April 1, 2004... Winterthur Life has unveiled its new life and pension offering. The Elite Distribution Managed funds aim to yield 25% more than the FTSE All Share each year. The life and pensions funds will each contain a mix of two thirds bonds and one third...

The post-cp 185 world.
April 1, 2004... Jupiter is listing an existing portfolio with an unconstrained investment objective on the Jersey stock exchange. The Offshore Portfolio Fund, which has the freedom to invest in hedge funds as well as unit trusts and OEICs, could become the...

POLES APART.
April 1, 2004... Polarisation is taking an unconscionable time a-dying, but with the publication of FSA Consultative Paper 04/3, the last rites loom a little larger. CP04/3 is titled 'A menu for being open with consumers'. It incorporates the feedback on the...

Policyholders must wait for 19 May: Pleas for compensation will be heard at annual meeting.
April 1, 2004... The management of Equitable Life will be asked to pay for a legal action to compensate with profits policyholders for up to 13% of the value of their policies. EMAG's decision to pursue compensation claims through the courts follows the...

Taking STOCK.
April 1, 2004... The paradox of investment is simply stated. To obtain and, even more importantly, to maintain a decent income the investor must invest whatever capital he or she has. But the very act of investing capital renders the investor liable to lose...

trawling the toisas.
April 1, 2004... TESSAs - or tax exempt special savings accounts - have been one of the success stories of the past 15 years. Since their launch over GBP53bn has been saved into these accounts according to Bank of England figures. But after Gordon Brown became...

The professionals.
April 1, 2004... The decision-making process for selecting investments for a pension in drawdown used to run something like this: the goal is to preserve the annuity purchasing power of the fund; annuity rates are determined by the 15-year gilt yield; equities...

saving tax on the family home.
April 1, 2004... Many people may think that their principal residence is exempt from capital gains tax (CGT) but in fact the sale of the family home usually only escapes liability to CGT because of a relief that applies specifically to the family home, called...

CGT - SOMETHING TO aspire to, and to avoid.
April 1, 2004... You have to make substantial gains quickly to be clobbered hard by Capital Gains Tax (CGT). Indeed the tax was introduced in 1965 to curb speculators, and even now is paid mostly by short term investors. But CGT is a 'voluntary' tax, in that...

THE KEY FINANCING PROBLEM.
April 1, 2004... Tucked away in the middle of the 225-page Pensions Bill is a brilliant clause on retirement planning. It requires the provision of facilities enabling an individual to estimate (a) the financial resources likely to be available to him after his...

One Economist's view on what is happening in the world.
April 1, 2004... Richard Duncan is an economist who worked for the World Bank and the IMF during the Asian currency crisis that started in Thailand in the early 1990s. Now based in Hong Kong he recently wrote: "The most aggressive experiment in monetary...

weathering the storm.
April 1, 2004... At some point later this year, life offices will become obliged to file financial reports on a 'realistic' basis. The smoke and mirrors that have come to characterise reporting will be expunged and - in theory - all concerned will be left with...

Penrose paves the way for legal action:More court cases likely.
April 1, 2004... Equitable Life is likely to have many more legal cases brought against it, following publication of the Penrose report. Robert Morfee, partner at law firm Clarke Willmott, said that he expected increased business as a result of the report,...

Policyholders penalised for persistence: Endowment surrender values higher than maturities.
April 1, 2004... Holding on for the final year of a 25 year with profit endowment from Friends Provident has cost policyholders GBP8,294, Money Management can reveal. The figure is the difference between what Friends Provident was paying last year on...

IFAs offer smorgasbord: Market anticipates menu of charges.
April 1, 2004... At least 1,488 IFAs have started to offer consumers a choice of payment methods since depolarisation was first proposed in 2002, according to figures compiled from IFA Promotion's (IFAP) adviser register. The revelation comes as the FSA...

1% cap starts to bite: Providers restrict group schemes.
April 1, 2004... Standard Life, Norwich Union and Prudential have denied reports that they are rebuffing approaches from small employers to set up stakeholder pensions and thus placing them at risk of breaching the law. Standard Life imposes a lower...

Skandia 20 year PP figures.
April 1, 2004... In Table 3A in the individual pensions supplement the AGRs for all of the Skandia funds have been placed in the wrong columns. The figures are correct, but the single premium AGR should be in the monthly contribution column and vice versa. The...

It's what people want!
April 1, 2004... Back in the early '80s I went on one of those cheesy organised day trips to a French hypermarket to stock up on cheap booze for Christmas, with the then princely sum of AGBP80 to spend. Not knowing a great deal about what was on offer, we...

Selling yourself.
April 1, 2004... The last few years have seen a hive of acquisition and merger activity in the IFA business sector. It has led to the setting up of organisations and specialists dedicated to helping IFAs to buy, sell and merge their businesses. Broker Exchange,...

n Manager of managers Making cents Five new multi manager products from Standard Life.
April 1, 2004... Standard Life has secured the last of the big three US-based investment consultants, Wilshire Associates, to select the underlying portfolios for its five new multi-manager products. The other two specialised consultants from the US --...

n structured growth product 121% minimum return.
April 1, 2004... Legal & General has launched its Capital Protection Plus 2, a six year structured growth product linked to the FTSE 100. It will pay a guaranteed minimum return of 21% no matter what happens to the FTSE, up to a gain of 42%. If the market...

n Emerging market funds Templeton expands onshore range.
April 1, 2004... Franklin Templeton Investments is launching a sterling-denominated emerging markets fund, as part of the expansion of its onshore range. Run by Mark Mobius, the Templeton Emerging Markets Fund will invest in undervalued stocks in Latin America,...

n fund of funds multi-tasking.
April 1, 2004... Isis is launching two new multi-manager funds this month. The Isis MM Cautious and the Isis MM Distribution funds will each have approximately 15 underlying managers in the funds. The cautious fund will be split evenly between equities...

n CPPI products keydata opens up.
April 1, 2004... Keydata has launched its first open-ended product. The UK Protected Growth Plan will use Barclay's Global Investors' (BGI) Dublin-based iFTSE 100 fund as its underlying with 70% of the fund initially being invested in the tracker. The remaining...

Don't see red.
April 1, 2004... Once the toast of the borrowing community, endowments dominated the UK mortgage market for the best part of two decades from the early 80s to the late 90s. At their peak in 1988 endowments accounted for 83% of the mortgage market. Housebuyers...

THE real under-pensioned.
April 1, 2004... In December the clamour of complaints about limits on tax relief for the pensions of top executives reached a crescendo, with moans from the CBI, top consultancies, most commentators and even the Prime Minister. Yet at the same time a report...

Interesting times for mortgages.
April 1, 2004... As house prices continue to rise beyond affordable levels for first time buyers, the temptation to take out an interest only mortgage and forego the repayment vehicle is probably difficult to resist. For many first time buyers it may seem like...

Taking the 'ow' out of endowments Reports of the life products' demise may have been greatly exaggerated.
April 1, 2004... Money Management research has revealed that the furore over endowment mortgages may have been a case of making a mis-sale out of a molehill. Millions of borrowers who took out the much maligned investment vehicles have been scared into...

TAX threat looms on dividends.
April 1, 2004... Over the past five years the Chancellor has introduced a range of measures and targeted tax reductions to support small businesses. These include the reform of capital gains tax, the introduction of taper relief, reducing the rate of...

in favour of final salary schemes.
April 1, 2004... For the average punter, pensions are boring. And even highly clued up executives of blue chip companies often have at best a hazy idea of what kind of pension they have. So in theory, the Government's proposals for pension simplification are to...

dISTRIBUTION FUNDS - BEWARE CLAIMS OF TAX ADVANTAGES.
April 1, 2004... There has been much talk in the last year about the potential havoc that will be wreaked on equity funds once the Chancellor's proposals for the abolition of the dividend tax credit come into force on 5 April 2004. Some say that it will give...

ethics in the headlines.
April 1, 2004... Daily the news from Iraq offers disturbing pictures that test the emotions of the public. These have included the rights and wrongs of military action, the relationship between the countries of the West and the oil rich Middle East, how open a...

Playing with fire Structured product commissions up.
April 1, 2004... The move by some providers to increase commission on structured products is dangerous for IFAs, according to Nvesta director Graham Devile. "The products have taken a pounding anyway -- it's just inviting criticism," he says. Although 3%...

Fund management awards Ken Clarke MP to host event.
April 1, 2004... The 14th annual Standard & Poor's fund awards in association with Money Management are fast approaching. The awards, to be hosted by Conservative MP Ken Clarke, will take place at London's Dorchester Hotel on Tuesday 2 March 2004. The...

Land of the rising fund Year end performance figures highlight Japanese resurgence.
April 1, 2004... Standard & Poor's fund performance figures show that Japan's much predicted recovery is well under way, with Framlington's Japanese Income fund emerging as the top performing UK registered fund over the calendar year 2003. As revealed in...

AGBP1.4m cap isn't just for fat cats.
April 1, 2004... The latest offering from the Government, the imaginatively entitled 'Simplifying the taxation of pensions: the Government's proposals' adds more detail but certainly looks like a very poor return on the year spent producing it. Frankly it...

Payout pain Yet more bonus cuts.
April 1, 2004... Investors hoping for good news to get them over the New Year blues will be disappointed by the latest spate of bonus announcements. Payouts on 25 year with profit endowments have slumped further, amid signs that the downward spiral in...

Live longer with less money Revised life expectancies from GAD mean annuity cuts.
April 1, 2004... Annuity rates are doomed to continue falling in 2004 as insurers factor in improvements to life expectancies shown in revised projections by both the Continuous Mortality Investigation Bureau (CMIB) and the Government Actuary's Department...

Sign of things to come Refuge pays lowest maturity yet.
April 1, 2004... Cheshire's Fred Lowe could not be more disappointed with the performance of his 25 year with profit endowment from closed life office Refuge, now owned by Royal London. When it matures on 1 March, it will pay between AGBP41,000 and AGBP43,500,...

Between a rock and a hard place Standard Life to undergo fresh audit.
April 1, 2004... Standard Life's dispute with the FSA about how its liabilities are calculated leaves questions over its future, as well as its financial strength. The FSA is to conduct a fresh audit of the life office, on the back of its recent...

Anyone for Tenet's? IFA group launches PI offering.
April 1, 2004... Tenet group has unveiled details of its own professional indemnity (PI) plan. In the scheme, the network will offer its own members up to four years of cover with excesses starting at AGBP5,000. Premiums will obviously fluctuate according to...

PPML returns for more SIPP provider back from consolidation.
April 1, 2004... PPML has completed an 18 month long overhaul of its IT to overcome a legacy of administrative problems that have caused the company to lose its position as the largest SIPP administrator to James Hay. The wholly owned subsidiary of...

Time to pay up? Equitable makes more damages offers.
April 1, 2004... Equitable Life has made settlement offers to five additional Clarke Willmott clients. Two of the offers (based on damages claims of AGBP130,000-AGBP373,000) have been accepted. The other three have been refused and trials are due to begin...

Another one bites the dust L&G to transfer trail.
April 1, 2004... IFAs have lost an ally in the fight against discount brokers swooping in and staking a claim on their trail commission. L&G, one of two fund managers that refused to change the 'agency' on investments, and therefore preserved commission...

Still falling Lettings agents reveal slipping rental yields.
April 1, 2004... Residential landlords have invested increasing amounts in buy-to-let properties as net rental yields continue their fall, according to a survey by the Association of Resi-dential Letting Agents (ARLA). The lowest net yield was in prime...

Everything changes PIN promises further costs for financial services.
April 1, 2004... Product providers, fund supermarkets and suppliers of software for IFAs will face massive upfront costs if the Government introduces a proposed database with a PIN for every person in the country. If the proposed UK population register were...

Simplification takes another scalp Open annuity branding deals cancelled over regulation.
April 1, 2004... Three white labelling deals that would have enabled insurance companies to sell annuities where any residual fund on death could be passed into the annuitant's estate have been cancelled. The arrangements to distribute the Open annuity --...

On the cliff edge More IFA failures likely.
April 1, 2004... The fallout from precipice bonds looks likely to affect more IFAs than expected. The David Aaron Partnership joins RJ Temple as the latest IFA to become insolvent due to its rising compensation bill for misselling precipice bonds. The...

Abbey shapes up and ships out Hundreds face job loss.
April 1, 2004... Abbey National has announced plans to close offices in Warrington and Derby causing the loss of hundreds of jobs. 400 telephone enquiry jobs will be transferred to India by the end of October 2004. People handling current account enquiries...

Going, going, gone.
April 1, 2004... Liverpool Victoria and Legal & General are the latest providers to scrap or raise guaranteed critical illness rates. The companies have also announced that they will no longer cover angioplasty. Liverpool Victoria no longer offers...