Some snippets of news you may have missed over the last week
Skandia
Skandia is looking to launch a multi-manager Alternative Investment fund. The fund will include water, infrastructure, precious metals, currency, soft commodities and timber funds, amongst others. Skandia said: ‘Despite recent volatility in markets, investors are looking for something new and innovative to invest in. The fund will be available from June 23 with an initial charge of 5% and an annual total expense ratio of 2.45%.
Global environmental index
Impax has joined forces with FTSE to launch the FTSE Environmental Opportunities All-Share Index. It will be made up of 450 constituents from the sectors of alternative energy and energy efficiency, water treatment and pollution control, and waste technologies and resource management. To be included eligible for inclusion, constituents, must demonstrate that a minimum of 20% of their business comes from environmental markets or technologies.
Unions ask for review of pension buy-outs
The Trades Union Congress is concerned about unscrupulous companies buying out company pension schemes. They are concerned about the risk to peoples’ pensions from poorly funded buyouts. The buyout market is expected to exceed £10 billion in 2008. At least 10% of FTSE 100 pension schemes are considering opportunities to buy out some or all of their pension liabilities this year. Companies are increasingly keen to offload the responsibility of covering their pension liabilities, because rises in life expectancy have made it difficult for firms to accurately predict how much these schemes will cost them in the future.
3.5% rise in retail sales
Retail shares gained momentum last week after a 3.5% rise in UK retail sales during May. The rise contrasted sharply with a number of gloomy economic indicators saying house prices could fall up to 9% over the next year. The jump in retail spending could also make interest rate rises more likely.
Level annuity rates rise
There has been a dramatic improvement in level annuity rates over the first half of 2008, but those looking to inflation-proof retirement income have not been so fortunate. Alexander Forbes Annuity Bureau latest rates showed that a 60-year-old man retiring on the best level annuity rate today can expect to receive over £7,000 more in retirement income during the next 20 years than would have been possible had he retired in January.
Rayner Spencer Mills to highlight 3rd way annuities
Consultancy firm Rayner Spencer Mills is searching for funding from product providers to provide impartial, free information on third way annuity products to advisers. The firm, which already provides information on its site therightwrap.co.uk, is branching out into third way annuities in a bid to address confusion over the different offerings.
E&Y: Flexible retirement needs ‘super advisers’
Ernst & Young has completed a study which suggests that the relatively recent trend for the affluent to take early retirement, or to opt for semi-retirement while working on their own terms, means they have complex financial needs only ‘super-advisers’ are equipped to deal with. ‘Even the most qualified of professional independent financial advisers will not have the breadth of experience or the qualifications required to assist with all these areas,’ the report says. They claim a ‘new breed’ of firm needs to emerge, capable of dealing with a wider range of issues, which will include them acting as lifestyle counsellors, tax and legal experts, debt management advisers as well as investment management specialists.
Commercial property
The outlook for commercial property has worsened significantly in the second quarter of the year. The downward trend pours cold water on fund manager predictions that the market will hit a floor in the latter half of 2008, said industry group Investment Property Forum (IPF). Consensus forecasts also suggested that rental and capital value growth will remain negative well into 2009.
Ascentric cuts prices
Wrap provider Ascentric is to cut its prices to attract clients with assets of £60,000 or more. They will reduce their minimum charge of £300 to £150 from 1 July, meaning the effective threshold for client assets has been lowered from £120,000 to £60,000. Clients with assets of £60,000 or above on the platform will now be charged at a rate of 0.25% of assets, a rate that lowers to 0.1% for clients with £1 million or more.
Bank of England Governor
Mervyn King, the governor of the Bank of England has said the official inflation rate is likely to top 4% before the end of the year. This was admitted in a letter to the chancellor, in which he explains why inflation has risen above the Government’s 3% maximum.
Alliance Trust
Alliance Trust Savings has published a webcast and bulletin to explain to advisers the pros and cons that should be considered when looking at investing in commercial property through a Sipp. The latest pensions bulletin is available via: www.alliancetrust.co.uk/adviser.
