Standard Life coughs up £100m over pension sterling fund.

The venerable Scottish insurer Standard Life is going to cough up £100m following the tanking of its pension sterling fund. This was not the performance desired by independent financial advisers (IFAs), who pointed to the mention of "cash" in some brochures. Hargreaves Lansdown said simply that it wanted the money back for its clients.

It reminds me when a Fidelity Income fund was found to have invested in nil yielding tech stocks. There was a bit of a furore. The current investment conditions have really hit investment trusts and unit trusts. UK funds have been especially hit by the implosion of the British banking sector. Star fund managers have seen their reputations tarnished. The industry is trying to push corporate bond funds for investors looking for income. They represent quite a bet on future default levels to get the attractive yield.
www.searchifa.co.uk

Good corporate bonds paying 7 pct to 9 pct might be retired by companies, if they can refinance for less. Bond managers will be having another look at the issue documentation for the paper.

FSA boss Turner fails to read from government script.

The Daily Telegraph has cited comments by Lord Turner, chairman of the Financial Services Authority (FSA), which warn of possible stagflation. This could happen if the decline of sterling continued. I thought the drop in the pound was to help a renaissance in the economy. However, this happens rarely and food import prices should be shooting up soon. Discussing possible stagflation is definitely not in the government script. It would be a way of inflating away our debts but I think the pensioners in Spain would come back to Blighty to exact some terrible revenge on Gordon Brown et al.
Liam Halligan, former Channel Four economist correspondent, has been warning in the Sunday Telegraph, that we are not going to suffer deflation but increased inflation. He is pretty critical of the British government's policies to put it
mildly.
Back to the FSA, it does not seem to be resolving the spat between Standard Life and independent financial advisers (IFAs) over whether its pension sterling fund is a cash fund or not. Hargreaves Lansdown has asked the Scottish institution on behalf of its clients for the money to be returned. The pension sterling fund has taken a hit investing in mortgage-backed securities rather than cash as illustrated in some brochures.
www.searchifa.co.uk

Life companies will struggle with platforms - Skandia.

Money Marketing cites Skandia UK chief executive Brett Williams, who says that life companies will struggle with platforms. For instance, Williams believes that companies such as Standard Life will find it hard to achieve the right scale.
The Skandia UK chief executive comments there is fierce competition in the
market as shown by Friend's Provident backing down from its launch and by problems faced by Norwich Union's Lifetime.