Consumers face a significant rise in costs as a result of the Financial Services Authority's decisio...
Consumers face a significant rise in costs as a result of the Financial Services Authority's decision to abandon the strict separation of financial advisers into those who are independent and those who are tied to one company, the creator of the rules has told the Times newspaper.
Any increase in charges will negate a government drive to force down life insurance and pension charges.
The proposed "polarisation" rules are due to be abandoned after a long campaign by banks, and the FSA believes they are anti-competitive and no longer serve a useful purpose.
Sir Mark Weinberg, chairman of St James's Place Capital, who was responsible for drawing up the original rules in the mid-1980s, says that their relaxation will inevitably increase the cost of paying for financial advice.
A British-born fund manager is under investigation in the US for losing $283 million (£195 million) on investments in Enron in a matter of weeks, continues the Times.
Al Harrison, 64, bought Enron shares on behalf of Florida's State Pension Fund as the energy company was in its final stages of collapse. He "cashed out" days before Enron made the world's largest bankruptcy filing.
Mr Harrison, born in Nottingham and educated at Cambridge, is vice-chairman of Alliance Capital, a New York investment group which managed money for Florida's $93 billion public pension fund. The fund lost a total of $334 million on Enron. It was one of the largest losses suffered by any shareholder in the collapsed Texas energy company.
Mr Harrison's trades are thought to account for $283 million of the losses; the rest was racked up by index funds and other investment managers. Alliance's contract has since been terminated by the Florida pension fund, ending a 17-year business relationship. Alliance now faces potential suits from the state of Florida.
Royal & SunAlliance, the UK insurer, is also reviewing its policy towards 270,000 policyholders with guaranteed pensions amid speculation that it could face legal action similar to the case that triggered the demise of Equitable Life, adds the Times.
The troubled group, which closed its with-profits fund to new business at the end of last year for "tactical reasons", expects to complete the review by the summer.
Credit Suisse, the Zurich-based banking group, is planning a major shake-up of its fund management business in the US and the UK, as part of a strategy to transform itself into one of the world's top three financial services companies, says this morning's Financial Times.
Jeff Peek, the former head of Merrill Lynch's fund management business who was hired by John Mack, chief executive of Credit Suisse First Boston, is conducting a root-and-branch review of the business.
It is likely to put Credit Suisse in a head-to-head competition with UBS, its Swiss rival, as well as Merrill Lynch, which lost Mr Peek's services after selecting Stan O'Neal as the likely successor to David Komansky, the US bank's chief executive.
Close Brothers also announced this morning that Rod Kent will be stepping down as group managing director in October, completing a wholesale reshuffle of senior management at the independent UK investment bank, continues the FT.
Kent, who is one of the City of London's best connected senior executives, will be succeeded after 28 years in charge by Colin Keogh, the head of Close Brothers' asset management business, who will assume the new role of group chief executive. Peter Winkworth and Stephen Hodges have been appointed group managing directors.
Airlines and insurers have attacked the Government after it emerged that ministers were attempting to block a global insurance deal with state guarantees that would keep Britain's airlines flying, says the Times.
The Treasury has signalled that it will not support proposals for an official international replacement for the UK emergency terrorism insurance scheme. which is due to be discussed today. Ministers are understood to be insisting that airlines and insurers come to a commercial settlement over mandatory terrorism cover, which was withdrawn following the September 11 attacks.
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