Thursday, June 28, 2007

News From Around the Web Your Comments Are Appreciated!

Conventional Annuities Poor Value- Advisers
(from IFA Online)

Wednesday 27th June 2007: 08:30
By John Bakie

Prudential’s adviser index research also revealed that over 70% of advisers think that rates for conventional annuities will remain low and many are looking at alternatives for their clients.

The research found many financial advisers realise the limitation of conventional annuities, but figures from the ABI show around 90% of the annuity market is placed via the conventional route.

Advisers often recommend conventional annuities because they are simple for clients to understand, they are often the most viable option, they have a simple sales process and the cost of advice is relatively cheap, the survey says.

One major alternative to conventional annuities are with-profits annuities, which advisers expect to grow in popularity by up to 20% over the next year. With-profits annuities offer the potential to hedge against the impact of inflation and use a bonus system to reduce the impact of fluctuations in the investment market, according to Prudential... (rest of the story at:

Implosion Watch 2007:

Felix Salmon of Conde Nast says it isn't as bad as all that..

"In reality, credit spreads haven't widened out very much; the Bear Stearns hype seems to have been overblown; there's still huge amounts of liquidity in the loan market (if not quite as much as there was a few months ago); and the credit bubble seems on track to deflate gently rather than burst disastrously. Of course, it's always possible that things will go horribly pear-shaped from here on in. Indeed, sooner or later, something bad is bound to happen: it's a statistical inevitability. But right now, the doom-mongers are in dire need of a Tim Price skewering like this. Thank you, sir!

(By the way, talking of doom-mongers, the incomparable Nouriel Roubini is today talking about "$100 billion plus of losses for banks, financial institutions, hedge funds and investors once these CDOs and subprime mortgage backed securities are marked-to-market". $100 billion, as Michael Milken reminded us in April, is the amount that Intel stock alone fell in one day during the dot-com bust. Or, to use a present-day example, it's less than one tenth of China's foreign exchange reserves. Let's keep things in perspective here, people.)" (read the article:

What do YOU think? How is the subprime/hedge fund mess going to affect your business? What strategies will you use with your clients to mitigate the negative impact of the "implosion" of over 90 major lenders?

Email me at or post here!

Thanks and have a profitable day!

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