Equity release
Article Abstract:
Homeowners can release the equity in their house through different schemes. An investment bond income scheme entails borrowing cash from an insurance company with the value of the house acting as collateral, and buying an investment bond with the proceeds. The scheme is risky since the bond may not appreciate sufficiently in value. A roll-up loan is a loan taken out against the value of the house, and the interest is rolled up and becomes due when the debt is settled after the house is sold. The scheme is also risky since high interest rates can build up a large amount of debt in a short time. A home income plan allows the home owner to take out a mortgage on the house, which is used to buy an annuity, and the interest is paid from the annuity. A home reversion scheme entails selling the house to a company and continuing tenancy, with the house reverting to the lender upon the death of the home owner.
Publication Name: The Accountant's Magazine
Subject: Business
ISSN: 0001-4761
Year: 1991
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What's next in financial services?
Article Abstract:
The financial services industry of the UK will face a variety of challenges in 1992 as a result of the current recession. In general, the cross-selling of products and services, as well as direct marketing techniques, will be used by the financial sector to maximize sales. The introduction of a new package of fully-portable mortgage products at fixed rates of interest will be the expected response of lenders to the depressed state of the housing sector. Low levels of interest rates will prompt investors and bank depositors to look for alternative lending sources. The life insurance industry will be launching an all-out sales effort in 1992 using short- and long-term savings plans which feature reduced risk and equity-linked investment benefits. Changes in financial legislation will be expected along with the implementation of the Banking Code of Practice.
Publication Name: The Accountant's Magazine
Subject: Business
ISSN: 0001-4761
Year: 1991
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Confusing the investor with the facts
Article Abstract:
The polarization principle, the principle by which investment salespeople are required to identify themselves as being independent financial advisers offering products from the entire market of financial investment products, or as tied agents offering products from only a particular firm, has become blurred in practice since the enactment of the UK Financial Services Act in 1987. The problem is that many banks and building societies have opened up life insurance companies offering investment products which they characterize as independent subsidiaries. Industry regulators, arguing that the polarization principle has not worked, are advocating the concept of multi-tied advice, in which advisers tied to one life insurance company would be able to offer products of three or four life insurance companies.
Publication Name: The Accountant's Magazine
Subject: Business
ISSN: 0001-4761
Year: 1991
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