William Kay: The steps that are needed to restore confidence in the savings industry

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The Independent Online

The next few weeks will yield vital clues about the amount of confidence people can place in savings products for years to come. The new regime at the Financial Services Authority (FSA) faces a tricky meeting with providers and brokers of split-capital investment trusts on Tuesday. The Penrose Report into Equitable Life is at last, after nearly three years, due to be published. And the saver's friend (yes, I'm joking), Gordon Brown, will unleash his latest Budget in just over a fortnight.

The FSA has taken a step towards bolstering confidence with the publication this week of the so-called menu which financial advisers will have to show consumers before doing business with them. It sets out charges and services as clearly as anyone could wish, and I believe it has a good chance of encouraging the public to ask questions and find out more about financial services.

But, as Jenne Mannion explains on page 9, the split-capital showdown will be one of the first tests of the resolve of John Tiner since he became the FSA's chief executive last September. He has already set a firm tone, but this is a case where he will want to make his mark. The split-capital investment trust managers have already shown their reluctance to help ruined investors by their curmudgeonly response to the plea for a £10m rescue fund by the Association of Investment Trust Companies. Their excuse was that they did not want to do anything that could be interpreted as admitting liability, but that is easily solved by saying as much.

The trouble seems to be that the FSA is having a hard time pinning evidence of wrongdoing on the managers. And without such evidence they will probably be reluctant to put their hands in their wallets.

Penrose is a much bigger circus, where the suspicion is that the authorities have tried to take the steam out of Equitable policyholders' case simply by letting time pass. But I am optimistic that, out of the dense legal thicket that surrounds the slow death of Equitable, we may find some clear thinking on with-profits.

Too many people who should know better have glibly dismissed with-profits bonds and policies as an out-dated relic of a more trusting and deferential age. However, there is no doubt that there is demand for financial products that offer limited exposure to the stock market, in the sense that they limit both the potential profits and losses. Precipice bonds were another, if disastrous, attempt to satisfy that demand. The initial welcome they received shows that they met a need. Although with-profits products need to be made more transparent, I am sure they have a future.

You will not be surprised to learn that I have no hot line to the Treasury that will give me an early sight of the Budget. But the Chancellor has shown a worrying degree of indecision as to whether or not he wants us to save. We are told to work longer and make provision for our own retirement. Then Mr Brown wants a limit of £1.4m on pension pots, and Isas are due to die within a few years.

The latest hint from the Treasury is that it wants to tax homes, which many people see as a cushion for their old age. Perhaps Mr Brown will let us know which way he would like us to jump.

* Abbey National, the plc, is doing itself no favours with its repeated attempts to pass itself off as Abbey, which is merely its new brand name. It certainly confused the BBC and others when it published its results this week, headlining them "Abbey results".

The fact is that it is prevented from renaming itself Abbey because there is already a property developer of that name listed on the Stock Exchange. Neither company is happy with the confusion.

The real danger is for investors who want to buy shares in either company - and Abbey National's shortcomings make it a potentially attractive takeover candidate. A good broker will point out the distinction between the two, but internet brokers' clients will have to be particularly careful.

Nice sushi party, pity about the attitude

Intelligent Finance (IF) knows how to throw a party, but it appears to be forgetting the maxim about putting the customer first.

This week the internet bank owned by HBOS held a dinner at Nobu, the upmarket Asian nosherie on London's Park Lane, to celebrate breakingeven after only three years. HBOS also owns Halifax and Bank of Scotland, which launched an account last week paying six per cent interest. There are strings attached, but you would have thought it was worth bringing to the attention of all HBOS's customers, including the 820,000 who bank with IF.

But I was staggered to be told by Martin Kelso, IF's finance director, not only that his outfit were not going to tell their customers about the new product, but that Halifax and Bank of Scotland were "nothing to do with IF".

Here is a product, described by Halifax as "a real incentive for people to start saving again", which nearly a million customers are not going to be told about because of a small-minded internal rivalry. This off-hand attitude can spread all too quickly unless it is nipped in the bud. Despite IF's self-congratulation and healthy interest rate, the average deposit fell last year. I hope that is not an omen.

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