Personal Finance: M&S aims to remove sleaze from pensions

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THERE is always a hidden ingredient in any financial deal where the outcome is the least bit uncertain. Trust.

So it is not surprising that M&S, one of the best regarded names in the high street, is pushing further into financial services by planning to sell pensions and life insurance.

Its first move was to offer customers in-house credit cards. Then came personal loans, and then unit trusts and Peps.

Compared with other unit trusts the performance has not been sparkling. But sparkling peformance is often at the expense of a risky ride. And M&S was trying to widen the appeal of investment in shares beyond those people who feel comfortable talking to stockbrokers and browsing through the newspaper share columns.

They are probably quite comfortable with the cautious approach taken by M&S.

But managing money is only one aspect of being a provider of pensions and endowments. Many companies seem to concentrate their energies on selling.

That is the root of much of the mucky reputation that has attached itself to pensions and life insurance.

The latest scandal over silver-tongued sales staff persuading people to abandon company pensions for a commission-loaded personal pension has merely highlighted the darker side of this world where salespeople have to sell to eat.

M&S has said that their sales staff will live by salary alone. And that must be good news. The M&S way will test the hoary old adage that insurance is sold and not bought. It faces the challenge of persuading its customers to seek out the pensions advisers and sign up with enthusiasm.

Complex pensions and life insurance may be more susceptible to the M&S touch than pure investment, as counselling and advice are as important as the product itself. And M&S's high standards of service and training might just be enough of a crack to open a new market for pensions in the high street.

Equitable Life, the pensions specialist that is providing M&S with systems and helping with the training for the first couple of years, believes that it will learn useful lessons from working alongside M&S, as well as imparting a few tricks of the trade.

If M&S can take some of the sleaze out of pensions selling and show that professional standards can work when it comes to selling ordinary people modest pensions, then the whole industry stands to gain.

But M&S should not be complacent about getting the investment and regulation side right as well.

THE REPORT on mortgage valuations compiled by the Monopolies and Mergers Commission was due to be sent to the Government this weekend.

It examines the muddle surrounding mortgage valuations that are paid for by prospective home buyers but are prepared for the benefit of the lender.

The building societies and banks choose the valuer - either from an in-house team or a panel - and the buyer pays.

Home buyers can be lured into a false sense of security by a valuation that is comfortably above the price they are prepared to pay, and not bother to get a survey done for themselves to probe the property's darker secrets.

Most lenders offer an extended valuation called a home buyer report, which costs about pounds 260 compared with pounds 140 for the simple survey.

But who is the valuer's client in these cases?

The confusion is dangerous. Lenders are, of course, entitled to check that their money is secured on sound foundations.

And the borrower will have to pay in some way, as it would hardly be fair to spread the cost across all society members.

But this should be represented to the buyer as a cheap, slimline service. And the buyer should be encouraged to go elsewhere for independent advice on the property's fabric. Valuers might then compete for this business rather than see it wrapped up by the lenders.