MENU

Latest Press Releases and Comments

Here we cover all the very latest news. If you have a specific enquiry or something you’d like to find out about, please get in touch. Contact Martin Shaw at AFM via email martin@financialmutuals.org or call 0788 754 7195.

11 May 2011

Martin Shaw, CEO of the Association of Financial Mutuals (AFM) responds to Mark Hoban’s comments at the All Party Parliamentary Group for Building Societies and Financial Mutuals

 “When giving evidence, the Minister stressed that the government is neutral on ownership and was reluctant to offer a view on the sector’s virtues or on the FSA’s attempts to undermine the business model. As the "Minister for Mutuals", this lack of engagement is disconcerting and is comparable to a Minister for Pensions who is unsure on the case for retirement planning.

 “A stronger mutual sector will contribute to financial stability and help increase access to financial services. We continue to speak to the Treasury, providing evidence of the Mutual sector’s value and the danger of the FSA's approach”.

11 April 2011

Martin Shaw, CEO of the Association of Financial Mutuals, responds to the Treasury's consultation paper: A New Approach to Financial Regulation: Building a Stronger System

There is significantly more detail in the new consultation which provides much more assurance as to the way financial regulation will be conducted in future.  We are broadly supportive on the approach proposed.

In the recent past we have seen regulators respond in what we often regard to be a cavalier manner to political criticism of their contribution to the bank-inspired financial crisis.  This has resulted in sometimes poorly designed, reactive regulation, both in the UK and in Europe, which has placed new and disproportionate burdens on many firms which do not pose the same systemic risk. 

We believe that the new architecture proposed will make this less likely, so long as supervisors properly understand the markets they are regulating, and act in a manner that is balanced and proportionate, both to the likelihood and the impact of any risks they seek to address.

The received wisdom in regulation and legislation is that the shareholder owned model is superior, or else that the time spent regulating different business models in a more appropriate manner is not worthwhile.  We are grateful therefore that the coalition Government is seeking to promote diversity of ownership and seeks way to ensure that regulation is more aligned with this ambition.

We believe independent day-to-day management of the FSCS and FOS will not be compromised by drawing them more closely into the regulatory system.  We conclude that both FSCS and FOS should become subsidiaries of the FCA.  This approach does not compromise their core role, but does ensure that management of the FSCS and FOS align with the regulatory system as a whole.  We have seen numerous instances where process failure within each of FSCS and FOS has risked undermining the regulatory system, and continued lack of proper accountability will continue to pose a threat.  The benefits of seeing FSCS and FOS as subsidiaries of FCA include:

  • Joined up approach to regulation across all regulatory bodies
  • More effective information sharing and informed decision making
  • Improved early warning systems
  • Better capacity to act quickly on emerging issues
  • More visible attention to regulatory process
  • Shared commitment to work with a common but proportionate consumer protection   purpose
  • Less risk of ‘back-door regulation’
  • Cost synergies that result from shared services and single management lines. 

To speak to Martin Shaw in more detail about AFM’s response, please contact Stefanie Ives on Stefanie.Ives@mhpc.comor 0203 128 8585.

 

23 March 2011

Commentator: Martin Shaw, CEO for the Association of Financial Mutuals

Availability: Now

Input available: Confirmation that the Junior ISA will be launched in November is a welcome development as the need to build up a nest egg for milestones such as student fees or a house deposit is more vital than ever. We believe the Junior ISA will be the primary savings account for families and AFM and its member are planning for this exciting new product. However, while previously, every child would receive a Child Trust Fund and a voucher at birth, we regret that this will not happen for the Junior ISA.  As a result, poorer families in particular will be disadvantaged.

Please note: AFM has compiled comparative figures for a child reaching 18; one with a CTF and one with a Junior ISA to show the difference in monetary terms. These are available on request.

18 March 2011

Reacting to the confirmation of the Junior ISA’s launch, Martin Shaw, CEO for the Association of Financial Mutuals said

Today’s announcement that the Junior ISA will be launched in November is welcome as the need to build up a nest egg for milestones such as student fees or a house deposit are more vital than ever. We believe the Junior ISA will be the primary savings account for families and AFM and its member are planning for this exciting new product.

However, while previously, every child would receive a Child Trust Fund and a voucher at birth, we regret that this will not happen for the Junior ISA.  As a result, poorer families in particular will be disadvantaged.

Attached are comparative figures for a child reaching 18 – the scenarios concern one young adult with a CTF and one with a Junior ISA.

To speak to Martin Shaw, please contact Stefanie.Ives@mhpc.comor 0203 128 8585

01 March 2011

Martin Shaw, CEO of Association of Financial Mutuals reacts to the European Court of Justice ruling on gender

“In the short term, there will be some negative impact on the cost to the consumer but markets such as motor insurance and annuities are competitive and, over the longer term, insurers will look to develop more sophisticated techniques on which to base their assessment processes. In practice, this will mean that aspects such as health and lifestyle will become more important as insurers look to calculate risk by another means.

“The ruling provides for the removal of gender discrimination from 21 December 2012, and this is a welcome transition which will allow firms to hold current rates in the short term whilst they consider how they reprice products and begin to build new models.  So whilst it is possible that cohorts such as female drivers and male annuitants may lose out, we foresee that the overall impact will be short term and limited.” 

Martin Shaw is available for comment on the ruling today.

25 February 2011

Reacting to the FSA’s proposals for “with profits”, Martin Shaw CEO of the Association of Financial Mutuals comments

We welcome the Regulator’s willingness to listen to the industry and we are pleased that the FSA has shown some flexibility on issues that are important to the Mutuals’ sector. Flexibility on matters such as new business thresholds will benefit our members – we will, of course, continue to work with the Regulator to ensure the Mutual voice is heard on these important industry matters.

03 February 2011

Martin Shaw, Chief Executive of Association of Financial Mutuals (AFM) comments on the impact of the supplementary FSCS levy on mutual insurers

"Whilst IFAs have been very vocal in expressing concern about the impact of the supplementary FSCS levy, they did at least have the advantage of early warning.  Meanwhile mutual insurers and friendly societies have been issued demands, receiving neither notice nor explanation and being left with little time to pay." 

"One AFM member tells me they are being required to pay a supplementary levy at a rate of 15,000% of their normal annual levy. From our perspective, we feel the way the FSCS has managed this situation borders on irresponsible and raises serious questions about the FS Compensation Scheme. 

"It’s never been more crucial for the new Financial Policy Committee to make sure the Consumer Protection and Markets Authority not only regulates properly, but also increases the accountability of the compensation scheme and the Ombudsman by placing them under the control of the CPMA."

01 February 2011

Leading UK mutuals come together in new partnership

A major partnership was announced in Janaury between two of the UK’s leading mutual organisations, both of which are based in Yorkshire.

The York-based Benenden Healthcare Society and Harrogate-based Engage Mutual unveiled a new partnership to deliver and further develop the ‘Benenden Health Cash Plan’ – a health cash plan product exclusive to Benenden Healthcare members.

The partnership comes at a time when mutuals are being promoted by the Government as an important model in the provision of improved public services.

Marc Bell, Marketing & Business Strategy Director at Benenden Healthcare said: ‘We welcome a partnership with Engage Mutual enabling us to offer an improved cash plan product and deliver a better service to our members.’

‘Mutual organisations have a major role to play in the provision of public services. This link between our two organisations will be of great benefit to the network of mutuals and strengthen our mutual ethos.

Andrew Haigh, Chief Executive at Engage Mutual said: ‘We are delighted that we will be working in partnership with Benenden Healthcare, and helping push the mutual agenda to the fore. Now, more than ever, people want to do business with organisations that understand their issues and put the customer first, which is what being a mutual is all about.’

The Benenden Health Cash Plan is exclusive to members of the Benenden Healthcare Society aged 17-65 years and provides cash back for a range of everyday healthcare treatments including optical expenses, dental treatments, some complementary therapies, grants for the birth or adoption of a child, grants for overnight stays in hospital and day surgery and world-wide personal accident cover.

The partnership will bring together two well-known mutual organisations of the Yorkshire region.  Engage Mutual has supported Saint Michael’s Hospice for more than 15 years, and works to improve levels of financial capability among young people.   As sponsors of the Engage Super League since 2005, Engage Mutual has also provided help and assistance to a number of rugby league charities. Benenden Healthcare sponsor significant community events such as the York Community Pride Awards and Copmanthorpe Carnival. Benenden Healthcare also recently won ‘The Press’ ‘Large Business of the Year’ award.

Both organisations are active in the mutuals network through the Association of Financial Mutuals and Mutuo, whilst Benenden Healthcare is also a member of
Co-operatives UK.

Engage Mutual will become the provider of the Benenden Health Cash Plan, which is marketed by the Friendly Healthcare Organisation Limited, a subsidiary of The Benenden Healthcare Society Limited.  The Benenden Health Cash Plan covers over 30,000 lives and is expected to grow further in 2011.

A short film on Youtube explains the new relationship further.

engage-logo        benenden-logo

31 January 2011

Mutually Exclusive

We enter 2011 with a number of the regulatory themes we witnessed in 2010 coming closer to fruition.  If you haven’t read it already, my article from last year on “20 things to do in the next 500 days” is instructive- though as the attached work in progress gridreports, new initiatives requiring your attention are coming forward on a regular basis, whilst the number of project days left to deliver them is rapidly reducing.

Increasingly these regulatory developments are coming from a wide range of places, as evidenced by the range of recipients to which we address consultation responsesnowadays.  Our most recent response for example was to the Treasury Select Committee’s inquiry into the Retail Distribution Review.  The AFM response concludes that the current approach is unlikely to be achievable on time, and will not lead to a better market for investment products for most consumers.

On 27 January, Hector Sants, CEO of the FSA is providing oral evidence to the inquiry into corporate diversity in financial services, arranged by the All-Party Group on Financial Mutuals.  He can expect strong questioning by MPs on FSA’s approach to diversity, on its failure to take account of the mutual model, and of course on the confrontational route it has taken on Project Chrysalis.

On the same day we are running a workshop that explores the investment implications of Solvency II, in association with JP Morgan, BNP Paribas and Ernst & Young.  There is already a very high attendance for this workshop, but further registrations are very welcome- let me know if you need more information.

Best wishes, Martin

 

27 January 2011

Schoolteachers Friendly Society announces transfer of engagements with Oddfellows

The Schoolteachers Friendly Society (SFS) has today announced plans to transfer engagements with the Order of Odd Fellows Manchester Unity Friendly Society (the Oddfellows), one of the largest and oldest friendly societies in the United Kingdom.

The agreement, which is expected to be finalised on or around the 31st March 2011, is a result of upcoming Solvency II legislation. Following the transfer, the Oddfellows will have assets of over £400m and a combined membership base of over 200,000 members.

A spokesperson (PLEASE ADD) for the Schoolteachers Friendly Society commented:

“The SFS Board of Management felt that society wouldn’t be able to build up sufficient capital reserves to be able to meet this new capital requirement by the beginning of 2013 without significantly reducing the bonuses paid to its members over the next few years. In the interest of members and the future of the society, the Board of Management decided that a transfer of engagements to another society was the best option. We believe that by joining forces with a much larger mutual that the strengthened capital base will make the businesses stronger and able to take advantage of more future opportunities as they arise.”

Following the transfer to the Oddfellows, SFS will continue to operate under the Schoolteachers brand and the Schoolteachers business will continue to be managed by the SFS’s existing staff from its current office in Liverpool. The SFS will also have representation on the Oddfellows main Board and management committees.

Martin Shaw, Chief Executive at the Association of Financial Mutuals commented on the news:

“The decision taken by The School Teachers Friendly Society to transfer engagements with Oddfellows, as well as the recent news that the Communication Workers Friendly Society plans to merge with Forester Life, clearly demonstrates the mutual sector’s commitment to the best interests of its members. These arrangements follow the long tradition of mutuals working together to maintain the strength of the sector and to develop the highest standards of service to customers. Due to pressures of legislation, the decline in the life insurance industry means that many businesses, smaller firms in particular, are constantly assessing their strategy and will continue to consider similar ventures to best meet the interests of their members.”

For more information please contact:

Chief Executive of Schoolteachers Friendly Society, Steve Code on:  0151 724 1930

Chief Executive of the Independent Order of Odd Fellows Manchester Unity Friendly Society, Philip Howcroft on:  0161 832 9361

Chief Executive at the Association of Financial Mutuals, Martin Shaw on: 0788 754 7195

Notes to Editors:

On the 26th November 2010 the Board of Management of the Schoolteachers Friendly Society (the SFS) wrote to its Members recommending that they should vote in favour of a proposed transfer of engagements between the SFS and the Independent Order of Odd Fellows Manchester Unity Friendly Society (the Oddfellows).

At a Special General Meeting held on 15th January 2011, the members of the SFS voted overwhelmingly in favour of a transfer of engagements to the Oddfellows.  Approval to the transfer has been received from the Financial Services Authority.  The Oddfellows was established in 1810 as a mutual self help society, providing for workers and their families in times of need. Oddfellows is one of the largest and oldest friendly societies in the United Kingdom. It, (along with other friendly societies), laid the foundations for the welfare state. The fraternal side of their business provides social activities, care, support and non contractual benefits to circa 70,000 members through a UK-wide network of 154 branches. As well as caring for its own members, they have a tradition of support for both local and national charities. The support for both Branches and members is provided by a central office in Manchester.

Following the transfer, the Oddfellows will have assets of over £400m and a combined membership base of over 200,000 members. Both Boards believe that in joining forces the strengthened capital base will make the businesses stronger and able to take advantage of any future opportunities as they arise

Schoolteachers Friendly Society announces transfer of engagements with Oddfellows

The Schoolteachers Friendly Society (SFS) has today announced plans to transfer engagements with the Order of Odd Fellows Manchester Unity Friendly Society (the Oddfellows), one of the largest and oldest friendly societies in the United Kingdom.

The agreement, which is expected to be finalised on or around the 31st March 2011, is a result of upcoming Solvency II legislation. Following the transfer, the Oddfellows will have assets of over £400m and a combined membership base of over 200,000 members.

A spokesperson (PLEASE ADD) for the Schoolteachers Friendly Society commented:

“The SFS Board of Management felt that society wouldn’t be able to build up sufficient capital reserves to be able to meet this new capital requirement by the beginning of 2013 without significantly reducing the bonuses paid to its members over the next few years. In the interest of members and the future of the society, the Board of Management decided that a transfer of engagements to another society was the best option. We believe that by joining forces with a much larger mutual that the strengthened capital base will make the businesses stronger and able to take advantage of more future opportunities as they arise.”

Following the transfer to the Oddfellows, SFS will continue to operate under the Schoolteachers brand and the Schoolteachers business will continue to be managed by the SFS’s existing staff from its current office in Liverpool. The SFS will also have representation on the Oddfellows main Board and management committees.

Martin Shaw, Chief Executive at the Association of Financial Mutuals commented on the news:

“The decision taken by The School Teachers Friendly Society to transfer engagements with Oddfellows, as well as the recent news that the Communication Workers Friendly Society plans to merge with Forester Life, clearly demonstrates the mutual sector’s commitment to the best interests of its members. These arrangements follow the long tradition of mutuals working together to maintain the strength of the sector and to develop the highest standards of service to customers. Due to pressures of legislation, the decline in the life insurance industry means that many businesses, smaller firms in particular, are constantly assessing their strategy and will continue to consider similar ventures to best meet the interests of their members.”

For more information please contact:

Chief Executive of Schoolteachers Friendly Society, Steve Code on:  0151 724 1930

Chief Executive of the Independent Order of Odd Fellows Manchester Unity Friendly Society, Philip Howcroft on:  0161 832 9361

Chief Executive at the Association of Financial Mutuals, Martin Shaw on: 0788 754 7195

Notes to Editors:

On the 26th November 2010 the Board of Management of the Schoolteachers Friendly Society (the SFS) wrote to its Members recommending that they should vote in favour of a proposed transfer of engagements between the SFS and the Independent Order of Odd Fellows Manchester Unity Friendly Society (the Oddfellows).

At a Special General Meeting held on 15th January 2011, the members of the SFS voted overwhelmingly in favour of a transfer of engagements to the Oddfellows.  Approval to the transfer has been received from the Financial Services Authority.  The Oddfellows was established in 1810 as a mutual self help society, providing for workers and their families in times of need. Oddfellows is one of the largest and oldest friendly societies in the United Kingdom. It, (along with other friendly societies), laid the foundations for the welfare state. The fraternal side of their business provides social activities, care, support and non contractual benefits to circa 70,000 members through a UK-wide network of 154 branches. As well as caring for its own members, they have a tradition of support for both local and national charities. The support for both Branches and members is provided by a central office in Manchester.

Following the transfer, the Oddfellows will have assets of over £400m and a combined membership base of over 200,000 members. Both Boards believe that in joining forces the strengthened capital base will make the businesses stronger and able to take advantage of any future opportunities as they arise