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Post by Carla Main on Apr 29, 2012 7:42:07 GMT 4
Firms selling pension and life insurance products must reduce the estimates of returns they use to market them by at least 0.5 percent, the U.K. financial services regulator said yesterday.
The London-based Financial Services Authority said firms must reduce average estimates of a 7 percent rate of return for investment products that are a mix of equities and bonds to between 5.5 percent and 6.5 percent, based on the results of a study by PricewaterhouseCoopers LLP. The projected returns are “reasonable central estimates over a 10-15 year time period,†the report said.
PwC carried out the last review of so-called projection rates in 2007, keeping them steady about a year before the collapse of Lehman Brothers Holdings Inc. and the start of a financial crisis that would plunge many Western countries into recession.
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