Moneysupermarket dropped from Google Top Position is a post from: Insiders View ---- Track your Twitter social media campaigns using Raven Tools

Solon-based Insurance.com has been sold to a California Internet marketing company, which will shut down the company’s Solon office and will eliminate 144 positions over the next year.

See more news and financial information via Google Finance: QNST

Insurance.com Sells for $35.6 Million Dollars is a post from: Insiders View ---- Track your Twitter social media campaigns using Raven Tools

Google launched their credit card comparison service in February 2010. They’re now improving it and promoting it via their Google Comparison Ads.This new placement, below the standard three sponsored links will likely get significant clicks. (You may have also noticed that the background colour has changed to pink (but that’s another story!)).

Moneysupermarket, Moneyexpert and CapitalOne are going to be the ones most likely to suffer from this as they’ve just moved down a position. Once you incorporate the universal search features for these SERPS, you need to be really aggressive to get the clicks.

So, to compete with these guys at the top (Google), you need to

• Spend lots on Adwords
• Be an authority site so that you CTR is high enough (cf. above and below)
• Have excellent SEO
• Linkbuild without getting penalised
• Dominate the SERPS by featuring in Google News
• Be part of the Google Comparison Program
• Make sure you’re top of the SERPS for some of the autosuggest terms

Google Pushes Credit Card Comparison is a post from: Insiders View ---- Track your Twitter social media campaigns using Raven Tools

Credit is the provision of resources (such as granting a loan) by one party to another party where that second party does not reimburse the first party immediately, thereby generating a debt, and instead arranges either to repay or return those resources (or material(s) of equal value) at a later date. It is any form of deferred payment. The first party is called a creditor, also known as a lender, while the second party is called a debtor, also known as a borrower.

History of Money and Credit

Credit means many thinks to different people. However, at its core, it hasn’t changed much since the first lending systems began. These lending systems started on the basis of barter (Metals objects were introduced as money around 5000 B.C.). Before the concept of money being an ‘object itself’, exchanges were done through the medium of barter. Bartering relies on a ‘coincidence of wants’. These wants are a simple method for two parties to get what they want.
Both parties will take a risk:

• - Not being able to pay back the money (and suffering a consequence)
• - Not being able to retrieve the loan

Both parties will be rewarded:

• - Money now (when it’s not available)
• - Money later, in a larger relative quantity

This will not change and the concept of the credit system will remain the same. What will dramatically change is the way in which credit is transacted, the vertical layers above credit and how much easier it will be to get credit

Effects on Credit

The latest financial crisis has caused a drop in lending from many banks. After the various bailouts, one of the key establishments, RBS, saw a drop in lending of 3% last year. Even though pressure from the government (to increase lending) is strong, the company, which is 80% owned by the British public is cautious about how much to lend and to whom. Capital One are trying to make credit clearer.

Banks will always lend to those who are low risk. This allows banks to lend large sums of money to people/companies/institution where there is little risk of default of non-payment. However, whilst they are still acting as a profit-making business, they will continue to operate in a profit making manner. (Some argue this is a meritocracy).

The Psychology of Lending, Markets and Credit

Humans, even though they think they are unique, behave in a fairly predictable way. Dan Ariely’s seminal work “Predictably Irrational: The Hidden Forces That Shape Our Decisions” describes the ways in which humans do not act rationally.

One example from the work is the concept of The Fallacy of Supply and Demand. Consumers will purchase based on value, quantity or availability. What influences their decisions will not necessarily be what is the logical choice but more often whether they are subjected to marketing tactics such as anchoring or comparative product pricing.

John Nash’s Game Theory does not play a role in many of these examples as the lenders and borrowers do not act rationally. They don’t always know the full state of the game and they are not necessarily “playing the right moves” according to logic.

Lenders will continue to lend. Borrowers will continue to borrow. However, there will always be a risk (even though this can be significantly reduced as we will see with Social Lending)

What’s Changing – Microcredits

The world is starting to experiment with a new style of lending. This style of lending is dramatically changing the landscape of those in poverty. Microcredit is the extension of very small loans (microloans) to those in poverty designed to spur entrepreneurship.

Reminiscent of the Irish Loan Funds of the 18th and 19th Centuries, the Grameen Bank of Bangladesh initiated microloans to ‘micro-companies’ who saw a huge success in the viability of their businesses. Many are trying to recreate this success in other poverty stricken areas of the world.

The Cutting Edge – Philanthropy

Lending very large sums of money is normally handled by institutions like the International Monetary Fund. The IMF is the the intergovernmental organization that oversees the global financial system by following the macroeconomic policies of its member countries, in particular those with an impact on exchange rate and the balance of payments.

Lending to large institutions or countries is now starting to happen by the super wealthy. The ‘Giving Pledge’ is an effort to invite the world’s wealthiest individuals and families in America to commit to giving half of their wealth to philanthropy.

The Giving Pledge was started in June, 2010by US Billionaires Warren Buffet and Bill Gates. The list of donors (well in to the fifties within its first month) has seen pledges from the likes of George Lucas, David Rockefeller and Michael Bloomberg.

Social Lending – Is this the future?

Social Lending or Peer to Peer (P2P) Lending is the name given to a certain breed of financial transaction (primarily lending & borrowing, though other more complicated transactions can be facilitated) which occurs directly between individuals (“peers”) without the intermediation/participation of a traditional financial institution.

Ahead of its time was Kiva who have facilitated over $100 million in loans since November 2009. Kiva’s mission is to connect people, through lending, for the sake of alleviating poverty. Kiva empowers individuals to lend to an entrepreneur across the globe. By combining microfinance with the internet, Kiva is creating a global community of people connected through lending.

The future is likely to see and explosion of social lending programs where the risk of lending is spread across many lenders and many borrowers. Companies such as wepay.com are only starting to get in to this new market however, some of the major media corporations are also known to be interested.

Microsoft and more importantly Google are looking at the financial space with the latter beginning to look at comparisons services for financial products. Are we going to see the Goliath of Google starting to get in to this game? They certainly have the capital, the trust of the public and it fits in line with their mantra of ‘do no evil’.

This article was sponsored by Capital One as part of their ‘Credit Made Clearer’ initiative, helping people dispel the myths and understand the jargon concerning credit and finance. Find out more at http://www.capitalone.co.uk/creditmadeclearer.

Lending, Borrowing, The Future of Credit is a post from: Insiders View ---- Track your Twitter social media campaigns using Raven Tools

Martin Lewis’ latest blog entry tells us that the site has now hit in excess of 10 Million unique visitors per month. This is an astonishing success for one of the UK’s most popular websites. However, they’ve also got a new trick up their sleeve…

According to their forum, MSE are about to integrate Skimlinks – an affiliate tool that transforms links in to affiliate links (which earn the publisher money). This is a fantastic way to increase revenues on massive user generated content sites like MoneySavingExpert.

MoneySavingExpert Increases Userbase and Earnings Potential is a post from: Insiders View ---- Track your Twitter social media campaigns using Raven Tools

A small proportion of this income is donated to charity; of this, two thirds is donated to the MSE Charity and the rest is donated to five other nominated charities by members
Source: Wiki

MoneySavingExpert and Martin Lewis have always kept quiet about the financial aspects of the company however, the charity accounts are available.The charity accounts can be found here whilst there are a few interesting facts:

A Family Run Charity Business

The accounts show Martin Lewis paid Mr S Lewis, the father of Mr S Lewis £30,000 during the eyar as payment for duties as operational manager. Apparently, Martin’s uncle is also employed as the accountant.

Rumours

We get many, many tips about Martin Lewis and MoneySavingExpert on this site. Should we post them? Do you want to see some facts posted? Let us know in the comments or get in touch if you’ve got a scoop.

Martin Lewis’ Money Saving Expert Charity is a post from: Insiders View ---- Track your Twitter social media campaigns using Raven Tools

Moneyextra was recording an operating loss of £1m on £3m revenues. The initial price of one pound comes with a plan to invest £1m over the coming year to pay off debts and increase growth.

Fairpoint Group now own MoneyExtra, ClearStart and the most well known, Debt Free Direct

The income and expenditure review we undertake with customers gives us a clear insight into where customers can reduce their bills and the addition of Moneyextra to the group provides us with a clear way of delivering savings to customers on a range of product and services.
Chris Moat, CEO of Fairpoint

This is an exciting deal for Moneyextra and our team. The natural synergies and shared market knowledge between the two companies will enable us to help more consumers improve their finances and for the group to compete on a profitable footing at a time when the price comparison market is commoditising.
Simon Taylor, Moneyextra chairman

MoneyExtra Sold for 1 Pound is a post from: Insiders View ---- Track your Twitter social media campaigns using Raven Tools

The insurance comparison market has always been very competitive and any opportunities for cross-sell are widely sought after. For those who missed the last Go Compare ad, here it is in also it beach glory (perhaps Gio has been on a cruise!).

Go Compare Cruises at Gocompare.com is a post from: Insiders View ---- Track your Twitter social media campaigns using Raven Tools

This will be introduced as of January 4th 2011. Current estimates of IPT are £2.3 Billion in tax per year.

Insurance Premium Tax IPT to Rise to 6% Budget 2010 is a post from: Insiders View ---- Track your Twitter social media campaigns using Raven Tools

So we move forward into 2010 and the Court of Appeal held in March. Due to the circumstances that prevailed Insurancewide had no legal representation at the hearing and, unfortunately, neither was I able to attend court and, therefore, I am unable to provide testimony as to the drama that may have been enacted during the course of those proceedings. Nevertheless, the decision announced on 22nd April is dramatic enough in that the three Judges each found in favour of the Respondents in their unanimous dismissal of the appeal by HMRC.

In summing up the Judges set out what they saw as the key principles in the case, which included the following:-

“Whether or not a person is an insurance broker or an insurance agent, within Article 13(B) depends on what they do.”

“It is an essential characteristic of an insurance broker or an insurance agent, within Article 13B(a), that they are engaged in the business of putting insurance companies in touch with potential clients or, more generally, acting as intermediaries between insurance companies and clients or potential clients.”

And in deliberating on whether those principles had been met the judges found in favour of both Insurancewide and Trader Media, thus:-

…..It is sufficient that they were providing services characteristic of an insurance broker or agent, and which were vital to the process of introducing those seeking insurance with insurers, even if they were only part of a chain of such persons…..

I sense a strange feeling of déjà vu in reading these conclusions – but wait isn’t that exactly what HMRC say within their own internal manuals on the matter of insurance intermediary services – as highlighted in the following extracts.

“VATINS5205 – Services of an insurance intermediary: Insurance brokers and insurance agents: General
There is no definition of either insurance broker or insurance agent within UK or EC VAT law. Whereas the profession of an insurance broker is well recognised, however, this is not so true of an insurance agent and this can sometimes cause problems.

For the purposes of the VAT exemption we recognise an insurance agent as anyone who provides insurance related services in an intermediary capacity.”

“VATINS1310 – General Introduction and the law: Legal Notes to Group 2:
Legal Note 1: Services of an Insurance Intermediary

1 For the purposes of item 4 services are services of an insurance intermediary if they fall within any of the following paragraphs –

a. the bringing together, with a view to the insurance or reinsurance of risks, of -

(i) persons who are or may be seeking insurance or reinsurance, and
(ii) persons who provide insurance or reinsurance; …………… “

For the sake of brevity (ha! ha!), I have included only the relevant paragraph above but the other 3 can be seen by viewing the documents online here

“VATINS1320 – General Introduction and the law: Legal Notes to Group 2:
Legal Note 2: Acting in a intermediary capacity

2 For the purposes of item 4 an insurance broker or insurance agent is acting “in an intermediary capacity” wherever he is acting as an intermediary, or one of the intermediaries, between -

1. a person who provides insurance or reinsurance and
2. a person who is or may be seeking insurance or reinsurance or is an insured person.”

Given the correlation between the findings of the courts and HMRC’s own guidance notes on the matter of Insurance Intermediary Services and also given that, within the general guidance on their website, HMRC state that they are committed to “resolve disputes by exploring all reasonable possibilities of settlement locally”, it is extraordinary that this matter should even have got as far as Tribunal let alone the High Court and subsequently to the Court of Appeal. This has truly been a “Comedy of Errors” and whilst the courts are not necessarily to blame in this instance, it brought a smile to my face to find that this most farcical of Shakespeare’s plays was first performed at Gray’s Inn in 1598. Apparently, according to this article on Suite101, Shakespeare took the opportunity to revise the play and added two trial scenes, which he knew would amuse the audience of legal students.

So we have a Phyrric Victory for Insurancewide and a victory without Ovatio

It can but be hoped that after 5 years of unnecessary conflict sense will now prevail and that the Commissioners will be persuaded by the refusal of the Judges at the Court of Appeal to recommend a referral to the ECJ to finally let the matter rest.

Regrettably such a decision, if it comes at all, will arrive too late for Insurancewide but it will at least allow Trader Media to get on with its business without a distraction that is both unnecessary and expensive. It would also permit the Insolvency Practitioners to proceed with the distribution of such assets that remain of Insurancewide amongst the Company’s creditors, which includes all of the staff.

It is wrong that tax authorities in this country should be allowed to waste tax payer’s money in such futile cases, especially where they are acting in direct contradiction of their own published guidelines. In other countries the tax authorities are not immune from legal action against them in such situations and if that were to be the case in the UK also then perhaps those responsible would go to greater lengths to ensure that they have a better understanding of the facts before embarking on needless and expensive legal procedures.

As it is, despite having been awarded costs in this case, it transpires that those costs are only recoverable in part and even a recovery of 50% (say) is not without close scrutiny and contest by the lawyers acting for the Commissioners. Also, whereas the basis for the recovery of costs at Tribunal is relatively liberal, in that, the advice of the Company’s accountants in this matter is a recoverable expense, when it comes to the higher Courts, recovery is restricted to those costs incurred in the provision of legal representation only.

Of course the true cost of this case is far more than the hundreds of thousands of pounds expended in fighting the legal battle.

Many thanks to Keith Sholl for this in depth look at the trials and tribulations of aggregator industry. For more great articles and industry secrets, subscribe by email, to our twitter feed or our RSS news feed

HMRC and Insurancewide The End 3/3 is a post from: Insiders View ---- Track your Twitter social media campaigns using Raven Tools