Altmann sees case for legal action against FSA over annuities
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There is a strong legal case that could be mounted against the FSA for being “asleep at the wheel” in its supervision of the annuities market, according to independent policy adviser Ros Altmann.
Addressing delegates at the Money Marketing Retirement Summit in Dublin this week, Altmann said there is still widespread misselling of annuities and the FSA has not done enough to stop it.
Altmann says the FSA should have required providers to ensure that clients have considered joint life policies, enhanced annuities and the open market option. She also attacked the FSA’s Money Made Clear annuity tables which are being reformed after much criticism.
She said: “I would say there is a strong case legally to be mounted against the FSA. The FSA yet again is asleep at the wheel. It is allowing providers of annuities or pension companies to supply customers with the wrong product at a lousy rate and take a commission out of it in the process without having to disclose any risk, without having to have any notion of whether the person has bought the right kind of annuity or even whether they have asked the right questions.”
An FSA spokesman says: “We have taken action against numerous firms for pension-related failings.”
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Readers' comments (3)
Julian Stevens | 29 Jul 2010 9:05 am
Despite the FSA's very good Money Made Clear booklet, the main problem seems to be that no unequivocal directive has been issued that all providers must issue one with their pre-retirement packs. To all intents and purposes, it's optional.
I have proposed that the MMC booklet should be accompanied by a single, brightly coloured glossy A4 card highlighting in big letters that a variety of different retirement income options is available and that, for most people, the only way to sure of obtaining proper guidance towards the most appropriate and best value product is to obtain guidance from a specialist IFA.
It's so simple. Why hasn't the FSA acted?
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Evan Owen | 29 Jul 2010 9:36 am
"Why hasn't the FSA acted?"
Er... financial stability?
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M J Winfield | 29 Jul 2010 11:55 am
The reason that the FSA have not issued or instructed the issue of a glossy card, is after producers have paid all the FSA fees, Dividends to Shareholders Provided for Compulsory Capital Reserves. There is very little to pass on to policyholders and investers.
Hence One glossy, might just be the last straw
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