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&#39Davies overstepped mark on Equitable&#39

FSA chairman Sir Howard Davies has come under fire from IFAs who are critical of his decision to advise Equit-able Life policyholders to accept the compromise deal on offer.

Davies stands by remarks reported in the press last week when he said guaranteed ann-uity rate policyholders should accept the offer of compensation from Halifax in exch-ange for their guarantees.

He said that there was no reason to think Equitable investors would do worse than other investors if the liabilities were capped.

But some IFAs say Davies has gone beyond his remit by telling consumers to accept a deal.

The FSA has also confirmed the Government would have bailed out Equitable if there had been a crisis of confidence likely to cause an outflow of funds across the industry. The Government&#39s tripartite standing committee, made up of the FSA, the Bank of England and the Treasury, considered the Equitable crisis and decided no action was necessary.

The FSA says Davies stands by the remarks and agrees the deal is good for policyholders generally but the regulator says it is not telling anyone to back the deal.

Yorkshire Financial Clinics director Malcolm Guy says: “Is he authorised to give advice? Has he got his FPC3? As a general rule, he should not get involved in making such statements.”

An FSA spokesman says: “Equitable Life has a highly educated customer base who can make decisions without coming to us for advice.”

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