Product providers should be forced to pay the costs of independent advice for consumers who have been missold an endowment policy, says the Consumers' Association.
The watchdog says many consumers do not know which way to turn if they have been missold an endowment policy and the best way of resolving the issue is to see an IFA.
The CA says, given that it was most often the direct office that provided the bad advice or missold the policy in the first place, they should pay any advice costs that consumers may face.
The CA will make this argument in its response to the FSA's consultation on the endowment crisis. It will also call for the FSA to prohibit life offices from using their orphan assets to pay any compensation costs to policyholders.
It says that in the past they have been allowed to use these assets to pay for pension misselling costs and they must not be allowed to do so again.
Senior policy adviser Mick McAteer says: “If it has been mostly the direct offices that are guilty of misselling in the first place, it is only fair that the provider should have to help these people who have suffered to find the best way out of their situation. That best way is to go and see an IFA.”
Holden Meehan adviser Dan Kemp says: “It is a very good idea if clients have been missold a policy and forced to seek the advice of an IFA that any costs faced should be paid by the provider.”