View more on these topics

&#39Structured losses will be bigger than splits&#39

Structured products will prove to be a far greater problem to consumers and the industry than split-capital products, according to Liberal Democrat MP Norman Lamb.

Lamb was part of a Treasury select committee meeting last week which questioned FSA chairman Callum McCarthy and FSA chief executive John Tiner as part of its inquiry into restoring confidence in long-term savings.

MPs revealed their concerns about structured products, with Lamb asking the FSA what action it is taking to secure settlements for the elderly and vulnerable groups of consumers affected by structured product misselling.

Tiner said the FSA&#39s enf-orcement division is investigating two firms which bet-ween them have distributed £190m of precipice bonds. It is also doing supervisory work with a number of firms and has particular concerns over advice given by a further four firms. Another company has put in place a voluntary programme of redress which could amount to £5m.

Lamb voiced concern over the use of respected product provider names on marketing literature for precipice bonds to give it credibility, giving Abbey National as an example.

Tiner said the interaction between providers and intermediaries is an area he is worried about, warning pro-viders that they have a commercial imperative to make sure their name is not misused in this way.

Lamb said: “What action is being taken to see an overall settlement for investors in precipice bonds, a highly vulnerable sector? We are going to see a much bigger loss here than with splits.”

Tiner said: “The Financial Ombudsman Service handles a large number of cases such as those we have seen with endowments but the nature of structured products cases is different. We need to have conversations with individual firms. This is what we are doing.”

Recommended

Standard cuts commission for pensions

Standard Life is scaling back commission on its group and executive personal pensions, stakeholder and small self-administered schemes. It is removing guaranteed commission on group personal pension flex and stakeholder for schemes of fewer than 20 lives averaging less than £100 a month member average premiums. The company says GPP schemes of fewer than 20 […]

1st Software takes stake in iTrak

1st Software has bought a 51 per cent stake in wealth management IFA software firm iTrak which is used by 25 IFA firms, including members of Inter-Alliance and Whitechurch. ITrak&#39s software allows IFAs to separate the cost of the advice process from products, enabling firms to identify and charge up-front and recurring fees for services. […]

FSA to attach more publicity to enforcement cases

The FSA is to attach more publicity to enforcement action and to the fines it levies against firms in the future, as it believes fines are likely to be small in comparison with the turnover of companies and publicity is more damaging as it diminishes a firm&#39s reputation, brand and future business. Speaking yesterday chairman […]

DWP calls for advice in workplace where there is no pension

All employees should be given access to advice on pensions if no pension contribution is offered says secretary of state for works and pensions Andrew Smith. Launching a new pensions information pack for employers, Smith said the DWP had launched a pilot with six IFAs offering advice to employees who are not offered a contribution […]

Spring has sprung

Well, it’s been lovely to see a little bit of sunshine, even if it was only a brief appearance. I live in Scotland so, believe me, it was very brief.  Of course, with even the tiniest hint of spring, thoughts turn to the inevitable clearout that must take place.  And that got me to thinking […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com