View more on these topics

Abandoned clients add to concerns over drawdown

IFAs and product providers fear income-drawdown policies could be plunged into fresh controversy over so-called “orphan plans”.

Orphan income-drawdown policies are cases where an adviser takes the maximum up-front commission and then goes out of business, leaving the policyholder with no one to turn to for advice.

With no further commission available for ongoing advice, other IFAs are reluctant to take on the client unless they are prepared to pay a fee.

This leaves the policyholder effectively managing their own plan.

The latest concerns follow industry calls in Money Marketing for an FSA review into sales of income-drawdown policies. Specialists fear that non-specialist IFAs are recommending the products bec-ause of the high up-front commission available.

The PIA ombudsman service this week added to the widespread concern by revealing that it is receiving an average of a complaint every month about pension fund withdrawal products.

Intelligent Pensions director Steve Patterson says: “There could be thousands of income-drawdown policyholders who need ongoing expertise and advice but have nowhere to turn because their financial adviser took high up-front commission.

“We have come across a number of life offices with serious concerns over orphan policies with no servicing commission.”

Recommended

The spouse trap

When is a spouse not a spouse? The subject of sex might not be automatically connected with in-depth pension knowledge but in many instances a client&#39s relationships should play a major role inthe fact-find.Frequently in pension schemes there is provision for a pension to be payable to one or more dependants of a deceased scheme […]

NPI and ScotProv sign up for Focus online software

E-commerce software provider Focus Solutions has won a contract to supply technology to Scottish Provident and NPI.Focus will provide the companies with its goal:proposal package which enables new business applications to be made online.Applications are sent out across multiple channels to IFAs, who complete and return them electronically to the product provider for processing and […]

CGNU and NU to merge funds

Norwich Union Investment Funds is to merge the existing CGU and NU fund ranges in May, following its acquisition by CGU earlier this year. The measure will see the merged investment house’s 48 funds reduced to 22, with three funds being disbanded. The Norwich US smaller companies fund will close on January 31 2001, while […]

Trusty guide shows way to sidestep tax

The David Aaron Partnership is publishing a new guide aimed at providing advice on setting up trusts for children to avoid tax.The IFA wants to promote how to set up a trust fund free to avoid inheritance, income and capital gains taxes.It explains the types of trust and discusses advantages and disadvantages of each type. […]

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