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Brokers in the clear over pension top-up sales

IFAs are to be absolved of misselling top-up pensions but life offices face PIA fines unless they meet strict guidelines.


Next week, the PIA will crack down on the free-standing additional voluntary contribution market with tough new guidelines for direct-sales providers. IFAs are unlikely to be targeted as offenders.


This is a dramatic U-turn for the regulator which until now has consistently denied there has been any wrongdoing in the selling of FSAVCs.


Leading actuary Bacon & Woodrow says more than half of FSAVCs have been missold and that, on average, AVCs outperform FSAVCs by 10 to 15 per cent over 10 years.


PIA head of press Sarah Modlock says: “We are going to be tough and fines are not ruled out but there needs to be proof that something has been done before acting.


“The market we are looking at is primarily focused on direct-selling product providers. There are about 30 big players.”


The PIA&#39s official announcement of a clampdown follows a two-month review of the pension top-up market.


Companies which could be most affected by the tougher FSAVC regime include major life offices with direct salesforces such as Allied Dunbar, Prudential and Equitable Life.


Three years ago, the PIA issued voluntary guidelines to IFAs and direct salesforces after a review found no evidence of misselling.

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