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CA says using WP funds to pay for misselling is tantamount to &#39theft&#39

The Consumers&#39 Association is warning the FSA it could be allowing corporate theft if it permits life offices to use with-profits funds to pick up the bill for mortgage endowment misselling.

The CA says the majority of the six million with-profits policyholders are already suffering from mortgage endowment shortfalls and argues shareholders of proprietary offices should be the ones who meet the cost of any compensation.

Itsays there should be no repeat of the payment from with-profits funds to meet a proportion of the £13bn pension misselling and is calling on the FSA to make a clear statement to the industry that shareholders carry the financial responsibility for mortgage endowment misselling.

It believes that, without a clear statement to this effect, the FSA will be failing to protect consumers who are already suffering financially.

CA director general Sheila McKechnie says: “This industry is taking consumers for a ride. Not only have they missold them unsuitable products, which are failing to meet the mortgage target, they are now expecting these poor consumers to foot the bill for industry wrong-doing. It is a simple question of arithmetic, every pound used to bail out shareholders is a pound that cannot be used by policyholders to pay off their shortfalls. The FSA cannot allow the industry to get away with corporate theft.”

FSA spokesman Rob McIvor says: “We have acted to address the issue of fines being paid from policyholders&#39 funds, which is no longer allowed. But we have no plans to require redress to be taken out of shareholders&#39 funds.”


New head of investment trusts at First State

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Cancer makes up most CI claims says Scot Prov

Almost half of male critical illness claims and the vast majority of female claims are cancer related according to new figures from Scottish Provident.Cancer is the cause of forty-seven per cent of males claims through the provider and 79 per cent of womens&#39 are Scot Prov says.Nearly half of the female claims are due to […]

IMA rejects Sandler view on fund charges

The IMA has rejected the Sandler review team&#39s conclusion that there is no correlation between fund charges and performance, saying the evidence presented to Sandler points to an opposite conclusion.Having had access to the same data upon which the review team based its conclusions, the IMA says there is a distinct relationship between the cost […]

Cazenove and AIG provide multi-manager bond

CAZENOVE INVESTMENT FUND MANAGEMENT CAZENOVE UNIVERSAL INVESTMENT BOND Aim: Growth and income by investing in four multi-manager fund of funds Minimum investment: Lump sum £50,000 Investment split: 100% in Cazenove universal UK growth portfolio, Cazenove universal balanced portfolio, Cazenove universal growth, portfolio or Cazenove universal international portfolio (ex-UK funds). Income facility: Yes Charges: Initial 4.5%, […]

When is £1m not £1m?

Neil Jones is technical support manager with Canada Life’s ican Technical Services Team. Canada Life offers a range of wealth management solutions, including retirement income planning, estate planning and investment solutions from a choice of jurisdictions, including the UK, Isle of Man and Republic of Ireland. The residential nil-rate band (RNRB) was first announced in […]


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