IFAs have slammed Equitable Life for claiming in a national newspaper advertisement and in letters to with-profits policyholders that the only reason they are being advised to quit the troubled life office is so advisers can earn commission.
In the ad and letters, Equitable says policyholders should “seriously question” the wisdom of independent advice recommending switching to another provider because IFAs gain income by brokering such deals.
IFAs have reacted furiously, saying Equitable is trying to prevent a mass exodus of members following its admission that £1.86bn was wiped off its with-profits fund as policyholders jumped ship in the run-up to voting on its rescue plan.
They say it is unbelievable that Equitable is trying to call their impartiality into question and claim that it should instead be recommending that policyholders should seek independent advice.
The letter – signed by chairman Vanni Treves and chief executive Charles Thomson – states: “We have read speculation that some IFAs will tell policyholders to 'take their uplifts and run' to another provider. While such action often generates commission for IFAs, policyholders should seriously question its wisdom.”
Informed Choice managing director Nick Bamford says: “It is an outrageous suggestion from a pair of imbeciles. Policyholders will leave for one very good reason – they have no faith in how the society is run.”
An Equitable Life spokesman says: “We are simply ensuring that our policyholders are aware of the costs of switching to ano-ther company.”
The Equitable Life Late Joiners' Action Group has appointed Travers Smith Braithwaite to take legal action for compensation over the firm's alleged failure to inform them of its liabilities.