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Confusion over FSA &#39probe&#39 on Clerical

IFAs are calling on Clerical Medical and the FSA to clear up the confusion over whether the life office is being investigated by the regulator.

Reports surfaced in several national newspapers late last week that the FSA is investigating the HBOS subsidiary, ordering it to hand over documents relating to the administration of Equitable Life policies.

But it is believed there is no link between any possible investigation and Equitable life policies, with industry sources pointing out that the FSA has employed a common regulator tool which does not necessarily lead to enforcement action.

The tool, Section 166 of the Financial Services and Markets Act, obliges companies to comply with requests from the FSA for background information if it suspects wrongdoing or deficient systems.

Last year, the FSA employed section 166 requests 31 times and the year before 30 times. It is not uncommon for such requests not to lead to any further enforcement action being taken.

IFAs say there is a clear need for the situation to be resolved after the controversy which led to Standard Life&#39s announcement in January of a strategic review. Then, mixed press reports left the industry unclear as to who precipitated the problems within Standard until statements were made by Standard and the FSA.

HBOS would not comment other than to say that any possible investigation has nothing to do with Equitable Life and there are no questions surrounding HBOS&#39s financial stability.

The FSA says it never comments on individual companies.

Informed Choice adviser Martin Bamford says: “We all saw the damage during the Standard scenario where neither party would state the truth of the situation. It would be responsible for Clerical to issue a statement clarifying what is happening.”

Timothy James & Partners director Rob Guy says: “If it is going on they should be telling IFAs. They have nothing to lose by stating they are being investigated, it is not as if IFAs are going to pull their clients&#39 money out.”

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