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Consumer assassination

I refer to Terence O’Halloran’s letter attacking Dianne Hayter (MM, 18 August).

I would be interested to know his reasons for concluding that consumers would be better off without representation by a consumer panel.

He mentions the disappearance of defined-benefit pension schemes. How does he think that relates to consumer representation, particularly when most consumer bodies would like to see a reversal of the decline in numbers of such schemes?

From what I have read, the decline is more to do with poor investment performance and employers’ reluctant to increase contributions.

As for with-profit endowments, or with-profits in general, in the minds of most people it is chiefly distinguished by the incredible lack of transparency, it is clearly not for customers to understand what counts as a legitimate profit for the fund or a legitimate expense of the insurance company.

Insurance companies have more formal and legally defined duties to their shareholders and distributors than to their customers and the pattern of their actions as far as it can be judged from the outside is consistent with this – the customers get crumbs at the discretion of the with-profits provider.

From my understanding of corporate life, the existence of what, in the eyes of too many insurers, is little more than a slush fund is useful to get things to happen, for example, subsidise stakeholder pension commission, when otherwise paralysis would occur it strains credibility to believe that this effect acts consistently in the interest of customers.

In another world, major suppliers would work closely with consumer panels to understand how customers and suppliers could act together to remove waste. When suppliers and their distributors / IFAs reject attempts by or on behalf of customers, I think we are entitled to smell a rat.

As for his character assassination on consumerists, I am sure many of us will recognise that the phrases “self-serving, highly paid, self-aggrandising” could be far more accurately applied to some IFAs we know.

Aidan WardFair Money

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