I am impelled to write to express my concern that commentary on “Inequitable Life” has missed an important fact – Equitable's advertising was highly dubious.
1: Equitable heavily promoted the fact that they paid no commission to middlemen. This was misleading as Equitable have a salesforce and their high salary levels were dependant upon bonuses. The 'no commission” statement was a myth. What is the difference between commission and bonus? Surely it is just different terminology.
2. Equitable advertised with-profits tables showing how successful they were but failed to mention the significant and eventually damning fact that, unlike their competitors, Equitable did not keep back funds for reserves.
These two misleading declarations which were continuously emphasised by Equitable, the combination of being top and no commission, were extremely effective in persuading investors to become clients. The adverts only referred to with-profits in the small print. Their unit-linked funds more easily compared with competitors did not show as well as the withprofits tables.
Equitable majored on with-profits, surely an outdated concept, and quoted low charges on their illustrations. As you are aware, Equitable's with-profits fund charges, like their competitors, are shrouded in mystery.
Many accountants and solicitors who dislike the notion of commission and selling advised and purchased Equitable. Financial journalists sang Equitable's praises. At what cost?
Sovereign (Financial Services) Group,