If only they hadn't cut out the middle man. It would be difficult to find a tale from the financial services industry that fitted the mould of a Shakespearean tragedy more neatly than Equitable Life closing to new business.
The original error in providing an annuity guarantee over two decades ago was made by several insurers. But it was Equitable's arrogance in failing to reserve for its liabilities that ultimately placed its fate in the hands of judges.
Those in “middle Britain” who felt they did not need an IFA continued to benefit as Equitable maintained generous payouts but they are now ruing the day.
There are many lessons from this debacle but a few stand out.
The first is that companies must not become so steeped in their own propa ganda they become unable to change direction. Even after policyholders, annuity specialists, politicians and even the Law Lords had blasted the life office for its careless attitude to members, Equitable's management could not come to terms with the mess they had made and strike a deal.
Second, this would not have happened if the company had been subject to the stern scrutinising role played by IFAs, though no one can say for sure if this would apply in a multi-tied system. And finally, the Government and regulator must be careful when they play political games with the viability of the sector.
Equitable's problems were funda mentally of its own making but others must not gamble their own financial integrity in the 1 per cent world simply because stakeholder has been imposed from above.