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FSA must come up with answers as Equitable axe falls

The grim conclusion from the Equitable Life debacle seems to be that

everyone who could have got out should have got out but it may now be too


Equitable has proved to be a zero-sum game. The axe has fallen on

Equitable policies with a drastic 16 per cent cut in pensions while life

insurance plans face a 14 per cent cut through reductions to terminal


Thousands of investors will still find themselves in a Catch 22 situation

about whether to remain with Equitable.

There is vastly more consumer detriment resulting from Equitable&#39s closure

to new business, despite the Halifax deal, than from Independent

Insurance&#39s collapse.

In many ways, Equitable&#39s new management has little choice but to try to

balance the books to meet the demands imposed by the House of Lords&#39 ruling

for its guaranteed annuitants although Money Marketing will scrutinise its

actions to see if it really had to offer such harsh terms or if it is

guilty of an over-reaction.

But the second issue is the reaction of those responsible for regulation.

Clearly, the regulator and the Government faced dilemmas over Equitable as

it lurched from crisis to crisis before closure.

But in its attitude to the Treasury select committee, the FSA showed a

tendency to news-manage rather than find answers.

The decision to delay publication of the FSA internal inquiry is not good

enough.It should be a top priority.

By failing to come up with answers to what went wrong, the Government and

the FSA risk rubbing salt into the wounds of Equitable investors.


Association to boost mortgage brokers

A new trade association aimed at cleaning up the public image of mortgageadvisers and helping them cope with regulation is to be launched next year. The National Association of Mortgage Brokers and Advisers, headed byformer freelance compliance consultant Julian Jennings as chief executive,is aiming to recruit all 14,000 firms registered by the Mortgage CodeCompliance Board […]

Newbury bypasses flexibility with discount

Newbury Building Society has introduced new deal homebuyer, a five-year discounted rate mortgage that calculates interest on a daily basis.The mortgage is available for loans of up to 95 per cent of valuation and has a 0.25 discount for the first five years, giving a current payable rate of 5.74 per cent.It has no early […]

Record moves at fund firms

Fund manager moves have soared to an all-time high, with almost a quarterof all unit and investment trusts witnessing a change in lead manager lastyear. A total of 470 unit trust managers moved in 2000, up by 78 per cent fromthe 1999 figure of 263. Of 374 investment trusts, 59 saw a change inmanager. The […]

Join the with-profits debate

The with-profits debate will get a thorough airing at the hands of anumber of industry big hitters at a conference organised by Infoline onSeptember 19. The conference will look at whether with-profits are right for today&#39sconsumer, whether they can work in a stakeholder environment and howquestions of transparency, clarity of communication and guarantees can beaddressed. […]


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