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FSA probes advice on cashing in WP

The FSA is running an investigation into the with-profits sector amid fears that advisers are not knowledgeable enough to advise clients on whether to cash in policies.

The regulator says it has received anecdotal evidence of poor advice and a failure to move beyond the dogma that open funds are good, closed funds are bad. It adds that some firms are reluctant to advise customers to leave a with-profits fund because they could be accused of churning.

The concerns were first raised by FSA industry sector leader David Strachan during a speech last November.

He pointed to one adviser asking whether he was expec- ted to understand the with-profits policies he had been advising on for 10 years and another recommending a policyholder stay in a closed with-profits fund based on the rationale that, as a closed fund, the provider firm would not be liable to misselling compensation costs.

FSA spokesman Joseph Eyre says: “We have received anecdotal evidence that it is not easy to find advice on this subject as few advisers are proactively engaging with customers to deal with their with-profits investments.”

Lowes Financial Management managing director Ian Lowes says: “Clients also have a duty to come to us. There is a degree of subjectivity which makes the job very difficult for advisers. There are also many clients that are not prepared to accept the surrender value net of the MVR.”


NU and Morgan linking up for UK growth fund

Norwich Union and JP Morgan Asset Management are joining forces to launch a UK growth and value fund that aims to beat the index by 2.5 per cent a year after charges. NU is bypassing its in-house managers at Morley and will take 200m out of one of its Morley-run with-profits funds to seed the […]

Mortgage View: Building up to a flat market

The Mortgage Works announced last month that it was pulling out of buy-to-let lending on new build flats, and flats less than one year old because the scale of builders’ incentives was making valuations unreliable. It is are continuing to lend on residential new build flats and on newbuild BTL houses.

Deutsche names lending arm

Deutsche Bank’s mortgage lending arm, which is launching later this year, will be called db mortgages. The lender will offer sub-prime, buy-to-let and self-certification mortgages.

Ad spend soars for Isa season

Several leading fund managers are increasing their advertising spending this year in anticipation of a bumper Isa season with improved inv- estor sentiment. Artemis has raised its first-quarter spend to 2.3m from 1.3m last year, with 500 branded taxis on London’s streets, ads at London mainline rail stations and South-east commuter stations. Invesco Perpetual sales […]

Spring has sprung

Well, it’s been lovely to see a little bit of sunshine, even if it was only a brief appearance. I live in Scotland so, believe me, it was very brief.  Of course, with even the tiniest hint of spring, thoughts turn to the inevitable clearout that must take place.  And that got me to thinking […]


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