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FSA’s WP crackdown could hit smaller firms

The FSA’s proposed clampdown on insurance firms writing new with-profits business could lead to the closure of smaller insurers, according to the Association of Financial Mutuals.

Last week, the FSA proposed rules that will mean providers wanting to use capital in with-profits funds to write new business will have to demonstrate it will not erode the value of the fund or cause consumer detriment.

AFM chief executive Martin Shaw says: “The proposals could hasten the closure of mutual and smaller organisations and cause bigger mutuals to reconsider their status. For mutuals, the only source of capital is the money in the with-profits fund, while firms like Aviva have shareholder funds providing the capital.”

The FSA says “a substantial minority” of firms write new business in their with-profit fund that is loss-leading and will not break even, reducing the amount of money available to distribute to policyholders.

Shaw says firms use money resulting from intergenerational transfer that does not relate to current policyholders to back new business and it would be fundamentally wrong to pay that out to policyholders.



Sants: No “formal plan” to raise RDR qualification to level 6

FSA chief executive Hector Sants says the regulator does not have a “formal plan” to raise the minimum adviser qualification to QCF level six. Giving evidence in front of the Treasury select committee this afternoon, Sants (pictured) was asked if the FSA has any plans to raise the new QCF level four qualification benchmark to […]


Sants says simplified advice will be vital

FSA chief executive Hector Sants has stressed the importance of simplified advice services after the RDR and revealed plans to consult on simplified advice later this year. Speaking at a British Bankers’ Association conference in London last week, Sants said the regulator realises the RDR means significant change for the industry, but believes it will […]


Quit Aifa to fight RDR, says Ferguson

IFAs that are unhappy with Aifa’s work on the RDR should leave the trade body and back Adviser Alliance, according to Nucleus chief executive David Ferguson. At a PanceaIFA event in London this week, Ferguson said the IFA sector is divided over the RDR and Aifa cannot hope to represent both sides of the argument. […]

Elevate links up to offer wider choice

Axa Elevate has partnered with Premier Asset Management and Richmond House Group to offer a range of discretionary portfolios. It says by expanding the range of discretionary managers on the platform, the proposition offers advisers client-bespoke asset management in addition to a more simplistic model portfolio approach. Axa Wealth UK Distributors managing director David Thompson […]

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