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How regulator&#39s team found new FSAVC cases

Up to 1,400 IFA firms around the country will this week be receiving details of further potential FSAVC review cases from the FSA.

These details come from a database put together using information on FSAVC sales both from product providers and IFA firms.

Why is the FSA doing this? The simple answer is that, as few product providers have offered FSAVC policies, we have been able to look very closely at their records to ensure they have identified accurately those FSAVC sales that need to be reviewed.

These are sales where the investor would have been entitled to matched or other subsidised benefits if they had put their money into the in-house AVC or main occupational scheme instead of the FSAVC. Examples include where the investor was a member of the Post Office pension scheme or Vauxhall pension plan.

By collecting information from product providers and checking it very carefully, there is less need to visit large numbers of IFA firms to check the quality of population identification work. The good news is that your firm is much less likely to get an FSAVC review supervision visit than was the case with the pension review.

The FSA&#39s work with product providers has included looking at copies of proposal forms for scheme names and checking the correct details of the agent at time of the sale.

Having checked product providers&#39 records and loaded them on to the database, we have then cross-checked these against IFA returns, matching and combining records where they refer to the same review case. Many thousands of cases have matched and these now form the basis of ongoing reporting.

But we have also found product provider records where we cannot with confidence match the case with a corresponding IFA return. Where this has happened, we have double-checked the details. For example, we have looked again at the original return from the IFA firm to make sure we are not missing anything, such as where the product provider has named the investor as Jane Smith but the IFA has put down Janet.

We are also on the lookout for people who might have changed their surname on marriage or divorce. It is only after this careful process that we have prepared the information to send out.

To put this work into context, the FSAVC review team have now checked the details of 8,670 cases relating to 2,277 IFA firms, including several hundred firms that are no longer trading.

We have used experienced staff to do this, which has meant that our FSAVC review helpline has had to offer a restricted service for the past few weeks. I would like to thank those of you who have struggled to get through recently for your patience but it has been for a good reason.

What can you expect to receive and what should you do with the information you get? Details of cases will be set out in a standard format and there is an example in annexe M of the FSAVC review model guidance. All the key information you would expect to find should be there, for example, the investor&#39s name, date of birth and National Insurance number.

The details will also include the name of the product provider concerned, the policy number and the date of advice or first premium payment. Perhaps most important, details will also be provided of the scheme or employer at the time of sale, for example, the Tesco money-purchase scheme.

IFAs will also get a letter explaining why the FSA is issuing this information and asking for them to acknowledge it, preferably by email.

If your firm is sent Annexe M information, the key point to remember is that the FSA is not saying that your firm must review the case. However, we are saying that you should refer to the guidance published in March 2001 and then follow the steps outlined in it. In essence, this involves cross-checking the information against your own records to see if you have missed the case from your records for some reason.

Where necessary, you can approach product providers for further details to help decide if the case is your responsibility or not, for example, by asking for a copy of the proposal form.

Product providers have been asked to set up suitable arrangements to deal with such enquiries. Clearly, if the case is your responsibility, then you need to review it in the normal way. This means adding the case to your review population and notifying the FSA using the standard paper return. We will then attach the database record to your firm and, for those of you reporting online, the case details will be available electronically for ongoing reports.

You should be careful to include even those cases where the investor does not need to be sent a mailing, such as because they were never eligible for the matched or other subsidised benefits.

If, on the other hand, the FSAVC sale is not your responsibility, you simply need to record details of your cross-checking work, together with the reason for not taking the case any further. Then simply close the case.

There is no need to write to the FSA to tell us that you have done this. If we want further information, we will contact you direct.


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