A London IFA says he is boycotting Clerical Medical International because it is burying vital clauses within lengthy product policy descriptions.Opal Mortgage Life and Pensions director David Gomez claims Clerical Medical International has started to apply a “hidden” market value adjuster to regular withdrawals from its with-profits bond. Gomez says one of his clients wants to withdraw 1,000 a month – less than 2 per cent – from a 600,000 with-pro- fits bond. He says the product summary states that “an MVA may apply… except… where regular withdrawals of up to 10 per cent are taken” but CMI is charging an MVA of 18 per cent on the withdrawals. CMI says because the client did not keep up regular withdrawals, he has now lost the right to take withdrawals without penalty. However, CMI accepts that this detail is not included in the product summary section of the literature. Gomez is furious that the product summary does not state that an MVA might apply in this situation. He says: “The FSA tells us to ensure our literature is clear, accurate and concise, yet we are expected to go through up to 42 pages on each product. If a client will even stay interested for that long, it will be virtually impossible to do this with everyone.” Clerical Medical Internat- ional head of PR Gordon McAra says: “No bond product should be taken out without full understanding of the terms, regardless of the length of the document. “I would have thought that the client, and especially the broker, should have read through this and accepted the terms.”
The European Commission could exempt IFAs from EU single-market regulation by the creation of a “26th EU state” for firms wanting to trade across borders. The proposal, which is outlined in an EC Green Paper on Financial Services Policy, is designed to offer a lifeline to firms which are keen to escape costly EU single-market […]
Nicholas Macpherson has been appointed Permanent Secretary to the Treasury, succeeding Sir Gus ODonnell. He was previously managing director of the budget and public finance directorate and prior to this head of the public services directorate. He has worked in the civil service for 20 years.
Friends Provident has joined the Adviser E-Enquiry project, led by technology suppliers 1st and supported by Prudential, Scottish Widows, Standard Life, Webline and IBM.The project aims to promote the take up of ecommerce across the adviser community.Following the groups research study in May it now moves to the second phase of the project, aimed at […]
Prudential will not use any of its 1bn war chest to buy stakes in IFA firms but will help to finance them, says UK chief executive Mark Wood. The firm’s trading update for the half-year shows a 50 per cent rise in UK and Europe sales to 541m on an APE basis, including the Phoenix […]
Income drawdown has become an attractive proposition. But adopting a ‘decumulation’ strategy also carries risks. What are the risks advisers need to be aware of? Read the decumulation challenge. Click here to read full article
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