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IFAs slam &#39scaremonger&#39 FSA over endowments

IFAs have slammed the FSA for scaremongering after it urged mortgage endowment customers to take action despite the majority of policies being on track to pay off homeloans.

The regulator has come under attack after publicising research claiming that 70 per cent of endowment policyholders have failed to take measures to safeguard their mortgages as a result of the recent reprojection exercise.

It has issued a factsheet to consumers aimed at spurring endowment holders into action but IFAs point out that even the FSA research demonstrates that the majority of these policies are on target.

The regulator&#39s survey shows that of the 70 per cent of policyholders still to act, alm-ost 60 per cent gave what the FSA describes as “sensible reasons” for not doing so, including a third of this 60 per cent whose policies are on track to pay off their mortgage.

Pensions & Investment Management principal Phil Moore accuses the FSA of making a ham-fisted attempt to try and grab headlines while “worrying policyholders to a stupid extent”.

He claims the regulator is blowing the research out of all proportion and has failed to understand how the policies work.

Pretty Technical Partnership partner Kim North says: “The FSA needs to be very careful about what it puts forward as many people do not even realise what a shortfall is. It needs to educate, educate, educate and not come out with headlines like this.”

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