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IFAs will not face bill to compensate Equitable Life clients

IFAs will not foot the compensation bill for Equitable Life clients they advised to exercise an open-market option following the guaranteed annuity debacle.

There had been fears that IFAs would be hit by claims from clients they advisedto purchase an annuity from other providers following Equitable&#39s defeat over guaranteed annuity payments in the House of Lords.

IFAs advised clients to seek an Omo after Equitable refused to pay out terminal bonuses with guaranteed annuity rates.

But following the Lords&#39 ruling this year, Equitable was ordered to stand by its guaranteed annuity rate promise. This led to IFAs&#39 concerns that they would be liable to pay for any losses suffered by clients who had taken the open-market option.

Retirement specialist Wentworth Rose has received written confirmation from Equitable that these clients will be compensated by the life office.

Wentworth Rose got the confirmation after submittingone of its own cases and asking whether the individual would be entitled to compensation.

It has now been revealed that Equitable Life is appointing an actuary to work out thelevels of payout to policyholders who have been affected.

Wentworth Rose managing director Philip Rose says: “This should allow IFAs to sleep more easily as the question of liability had been a very real one. The process of calculating compensation for open-market option schemes is likely to be very complex and long-winded.”

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