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Moore&#39s code

No one can deny the situation at Equitable Life is the most appalling mess. In an industry which has made its fair share of stupid mistakes in recent years, I invite the directors of Equitable to take a bow.

I have been hearing for a number of years from a number of people how they believe the life industry has got its house in order after the mistakes of the past. Right.

Almost no one emerges from the wreckage with cred it. Amazingly, some of the people who have the most to answer for appear to be wilfully digging themselves into the dirt as time goes by.

Alan Nash, the managing director, has been the only board member to quit.

The £200,000 in his pocket and a lucrative pension must make some of the society&#39s members, who have seen thousands of pounds wiped off their pension funds, deeply sick.

But at least he fell on his sword. It is shocking that not one of the non-executive dir ectors who were supposed to represent policyholders&#39 interests have had the honour and decency to resign.

This shows an appalling arrogance and contempt for those members. Recrimina tions are easy, though. The most important thing to do in the wake of the Equitable situation is to ensure that a similar disaster does not occur again.

One of the best ways of doing this would be to get rid of the secrecy surrounding with-profits funds. I wrote a few months ago about why these are a dreadful idea. Your honour, I rest my case.

If ever I needed to explain to someone why they should avoid with-profits like the plague, all I would need to do would be to give them a few clippings on Equitable Life.

I have been told the regulator is looking seriously at with-profits funds and how to improve the regulation of them.

I would encourage it to do more than tinker around with disclosure, which will have dubious results at best. I believe it needs to institute fundamental reforms.

There are millions of people invested in these funds but it is maddeningly difficult to find out what they are inv ested in, how they are run and why they do what they do. This needs to change.

One thing Equitable did do was to declare annual returns from its with-profits fund, something few others bother with. It is time that changed.

It is time policyholders and their advisers were provided with detailed information on where a fund invests and what its portfolio looks like.

It is also time policyholders&#39 interests were given more weight in the way these funds are run. The FSA must find a way to do this. I would not cry if with-profits was banned and gradually phased out but if we must have it, and I accept that it is an attractive concept to some people, it is time this industry was honest about it.

The FSA has said it wants to learn from what happened at Equitable. I hope it takes this seriously because the various agencies that regulated insurance companies before its creation have clearly done a dreadful job in this case.

One thing it must do imm ediately is investigate sales to 15,600 policyholders following the House of Lords judgement which left the Equitable in such a state.

The FSA allowed Equi table to continue to write new business. Its salespeople were charged with explaining its situation to these people. But I find it difficult to accept that anyone who had the Equitable situation properly exp lained to them would go anywhere near its with-profits fund in the wake of the crisis surrounding it. Passing the buck to the ombudsman is not good enough. The FSA itself should act.

One final point. There are several hundred thousand mostly quite wealthy policyholders out there who badly need high quality financial advice.

Many of these are those fabled high-net-worth individuals every financial services business in this country is desperately trying to attract.

The opportunities are obvious. But I hope, for their sake, that IFAs live up to their exalted titles and provide high-quality financial advice and do not see this as a quick opportunity to rake in some fat com missions.

If IFAs do the former, it would send a powerful message to send to the Govern ment and regulators. If many do the latter, well…


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