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Offices will pay out £100m to aid IFA review

Life offices are to stump up £100m to bail out IFAs struggling with the pension misselling review in a deal brokered by the ABI.

Thirty IFA life offices have set up a new company, Pensions Advisors Support Systems, which will have two subsidiaries.

PASS (Bureau) will draw up a guide explaining processes and standards to help IFAs understand administration of the review.

It will be supported by a helpdesk and will offer independent checks on completed cases. The ABI is also planning to offer IFAs a lifeline with actuarial work. It is offering to contract out redress assessments to direct-sales life offices or companies with big rev iew units. IFAs will be required to pay a commercial rate for the services.

PASS (Loans) will offer loans of up to £250,000 a firm to pay misselling redress.

The scheme is aimed at IFAs with less than 25 RIs and interest will be charged at the bank base rate plus 2 per cent.

The ABI&#39s IFA Life Office Group will pay for start-up costs of £4m-£6m as well as covering the loans.

ILOG chairman and Scottish Amicable managing director Roy Nicholson says: "The scheme will only work if IFAs want it to work.

"We want to see a vibrant small IFA sector. IFA life offices cannot operate with just national brokers and networks."

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