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Persistency changes to boost stakeholder

The FSA is planning to overhaul its persistency regime in a bid to allow stakeholder to appear a success.

The regulator says it is looking at the possibility of scrapping the PIA&#39s current method of gathering and recording persistency across all products and replacing it with a new system which presents persistency alongside league tables, which are due to be launched later this year.

The FSA says it is likely to begin consulting on the review shortly and the move is driven by the need to accommodate stakeholder&#39s key feature of allowing individuals to stop and start contributions, potentially leaving payment gaps of many months.

The move comes amid concerns that the current system stacks the odds against stakeholder in the persistency stakes as policyholders do not have to maintain regular payments each month.

The ABI agrees the current system requires a fundamental change if a meaningful picture of stakeholder retention is to be generated.

FSA spokeswoman Jackie Blyth says: “We will be looking to ensure we collect data fairly and accurately. The PIA persistency tables are unlikely to come out in the same way and could be put with comparative information tables.”

ABI spokesman Vic Rance says: “The FSA is talking about collecting persistency figures for stakeholder but the way information is collected at the moment will lead to results which will not be meaningful.”

Clerical Medical pensions strategy manager Nigel Stammers says:

“Persistency measures are out of date in the stakeholder world.

“A consumer paying in one day and paying nothing more for a year is using the plan in the way it was intended. That should not count against the life office.”

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