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Persistency errors show why providers must rethink admin

DBS figures suggest that half of all claw^_back cases pursued by life

offices are false.

More than 1,000 DBS IFAs are using a daily system to check whether their

claw-back cases are bona fide so the sample must be significant. And if

these figures apply nationally, IFAs should be up in arms.

Time and time again in surveys by IFAs and by the regulator, providers

have been found wanting on administration.

To penalise IFAs for “cancelled” policies which have not been cancelled is

utterly reckless at a time when advisers are facing unprecedented pressure

on margins.

For some months, this paper has been running Bungle Busters, which aims to

expose life office blunders. The results underline why providers must get

their own houses in order.

But mistakes made over clawback are of a completely different order. Not

only do they deny IFAs income which is rightly owed to them but providers

are making mistakes in one of the most sensitive areas in financial

services, that of persistency.

The Government and consumer groups have for years used low persistency as

a stick with which to beat the industry. If
this level of clawback

translates into an incorrect perception of rates, then it is

damaging IFAs&#39 reputations.

The ABI is working on proposals for accreditation to sort out persistency,

admin and other issues. But individual insurers must get these things right

themselves as
a matter of urgency. Life offices owe a
lot to IFAs

and will still rely on them in future, however dramatically the market

changes. It is time the industry started behaving as if it believed this is

the case.


RBS to cut 9000 jobs before the end of the year

The Royal Bank of Scotland has confirmed that it will cut 9,000 jobs by the end of this year, as a result of its takeover of NatWest.The bank insists it will not engage in wide-spread bank closures. RBS chief executive Fred Goodwin says that branches of the two banks will remain side-by-side on high streets.The […]

NPI fund charges to be based on performance

Pension provider NPI is the first life office to base external fundmanagers&#39 charges on performance.The company believes one way IFAs can fight back in the post-stakeholdermarket is to offer external fund management links on its pensions. It isalso making the fund links open to all its new and existing customers.NPI says it whittled its choice […]

LIA predicts stakeholder bonanza

The LIA believes IFAs could name their price for advising on stakeholderschemes.In an interview with Money Marketing, new president Peter Sprung saysthere will not be enough IFAs to meet demand when the stakeholder deadlinecomes around.Employers not wanting to use decision trees would pay for advice on top ofthe 1 per cent charge and IFAs could […]

A cooler summer is the hot forecast

Do you think Catmarked mortgages will enjoy high sales?SK: The way the qualification criteria have been drafted,I think it ishighly unlikely that Catmarked mortgages will sell in any volume.There is little or no incentive for lenders to maintain the current large“giveaways” on a Catmark. I believe Cat-qualifying mortgages will become astarting point for borrowers when […]


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