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Phoenixes are still a burning issue

A former IFA who set up a claim management firm says the FSA is failing to spot phoenixing after he received a wave of endowment complaints against phoenix firms last year.

DTB Investments managing director Derek Baillie says his firm’s experience suggests that phoenixing is much more widespread than thought. He says 90 per cent of endowment complaints relate to policies sold by banks and building societies, not advisers. But, of the complaints received about advisers, he says around 100 complaints came from between five to 10 phoenix adviser firms.

Last year, the FSA vowed to take a tougher stance against phoenix firms. In June, it revealed that it was monitoring over 150 transfers of assets a month in its fight against phoenixing. The FSA said it had successfully thwarted 12 attempts at phoenixing in the first half of last year but is remaining tight-lipped about its progress since then.

But Baillie says: “Phoenixing is taking place under the FSA’s noses. It is a lot more widespread than people think. Honest advisers have a right to be very annoyed.”

Jamieson Financial Management principal Bruce Jamieson says: “I would like to see the FSA take a much tougher stance against phoenixing and see some action. We are coming across these firms all the time.”

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