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Policyholders&#39 interests under threat after AMP bonus warning

IFAs are calling for the FSA to ensure that policyholders&#39 interests are protected following AMP&#39s revelation that future bonuses will be zero for many UK with-profits fund policyholders.

Hargreaves Lansdown head of pension research Tom McPhail says it would be constructive for the industry to see the FSA taking a strong and early lead on any issues concerning policyholder payouts.

Syndaxi Financial Planning principal Robert Reid says the regulator has been conspicuous by its silence and should be making an effort to give the industry some comfort.

AMP&#39s move has promp-ted McPhail to call for policyholders to act now to hold on to future bonuses.

He says he is unsure whether there is a legal case for policyholders to force AMP to leave more capital in the UK to meet future bonuses but is urging them to contact pension lawyers to find out.

He believes policyholders may have a case under the legal concept of “reasonable expectations”, the idea that it is reasonable to expect a level of future payout based on past actions, including payouts, marketing material and statements to policyholders.

McPhail says: “If I were a policyholder, I would be getting a pensions lawyer to look over my policy now.”

Reid says: “It would have been helpful if the FSA could have given an overall view of whether what is happening is acceptable or not. They have not done anything to give the industry any comfort at all.”

The FSA declines to comment, saying it cannot speak about individual companies.

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