View more on these topics

Pressure mounting on FSA to name and shame 11 providers

The FSA faces renewed pressure to name the 11 providers it found guilty of misusing Lautro projections after the revelation that it avoided a pension-style review of endowments to maintain financial stability.

Ex-FSA chairman Sir Howard Davies’s recent admission that the FSA took a less aggressive approach over endowments to avoid the possible collapse of life offices has led to criticism that it paid scant regard to IFAs.

IFA defence union chief Evan Owen believes the regulator’s persistent refusal to name and shame the 11 providers has also left both IFAs and customers in the dark to maintain financial stability.

The FSA admitted earlier this year that in 2001 it uncovered 11 firms which had “breached contractual warranty” and failed to warn customers of actual charges applied to policies between 1988 and December 1994. The FSA says naming providers would impede “open and candid” exchanges with these firms. It would make them “less willing to take prompt action”, which may include compensation, before the FSA’s enforcement division moves in.

With many IFAs blaming the current endowment misselling crisis on the skewed Lautro projections foisted upon them by providers, Owen says revealing the firms would have helped to protect both IFAs and their customers. Firms were required to use industry-standard Lautro charges in their illustrations but some had charges higher than Lautro and did not make this clear to the customer.

Owen says: “This is a mess. The FSA has left IFAs and customers in the lurch. How is it in the public interest not to reveal the names of these providers so that they can protect themselves?”

The FSA has declined to comment on the issue.

Recommended

Correspondent’s week

This week by Tim Webb, a business reporter covering energy for the Independent on Sunday

75% Say they would quit provider for poor service

This view was particularly prevalent among 25-35-year- olds, with 86 per cent saying they would vote with their feet if they were faced with poor customer service, according to research commissioned by outsourcing firm Liberata Financial Services. Sixty-five per cent of policyholders say they would switch provider if it failed to provide them with clear […]

IntelliFlo launches solo product

IntelliFlo has launched a low-cost self-service version of its Intelligent Office system for individual advisers.The product, Intelligent Office Solo, is priced at 75 a month and the software provider says it will offer single IFAs the same features available to larger companies through its Intelligent Office.net system.IntelliFlo chief executive Nick Eatock says: “One of the […]

Level paying field

What are the arguments in favour of a flat rate of income tax and how likely is it to be adopted in the UK?

Phone - thumbnail

Pension Wise — now taking calls…

Those with decent-length memories will recall that in the 2014 Budget statement George Osborne announced the new (and entirely unexpected) pension freedoms. The new rules come fully into force in less than two weeks.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment