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Providers told they must shake up ‘appalling’ with-profits director Matthew Morris has written to the chief executives of major product providers, demanding that they raise the “appalling” service standards experienced by policyholders.

Morris says the firm recently conducted a review of the with-profits market and found that planholders are being let down by providers’ “inadequate, misleading and obfuscating” product literature.

The main concerns involve providers picking their best- performing funds or product types to illustrate returns, which Morris says deceives investors who are likely to have a different product with significantly worse results.

Companies were also found to be providing inaccurate information about guarantees, often telling policyholders that they are not entitled to a guarantee when they are.

The firm is calling for providers to produce consumer- friendly versions of the FSA-compliant literature currently used, provide details of the guarantees available and the occasions they may be applied as well as up-to-date information on MVRs, bonuses and where with-profits assets are held.

Morris says: “Such appalling standards of service cannot be allowed to continue. This is the very least that the industry owes its customers.”

Association of British Insurers director of consumer strategy Maggie Craig says: “The industry agrees it must improve the way it communicates on with-profits but it does not help consumers to paint a partial picture that could cause unnecessary concern.

“The ABI is working with members and the FSA on customer information on with-profits and will publish new guidance later this year.”


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When he was Chancellor of the Exchequer, George Osborne made several changes to the way in which income is taxed. Personal allowances were increased significantly above the rate of inflation; a starting rate band was introduced for savings income and, with effect from 6 April 2015, this was assessed at 0 per cent. In addition, […]


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There are 5 comments at the moment, we would love to hear your opinion too.

  1. FSA & advisers
    What is the FSA doing about this if the service standard and product docs are not up to scratch? Or is this going to be another one where the FSA sits on the fense and afterwards by using hindsight blame the IFAs for bad advice???

  2. With Which Profits?
    All with profits funds should be broken up and distributed among the policyholders, not the government, not the shareholders. In future with profits funds should only be allowed to designated as being with profits if the provider is a mutual organisation. Simples!

  3. A bit biased
    Matthew Morris has a vested interest in kicking up a fuss whether what he says is justified or not. He has spent the last few weeks generating maximum publicity in the likes of the Daily Mail. He gets his money from referals of customers who contact Exit With-Profit. Some providers offer good service other do not, Mr Morris is making a sweeping generalisation which damages all providers.

  4. With Profit providers
    About time that somebody looked at the way with profits funds are being run, the deceiving way that clients are misled, and the appalling way that companies can change their litrature to suit themselves, I would like to point to the shocking way That the Royal London is been run, How in only 9 years can a company decide that smoothing firstly was to protect long term loyal investors and then change this statement, To Smoothing protects short term investors?. Also in 9 years the management of this fund has benn able to reduce its with Profits payouts on a twenty year policy from 5. 3 times the sum assured to relying on the GMB. a reduction on a £20,000 sum assured policy of over £90,000 but the Chief exec Mike Yardley can pay himself a £400,000 bonus into his pension fund ontop of his £600,000 salary And the policy holders are yet again given no annual bonus. and the final bonus has been halted. The FSA should be turning it’s attentions fully onto these people as it is not the selling of these policies that was wrong but the management of them.

  5. Providers told they must shake up ‘appalling’ with-profits
    It seems that the deeper one digs into the murky world of With Profits, with only a very few notable exceptions, the more s**t you find and the greater the stench. Except for the typically ill-considered haste and appalling timing with which the FSA embarked on its investigation into and root and branch reform of With Profits, I think most people now have to accept that it probably was a very appropriate area to target. What we need next, of course, is a similar programme of reform on the FSA itself.

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