View more on these topics

Regulator’s income muddle Letter to the FSA

If I were a member of your monitoring department and I found an IFA peddling a description of income withdrawal as below, I would take action against that firm for misleading investors.

However this is taken from your own website.

Please remove it or change it and provide us with an explanation of why you are misleading potential investors. The first sentence is wrong on two counts. This is the text:

Income withdrawal

“A contract with an insurance company where you take an income direct from your pension fund, while leaving most of it invested in the stock market or other asset-backed investments. Usually, the hope is that the returns on your invested fund will make up for all or most of the charges and any income withdrawn, and be enough to sustain your income. However, the fund value could fall as well as rise and any any income you take plus the charges, will reduce the value of your fund if they are more than the investment growth.

I found the above quite astonishing. The FSA clearly do not understand what income withdrawal is.1: It is not a contract, it is an arrangement.2: Why should it be with an insurance company?3: What has the investment got to do with it? You might just as easily leave the money in cash.

If the FSA are on a mission to nationalise financial advice in their own image then at least they could get the definitions right.

These errors are repeated at the FSA monitoring department. Recently, a circular stated that smaller drawdown cases were higher risk because small meant higher risk and higher cost, which hardly follows.

These errors are also repeated at the FOS where adjudicators are making similar statements, showing their lack of understanding of relatively simple products.

Charles Llewellen Palmer

Financial Ltd



Northern Bank and FSA in offshore sales dispute

A dispute between the FSA and Northern Bank could deter firms from moving offshore to sell into the UK. Belfast-based Northern Bank has suspended mortgage sales into the UK from its Isle of Man arm while its lawyers and the regulator are locked in talks about whether the bank needs FSA authorisation for sales on […]

RLAM wins 145m Skandia IM fixed interest mandate

RLAM has been selected by Skandia Investment Management to manage a segregated actively managed corporate bond portfolio of 145m.The RLAM mandate follows a tendering and selection process and forms part of Skandia IM’s multi-manager range. It will be managed by RLAM head of fixed interest Jonathan Platt.RLAM chief executive Andrew Carter says: “This indicates growing […]

Called to the bar

The Diary hears a shocking rumour that cannot possibly be true from Edinburgh where Scottish Widows is said to have become so embarrassed with the drinking exploits of its staff in Edinburgh that it is to open its own private bar to keep its marauding troops away from the public. The company has been granted […]

Exchange announces roadshows

The Exchange has announced a number of roadshows aimed at showing existing subscribers how they can maximise the value of its service.The events will take place in Southampton, Chelmsford, Manchester, Cheltenham, Newcastle on Tyne and Bristol in February and March.They will last two and a half hours with delegates having the opportunity to share business […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and thought leadership.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm