There are all manner of sharp practices being used, many simply illegal. Some firms set up, only to disappear again almost overnight with their customers’ money.On this side of the law, some marketing and advertising tactics have appalled IFAs. Firms defend themselves by saying that with many insurers applying time bars, speed is of the essence and consumers should be made aware of their rights. It is not surprising that many IFAs are hostile to the system. They question why their clients can claim for theoretically underperforming policies which may not show a loss at maturity. Advisers also believe that the balance of proof lies with them to prove themselves innocent despite the fact that regulations in force at the time of the endowment sale did not require the full complexity of today’s documents to justify a sale. They also point to the prevailing wisdom of the time about endowment mortgages. A great deal of this is true. It is not just the excesses of endowment chasers but also the way in which the system appears almost incapable of showing flexibility in, say, the cases of John Joseph or Ivan Massow where there are very strong extenuating circumstances. But what it also shows is that politicians and regulators did not fully consider the implications of the system before it was set up and whether, following the pension review, financial services could take another shock like this. It has allowed cowboys to take advantage of the compensation culture, created many instances of unfairness against firms and threatened the existence of many advisers. Action is now planned to regulate endowment chasers which may address some issues, but was it so difficult to foresee how the endowment crisis would attract cowboy outfits? They are merely the worst example of what can happen when a compensation culture gets out of hand. Maybe it is time that the whole system was adjusted and the Wild West tamed.
The FSA has confirmed the departure of head of mortgages and credit unions Andy Watson from the small firms division. Watson, best known as the FSAs spokesman throughout mortgage regulation and its subsequent investigations will be leaving on January 31. A replacement has yet to be announced. Watson was unavailable for comment.
IFA Promotion is issuing a factsheet through its website explaining key facts disclosure documents to consumers.The sheet explains how consumers can use the mandatory information covered in the two documents – About our Services and About the cost of our services. It clarifies the status of financial advisers and looks at how consumers can use […]
Prudential is adding a further three trusts to its inheritance tax planning product suite and is arming advisers with revamped sales aids. An excluded property trust, lifetime nil-rate band trust and discounted gift trust are being launched by Pru to bring its range to a total of 16 trusts. The excluded property trust is aimed […]
The financial services industry has been hit by a plague of ambulance-chasers which are running off with advisers’ compensation payouts to customers. The claims management sector’s voluntary watchdog, the Claims Standards Council, says it has been inundated with complaints about claim management firms which enter the market and then disap- pear with their customers’ compensation. […]
Our client leads the global market in high-tech electronics manufacturing and digital media. The trustees of the company’s final salary pension scheme insure death-in-service lump sum and dependants’ pension death benefits for active employees, as well as dependants’ pension benefits for deferred members (those who have left service).
News and expert analysis straight to your inboxSign up
Latest from Money Marketing
As someone training to be a cricket umpire, fair play matters to Fortitude Financial Planning director Chris Bowmer. Doing the right thing for clients is something he has adhered to from the start of his career, even in a 1980s sales environment with nothing to gain by delving beyond a client’s surface requirements. While he acknowledges […]
Fund managers who have helped pay compensation over the collapse of life settlement bond provider Keydata will receive a £12m refund, the Financial Services Compensation Scheme has announced. Keydata’s management has been embroiled in a multi-million-pound legal battle with the FCA since it collapsed in 2009. The total bill for compensation stands at more than […]
With no employer to fall back on, the self-employed are on their own when it comes to retirement saving. Irregular income patterns can make it harder to save regularly into a pension and commit to locking money away until age 55. Those who are building a business may see that as their biggest asset and […]