I watched the film Titanic the other night and the similarities between the management and the eventual demise of that ship and the management and potential fate of Equitable Life were remarkable.
Having received the most recent correspondence from Equitable Life with regard to the High Court's approval of the compromise, I was astounded to read some of the comments made by the captains at the helm of the good ship Equitable.
Can they not, even now, accept responsibility for their actions without having to fire a broadside at IFAs? Without rambling on about IFAs advising their clients to “take their uplifts, surrender and run” and “such action often generates commission income for IFAs” and “another provider may charge them an entry fee, which could be as high as 5 per cent”?
First, do they realise how many Equitable Life clients are actually coming to IFAs and telling us to “get their money the heck out of Equitable”?
Do the captains seriously believe that the passengers on board the Equitable still trust them or wish to remain on board a ship that has been listing so badly, for so long?
Oh, and what about commission, that small thing that Equitable Life never paid it's advisers? “We don't pay the middleman” the captains shouted over their loudspeakers from the ship's bridge.
You can imagine that my clients on the lower decks were quite surprised to discover just how well remunerated the Equitable Life advisers were through bonuses and sales costs, etc.
At least IFAs are up front about any commission and fees earned. Oh, and with regard to the entry fee charged by other providers receiving transfers. Hello, captains! Stakeholder pensions enable free transfers and low ongoing charges.
Yes, there is a 10 per cent financial adjuster but rather than being left stranded on deck with not enough lifeboats, some clients are quite prepared to accept the penalty.
Transferring away from a with-profits fund (why are so many Equitable clients, even the younger ones, in withprofits?) into a soundly managed unit linked fund, especially while equity markets are so low, offers clients the chance to make up any losses and then to steam ahead in the future.
There are plenty of ships seeking passengers who have taken, and will continue to take, the necessary action to legislate for, and navigate around, those icebergs.
Temple Court UK Ltd,