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Two firms face action in with-profits probe

Two with-profits providers have been referred to the FSA’s enforcement division after a review of 17 companies which identified widespread weaknesses.

Last year, the FSA scrutinised how senior management at the with-profits providers had implemented the regulatory regime.

The firms represent around 80 per cent of the with-profits industry. The regulator found the majority did not demonstrate their practices were consistent with well run WP businesses in one or more areas. It identified ineffective governance and “significant weaknesses” in the quality of consumer communications as two main areas of concern.

The FSA says: “Firms have been directed to make immediate changes to their practices across the operation of with-profits funds to better protect policyholders’ interests, in particular to improve governance arrangements and post-sale policyholder communication. We will be monitoring firms’ responses closely and will consider disciplinary actions.”



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There are 10 comments at the moment, we would love to hear your opinion too.

  1. Two with-profits providers have been referred to the FSA’s enforcement division.I have a with-profits pension with Prudential and I have been very disappointed with my bonuses from this company for quite some considerable time.How dare the FSA not name the companies.Is one of them Prudential,I have a right to know along with all my fellow policyholders.They have an independent committee that is supposed to represent the policyholders.I am going to write to Prudential to ascertain what this committee has achieved on our behalf,because from where I am sitting it appears to be absolutely zero.I do hope you post as this is a very important topic and has the right to be aired.

  2. Neil Gillibrand 3rd March 2011 at 3:14 pm

    Any chance that anybody knows which two companies? We do a bit of WP business ad would be interested to see if it’s any of the firms we use!

  3. For God`s sake! For the lsat time please only allow with profits funds to be run by mutual companies. If they have shareholders the term “with profits” should be amended to ” the minority of the profits” simples!

  4. With profits providers being referred to the Enforcement Division? Surely not!!!

    Now, at last, the regulator is actually doing something to protect the public. How times change since the heady days of Equitable Life etal.

  5. Top sceret but it concerns 80% of WP! 3rd March 2011 at 4:17 pm

    Shhhhh its top secret – little bit like the LAUTRO endowmnet shortfall firms! Better to let the adviser pick up the tab for misselling!

  6. Please name the firms – whatever happened to name & shame? Oh yes, can’t ‘split’ on his mates.

  7. Hi Neil Gillibrand

    You will find out soon enough if your clients complain that their returns were not good enough and the FSA tell them to sue you. Endowments all over again. Insurance companies make profits, clients don’t and Bob’s your uncle…. your sued!!!

  8. Sorry Neil, you will have to wait until they go belly up. You can then help us pay the compensation. Things don’t change.

  9. Matthew Sedgley of Independent Financial Solutions 3rd March 2011 at 10:25 pm

    It’s soothing to know the FSA is on rop of things… or do I mean smoothing?!

  10. I know some clients who have been in With Profits bonds and pensions and done extremely well out of it so 2 points
    1. Not all With Profits providers are the same
    2. As long as some IFA isnt churning the plan every 5 years to get a pay day then the fund will give a great bonus -it needs time

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