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Unqualified people hold centre ground

Why should Clare Spottiswoode or anyone else be exempt from being qualified from giving financial advice?

My direct interest in the industry goes back to 1970 when I started with Lynn Insurance Services but my indirect involvement goes way back beyond that because of the need to study the historic basis of life insurance and particularly with-profits funds to pass my ACII exams.

It seems that qualifications count very little in today’s debates as the centre ground is held by unqualified or, at best, poorly qualified commentators on complex subjects.

The reattribution of Aviva’s £4bn orphan funds – I am quoting commentators – is quite simple and why would we need Clare Spottiswoode as an arbitrator/ negotiator if we had a competent regulator to fall back on?

Australian Mutual Provident (AMP) did a great job with reattribution of NPI and Pearl assets, to the point where both companies – and Pearl had the best asset ratio in the business when AMP took over – are scrawny shadows of their former selves. The guts have been ripped out of them. That debacle was overseen by a regulator supposedly competent in ensuring that the consumer got a fair deal.

My own 16-year-term low-cost endowment paid £4,000 less than it was supposed to do in 2004 – no I did not claim compensation, as many others who sold themselves policies did.

Why was my policy short on bonuses when clearly there was £4bn sat in someone’s back pocket?

I still have all my academic books from studying my ACII and poring over their content find a very simple answer to the question of reattribution – 90 per cent of the value belongs to the policyholders and 10 per cent to shareholders.

The only difficulty with sharing it out seems to be which policyholders and when did the shareholders become interested? The answer to the former is all with-profits policyholders in equal shares according to their sum assured and because they were proprietary companies, the shareholders of GA and CU should get 10 per cent.

The records should easily disclose who constitutes the population of either group and I suspect because these were orphan funds, they were not included in the purchase price during any takeover activity.

I can already see raised eyebrows because of the complexity of the problem. Certainly, Clare Spottiswoode and any other advocate should be at least ACII, if not FCII, accompanied by an appropriately qualified and with-profits-experienced actuarial background to be able to negotiate a proper deal for with-profits policyholders and perhaps even send me the £4,000 shortfall from my maturing contract.

There are far too many unqualified individuals passing out other people’s money in the life insurance industry – and that includes pensions – for yet another crop of unqualified, and I assume very well paid, interlopers to feed off the benefits that we sold with a genuine belief in the life insurance and pension industry with-profits principle.

Terry O’Halloran
St James Terrace,


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