I believe there is a serious regulatory loophole which has existed for some time.
The point is best illustrated by an example. NPI in the early 1990s became the biggest providers of 90/10 SSASs. The directors select portfolio combined a 90 per cent contribution to an executive pension plan with NPI and a 10 per cent contribution to a unit trust provider.
It was marketed by NPI as a product which secured ll the advantages of a true SSAS without the actuarial and trustee fees normally associated.
The product was successful due to the advantages of establishing a true SSAS without the normal costs involved. The majority of portfolios were never converted to full SSASs and remained fully insured.
AMP Trustee Services has now imposed fees in relation to the day-to-day management of the portfolio.
Clients had decided to establish a policy with high capital unit charges on the basis that they would secure an SSAS facility with no trustee/actuarial fees payable. Now the insurance company has removed what was the key benefit and selling point of the plan.
The key issue here is that virtually all directors select portfolios, due to the nature of the arrangement, were sold via IFAs.
The regulatory loophole relates to the absence of any regulatory framework in relation to complaints by IFAs to insurance companies.
There is no requirement on the part of insurance companies to adhere to any principles in relation to handling IFA complaints and there is no regulatory recourse for the IFAs.
Portfolio Management Services,