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Zurich in pension probe over IRP sales processes

Zurich is facing another pension probe over selling higher-charge policies when stakeholder products could have been more suitable.

The firm claims that it notified the FSA of its concerns over pension sales processes. The regulator is making Zurich review all Allied Dunbar individual retirement plans sold between September 2002 and April 2004 after concerns that salespeople were not adhering to a revised IRP sales process that was introduced in 2002 to combat problems.

Zurich sales advisers were instructed to recommend stakeholder pensions to investors contributing less than £300 a month or £5,000 single premium and not wanting specialist funds.

Zurich is cutting charges on its IRP to resolve the issue rather than transfer clients into stakeholders.

It is removing and rebating its monthly expense deduction where charged and cutting the fund-based charge from 1 to 0.85 per cent, which will bring most in line with stakeholder charges.

Compensation for lost growth on monies paid out in charges will also be added to the policy. The cost of the move to Zurich and the numbers of people affected have not been disclosed.

This is not the first time that Allied Dunbar has had brushes with the regulator. It had to pay out nearly £85m in compensation in 1998 after advising invest-ors in occupational schemes to transfer into its inferior personal pension plans.

Zurich pensions marketing director Richard Taylor says: “We have changed our sales process. There have been no internal disciplinary procedures against sales staff.”

Roberts Clark director Ashley Clark says: “It is a sorry state of affairs, given the current compliance risk environment we all work in and it is amazing that a big provider such as Zurich would have standards in place but no systems in place to monitor them.”

The FSA would not comment on whether the company faces a fine.

Saran Allott-Davey won the third IFA Woman of the Year award last week. Allott-Davey, who runs her own IFA firm, Heron House Financial Management, also won the best communicator award, sponsored by Money Marketing. She has been running fee-based Heron House in South Wales for 10 years. Allott-Davey is pictured here with Women’s IFA Group founder Fiona Price (right) receiving her award at the Wig awards dinner in London’s Docklands.•Picture special, p22


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