http://www.independent.co.uk/news/business/news/bank-admits-to-errors-in-its-forecasting-2118402.html
The deputy governor of the Bank of England, Charles Bean, has admitted that the recession "highlighted shortcomings" in the Bank's economic forecasting models.
He said that even had the Bank considered the possibility that the economy could shrink by more than 6 per cent, as actually happened, the Bank would have put the chances as being "virtually negligible".
"One would need to be endowed with perfect foresight to have been able to predict how the financial crisis would unfold, spilling over from one institution to another, and from one market to another," he added. "Who knows what would have happened if, for instance, Lehman Brothers had successfully found a buyer that weekend in September 2008?"
Is he saying that nobody can see into the future?
These will be the top dogs in regulatory circles, they have all the power, the knowledge and the data yet they can’t be held accountable for their failure to forecast problems.
Yet, the regulators pillory small IFAs for not being able to forecast changes which took place after they gave advice in good faith under what was known as a “reasonably held opinion” many years ago.
Showing posts with label FSA. Show all posts
Showing posts with label FSA. Show all posts
Thursday, October 28, 2010
Thursday, October 14, 2010
Hoban backs RDR move to fees - IFAonline
Hoban backs RDR move to fees - IFAonline
I can see where he is coming from.
But can he see where he is going to?
Yes there are problems with commission, there are also problems with fees, even if the advice was free there would be issues.
The RDR misses the target and the man with the crossbow is using a blindfold.
Top down regulation has failed, is failing and will forever fail.
Until what the consumer needs is the driving force behind regulation the efforts of Mr Hoban and his successors are doomed to failure, unfortunately it is society which pays the price for the failure of their elected representatives.
I can see where he is coming from.
But can he see where he is going to?
Yes there are problems with commission, there are also problems with fees, even if the advice was free there would be issues.
The RDR misses the target and the man with the crossbow is using a blindfold.
Top down regulation has failed, is failing and will forever fail.
Until what the consumer needs is the driving force behind regulation the efforts of Mr Hoban and his successors are doomed to failure, unfortunately it is society which pays the price for the failure of their elected representatives.
Saturday, October 9, 2010
Update from Mike Fenwick
Before my more detailed comments, I wish to place on record my sincere thanks to two people - Evan Owen and Rod Leonard for the support they have given me, whilst I carried out the research against which I make the comments below.
The jury is out on whether I should thank them for encouraging me back into a world of regulatory insanity, one that I thought I had left - altho' in more recent posts here, you will have seen me say that I had started and intended to continue.
Let me first make this distinction - it is something I recorded in a very early post on here - I do not believe that all IFAs, and their actions can be defended, I do however believe in financial advice which is truly independent.
You may not have seen this article in Money Marketing:
http://www.moneymarketing.co.uk/adviser-news/ifas-must-break-the-pattern-of-top-down-financial-hierarchy/1018926.article
It was as Evan commented, edited from the draft I sent to MM, but it does contain two sentences which I wish to highlight - these:
As an IFA, think of the FSCS. Your survival requires you to account for your own liabilities but also pay for the failures (undetected by the regulators) of everyone else. Similarly, the public must cough up for its own liabilities and for the failures (again undetected) of the banks.
There can be no IFA who is unaware of the issues over the costs of the FSCS etc etc.
Equally there can be nobody in the UK who is unaware of the costs arising from the collapse of the Banks.
They are both issues where the innocent are asked to pay for the costs of the guilty.
I have another article to prepare for MM - in which I will start to offer suggestions as to how the FSCS could be totally reformed - apologies, but details have to wait until I have agreed the position with MM.
Now, I doubt whether most, if not all, IFAs would understand why I am targeting the issue of bank charges, but there is for me a very valid reason and it ties in with the distinction I drew above.
Good IFAs take on the problems of their clients, and broker their clients through the complexities of the financial world - it is that in that performance that they have value and add value.
In time I will attempt to show how by targeting one issue, in this case Bank charges, it is possible for IFAs, by resolving that issue for others, they can also address the issues they themselves face.
Are they same issues?
Well, here is an extract:
Referring to both the OFT and the FSA, and in particular to the waiver issued by the FSA, I ended my last post with this question:
What is it in the nature of their relationship, that allows them:
- complete control over the rights to justice of ordinary people,
- and the power to halt Courts of Justice stone dead in their tracks! Something not even Governments find easy to do.
Do IFAs feel that the FSA have complete control over their rights to justice?
Do IFAs feel that the FSA and the FOS can halt the Courts of Justice stone dead in their tracks?
And yet in that extract - I am not writing about IFAs directly, but about the millions of ordinary members of the public who have been denied their rights on this issue of bank charges.
Where is that extract from? A blog I am writing which can be found here:
http://notproven.blogspot.com/
The blog is very much work in progress, and I wish to see it finished asap. Then I will advocate the next steps - for those who are interested in restoring some sanity to the world of regulation, for themselves, AND the wider public.
Mike ...
PS: The FSA, OFT, Treasury Select Committee and others have been made aware of the blog, and whilst not yet complete I am now extending the list of those who I think need to be made aware of its existence. If any of you who are reading this post wish to advise others (who may not be on this IFADU list) of its content, please feel free to do so.
The jury is out on whether I should thank them for encouraging me back into a world of regulatory insanity, one that I thought I had left - altho' in more recent posts here, you will have seen me say that I had started and intended to continue.
Let me first make this distinction - it is something I recorded in a very early post on here - I do not believe that all IFAs, and their actions can be defended, I do however believe in financial advice which is truly independent.
You may not have seen this article in Money Marketing:
http://www.moneymarketing.co.uk/adviser-news/ifas-must-break-the-pattern-of-top-down-financial-hierarchy/1018926.article
It was as Evan commented, edited from the draft I sent to MM, but it does contain two sentences which I wish to highlight - these:
As an IFA, think of the FSCS. Your survival requires you to account for your own liabilities but also pay for the failures (undetected by the regulators) of everyone else. Similarly, the public must cough up for its own liabilities and for the failures (again undetected) of the banks.
There can be no IFA who is unaware of the issues over the costs of the FSCS etc etc.
Equally there can be nobody in the UK who is unaware of the costs arising from the collapse of the Banks.
They are both issues where the innocent are asked to pay for the costs of the guilty.
I have another article to prepare for MM - in which I will start to offer suggestions as to how the FSCS could be totally reformed - apologies, but details have to wait until I have agreed the position with MM.
Now, I doubt whether most, if not all, IFAs would understand why I am targeting the issue of bank charges, but there is for me a very valid reason and it ties in with the distinction I drew above.
Good IFAs take on the problems of their clients, and broker their clients through the complexities of the financial world - it is that in that performance that they have value and add value.
In time I will attempt to show how by targeting one issue, in this case Bank charges, it is possible for IFAs, by resolving that issue for others, they can also address the issues they themselves face.
Are they same issues?
Well, here is an extract:
Referring to both the OFT and the FSA, and in particular to the waiver issued by the FSA, I ended my last post with this question:
What is it in the nature of their relationship, that allows them:
- complete control over the rights to justice of ordinary people,
- and the power to halt Courts of Justice stone dead in their tracks! Something not even Governments find easy to do.
Do IFAs feel that the FSA have complete control over their rights to justice?
Do IFAs feel that the FSA and the FOS can halt the Courts of Justice stone dead in their tracks?
And yet in that extract - I am not writing about IFAs directly, but about the millions of ordinary members of the public who have been denied their rights on this issue of bank charges.
Where is that extract from? A blog I am writing which can be found here:
http://notproven.blogspot.com/
The blog is very much work in progress, and I wish to see it finished asap. Then I will advocate the next steps - for those who are interested in restoring some sanity to the world of regulation, for themselves, AND the wider public.
Mike ...
PS: The FSA, OFT, Treasury Select Committee and others have been made aware of the blog, and whilst not yet complete I am now extending the list of those who I think need to be made aware of its existence. If any of you who are reading this post wish to advise others (who may not be on this IFADU list) of its content, please feel free to do so.
Reforming the Regulators - Adam Smith Institute
'..the annual cost of regulation to the British economy was an astonishing 10–12 per cent of GDP.....The economist Elaine Sternberg has observed that: ‘Regulation is typically part of the problem, not the solution. ..........One of the reasons for the failure of the regulatory agencies is the nebulous accountability regime. A House of Lords Select Committee inquiry into market regulators concluded that, paradoxically, they are accountable to everyone and no one.... Regulators should draw up strategic plans for reverting first to having only an economic, competitive market creating, role, and then their own demise. The costs of new non-economic regulation should be transferred to national or local government. Following the closure of each regulator, its remaining responsibilities should be transferred to the OFT.
Reforming the Regulators
Reforming the Regulators
Saturday, October 2, 2010
More than 7,000 complaints lodged against banks every day - Telegraph
More than 7,000 complaints lodged against banks every day - Telegraph
Once upon a time a banker told me they built in "complaints shrinkage" of more than 5% of all new business, a bit like shops and shoplifting but more perverse, yes it is par for the course but the fact is that 90% of those who might have a valid complaint are too afraid to risk losing their 'facility'. As one recent complainant to saverjustice said: "the man at the call centre asked me if I wanted to make the complaint 'formal' and if i did it woudl be best to find another bank who would take me in, he suggested the Co-Op". let's look at this carefully, the FSA rules say that a complaint is an expression of disatisfaction whether made orally or in writing, the bank rep wanted the complainant to make it "formal" which means the banks own "rules" do not comply with the regulations. When I met the FSA I asked how many FSA staff supervise the banks the lady said "we have sixteen people supervising Barclays and they only look at the prudential requirements". I was stunned, still am, how on earth can the FSA ensure that the sales processes and complaints handling of the banks is up to its standards (whatever they are on a given day) when they only have sixteen people supervising a bank with more than 50,000 employees all on targets and bonuses?
To me the FSA loks like the local police force, they use up all their resorces on paperwork and easy targets, in the FSA's case it is the small IFA firms who as it happens 'generate' a tiny fraction of teh complaints.
Regulation is bust, society is in dire need of regulatory balance, I see less each day.
By the way, I am a regulatory consultant with almost three decades of experience in bad regulation created by bad government policy, blame the people you vote for and the 'architects' they employ who created every duff regulator to date and will create the next one.. oh and the same regulators (people) who have been around as long as I have.
Once upon a time a banker told me they built in "complaints shrinkage" of more than 5% of all new business, a bit like shops and shoplifting but more perverse, yes it is par for the course but the fact is that 90% of those who might have a valid complaint are too afraid to risk losing their 'facility'. As one recent complainant to saverjustice said: "the man at the call centre asked me if I wanted to make the complaint 'formal' and if i did it woudl be best to find another bank who would take me in, he suggested the Co-Op". let's look at this carefully, the FSA rules say that a complaint is an expression of disatisfaction whether made orally or in writing, the bank rep wanted the complainant to make it "formal" which means the banks own "rules" do not comply with the regulations. When I met the FSA I asked how many FSA staff supervise the banks the lady said "we have sixteen people supervising Barclays and they only look at the prudential requirements". I was stunned, still am, how on earth can the FSA ensure that the sales processes and complaints handling of the banks is up to its standards (whatever they are on a given day) when they only have sixteen people supervising a bank with more than 50,000 employees all on targets and bonuses?
To me the FSA loks like the local police force, they use up all their resorces on paperwork and easy targets, in the FSA's case it is the small IFA firms who as it happens 'generate' a tiny fraction of teh complaints.
Regulation is bust, society is in dire need of regulatory balance, I see less each day.
By the way, I am a regulatory consultant with almost three decades of experience in bad regulation created by bad government policy, blame the people you vote for and the 'architects' they employ who created every duff regulator to date and will create the next one.. oh and the same regulators (people) who have been around as long as I have.
Thursday, September 30, 2010
Special report: Inside Britain's deathbonds scandal | Reuters
Special report: Inside Britain's deathbonds scandal | Reuters
Why is the FSCS paying out (with some uncertainty) on Keydata - Lifemark "investments" when in the opinion of many in the case of adviser involvement the advice was flawed in the first place?
Is it fair and reasonable that Independent Financial Advisers (IFAs) who avoided these products for good reason should compensate the customers of those who did sell these esoteric and opaque "investments"?
Why is the FSCS paying out (with some uncertainty) on Keydata - Lifemark "investments" when in the opinion of many in the case of adviser involvement the advice was flawed in the first place?
Is it fair and reasonable that Independent Financial Advisers (IFAs) who avoided these products for good reason should compensate the customers of those who did sell these esoteric and opaque "investments"?
Wednesday, September 29, 2010
FT.com / Personal Finance - Keydata investors can claim compensation
FT.com / Personal Finance - Keydata investors can claim compensation
"Eligible"
"Redress not yet quantified"
"Marketing Material" - most cases were based on advice.
"Eligible"
"Redress not yet quantified"
"Marketing Material" - most cases were based on advice.
Monday, September 20, 2010
Keydata compensation conumdrum
Who dunnit? Lots of people blame Stuart Ford, but is that right? Was it he who designed the products? His family trust has a large collection of these life settlements which used to be called "Viatical Settlements", he proposed a 'rescue' package which was rejected by the Financial Services Authority, it is reported that an FSA spokeperson said Ford was under investigation, does this preclude Ford from attempting to 'rescue' the investors?
Who pays? Most people expect the Financial Services Compensation Scheme (FSCS) to pay out because that is what the fund is for, but is that right? Why should IFAs who avoided these products be expected to pay for the acts or ommissions of those who did?
Who else can pay? Those who bought direct from Keydata are up a gumtree, those who were advised may have a claim against the adviser who sold them the bond/plan, the FOS award it twice that of the FSCS payout but if an IFA goes bust because of the claims then the FSCS pays out, supposedly.
The key is what decision does the FSCS arrive at? To pay or not to pay, that is the question. If it decides this week that it won't pay out then the likes of Norwich and Peterborough Building Society (N&P) will face a barrage of complaints either directly or via Gareth Fatchett and Regulatory Legal. If N&P has professional indemnity insurance then that will take the biggest burden of cost above the level of excess. If it doesn't have insurance the members will have to pay.
For small IFAs the story is quite different, they will be hoping the FSCS pays out but what about their PI insurance? What about the claims above the FSCS limit?
Is this what regulation is all about? Is this what consumers expect to happen when such a comprehensive regulatory regime is created by the people they elected to Parliament?
Who pays? Most people expect the Financial Services Compensation Scheme (FSCS) to pay out because that is what the fund is for, but is that right? Why should IFAs who avoided these products be expected to pay for the acts or ommissions of those who did?
Who else can pay? Those who bought direct from Keydata are up a gumtree, those who were advised may have a claim against the adviser who sold them the bond/plan, the FOS award it twice that of the FSCS payout but if an IFA goes bust because of the claims then the FSCS pays out, supposedly.
The key is what decision does the FSCS arrive at? To pay or not to pay, that is the question. If it decides this week that it won't pay out then the likes of Norwich and Peterborough Building Society (N&P) will face a barrage of complaints either directly or via Gareth Fatchett and Regulatory Legal. If N&P has professional indemnity insurance then that will take the biggest burden of cost above the level of excess. If it doesn't have insurance the members will have to pay.
For small IFAs the story is quite different, they will be hoping the FSCS pays out but what about their PI insurance? What about the claims above the FSCS limit?
Is this what regulation is all about? Is this what consumers expect to happen when such a comprehensive regulatory regime is created by the people they elected to Parliament?
Wednesday, April 1, 2009
Principles based regulation
The FSA's "principles-based" approach will go, said Hector Sants, because it doesn't work on people who have no principles.
It also won't work when the regulators have no principles.
Court out
Nicole Blackmore 01-Apr-2009
The FSA and the life offices caught up in the Lautro debacle have a long month ahead of them while they wait for the High Court to consider the appeal against naming those involved.
But the battle, which to date the FSA has fought for over four years and no doubt spent vast sums of industry money on, looks likely to rumble on long after the High Court's decision.
The regulator is clearly keen to avoid naming and shaming the guilty parties, which could open up a potential barrage of claims from advisers that have been made to pay compensation to clients.
The case stems from a Freedom of Information request by IFA Defence Union chairman Evan Owen in January 2005. The Information Commission ruled in August 2007 that the FSA had to name the endowment mortgage providers which misused Lautro projections in setting premiums, meaning customers were given unrealistically high maturity figures.
Advisers say unrealistic projections led many consumers to complain about endowment shortfalls that were exaggerated or non-existent, which led to misselling payouts that would not have occurred if the projections were correct.
In October the Information Tribunal rejected the FSA’s argument that the Information Commissioner did not have the right to order the publication of the names of businesses involved.
In court this week, Justice Munby considered new closed evidence which refocused the FSA’s argument on Section 348 of the Financial Services and Markets Act.
The regulator’s lawyer claims that its hands are tied and under FSMA there is no way possible for them to disclose the information because of its confidential nature. This is difficult to swallow.
Owen says the FSA is protecting the life offices. It’s hard to see it any other way.
He says: “The FSA has dragged this out so that the two-year time limit on third party contribution claims has run out. The FSA is protecting the life offices and I want to know if it will give IFAs extra time to claim if its appeal is not upheld.”
I wonder how confidential an IFA’s misselling would remain if information proving their misconduct came to be in the regulator’s hands?
Source: Money Marketing.
My thoughts exactly.
Evan Owen
The IFA Defence Union
It also won't work when the regulators have no principles.
Court out
Nicole Blackmore 01-Apr-2009
The FSA and the life offices caught up in the Lautro debacle have a long month ahead of them while they wait for the High Court to consider the appeal against naming those involved.
But the battle, which to date the FSA has fought for over four years and no doubt spent vast sums of industry money on, looks likely to rumble on long after the High Court's decision.
The regulator is clearly keen to avoid naming and shaming the guilty parties, which could open up a potential barrage of claims from advisers that have been made to pay compensation to clients.
The case stems from a Freedom of Information request by IFA Defence Union chairman Evan Owen in January 2005. The Information Commission ruled in August 2007 that the FSA had to name the endowment mortgage providers which misused Lautro projections in setting premiums, meaning customers were given unrealistically high maturity figures.
Advisers say unrealistic projections led many consumers to complain about endowment shortfalls that were exaggerated or non-existent, which led to misselling payouts that would not have occurred if the projections were correct.
In October the Information Tribunal rejected the FSA’s argument that the Information Commissioner did not have the right to order the publication of the names of businesses involved.
In court this week, Justice Munby considered new closed evidence which refocused the FSA’s argument on Section 348 of the Financial Services and Markets Act.
The regulator’s lawyer claims that its hands are tied and under FSMA there is no way possible for them to disclose the information because of its confidential nature. This is difficult to swallow.
Owen says the FSA is protecting the life offices. It’s hard to see it any other way.
He says: “The FSA has dragged this out so that the two-year time limit on third party contribution claims has run out. The FSA is protecting the life offices and I want to know if it will give IFAs extra time to claim if its appeal is not upheld.”
I wonder how confidential an IFA’s misselling would remain if information proving their misconduct came to be in the regulator’s hands?
Source: Money Marketing.
My thoughts exactly.
Evan Owen
The IFA Defence Union
Friday, March 13, 2009
Hector Sants says be afraid of the FSA
A bank director who pays no personal price for being wrong is unlikely to be afraid of the regulators, if he messes up he keeps his vast personal wealth and can move on to another institution where his incompetence can wreak havoc once more.
For IFAs it is another matter altogether, the constant fear of losing his business, his home and in many cases his family is a draining experience. If Mr Sants wonders why we at IFADU are so aggressive he should consider the reasons why.
IFAs are not a threat to the financial system yet they receive a disproportionate amount of attention while the real and present danger of greedy bankers has brought our economy to its kneees.
For IFAs it is another matter altogether, the constant fear of losing his business, his home and in many cases his family is a draining experience. If Mr Sants wonders why we at IFADU are so aggressive he should consider the reasons why.
IFAs are not a threat to the financial system yet they receive a disproportionate amount of attention while the real and present danger of greedy bankers has brought our economy to its kneees.
Monday, January 5, 2009
FSA to end short selling ban
To retain the ban would have been market manipulation of the worst kind, we need mechanisms which expose over inflated equity valuations. If the government are in denial in a bear market this is no solution to their ills. The FSA should prove without doubt that it is, as is claimed, independent of political influence, this is one example where they have shown that John McFall is not entitled to have his own way.
Wednesday, November 5, 2008
GABRIEL - FSA financial reporting
Open letter to Hector Sants
Why has the FSA forced the IFA community to act as Beta testers for a piece of software that is, at this moment in time, not fit for purpose?
If sufficient testing was done then the testers have been negligent. If it was not done then the individual(s) who authorised the launch have been negligent. Who is responsible and why, until the system is working, have they simply not reverted to using the previous system?
Surely, as a test, data could have been transferred from one system to another.
The use of computerised data input is supposed to save time on both sides i.e. the FSA and the adviser community. The waste of adviser time does not appear to have been factored in and no one is taking responsibility. No explanation is being given and no time scale for when the system will be up to speed.
Is it a software problem or a hardware problem? 'Due to a high level of demand' is given as the reason. If this is indeed the correct explanation. Who is responsible for this poor forecasting of demand?
Evan Owen
IFA Defence Union
How does the introduction of GABRIEL comply with section 7 of the Statutory Code of Practice for Regulators.
7. Information requirements
Hampton Principle: Businesses should not have to give unnecessary information or give the same piece of information twice.
Effective regulatory work, including risk assessment, requires accurate information. However, there are costs to its collection both to the regulator
and to regulated entities. It is important to balance the need for information with the burdens that entails for regulated entities. As such, regulators must
have regard to the following provisions when determining general policies or principles or when setting standards or giving general guidance on data
requirements.
7.1 When determining which data they may require, regulators should undertake an analysis of the costs and benefits of data requests to regulated entities. Regulators
should give explicit consideration to reducing costs to regulated entities through:
• varying data requests according to risk, as set out in paragraph 4.3;
• limiting collection to specific regulated entities sectors/sub-sectors;
• reducing the frequency of data collection;
• obtaining data from other sources;
• allowing electronic submission; and
• requesting only data which is justified by risk assessment.
7.2 If two or more regulators require the same information from the same regulated entities, they should share data to avoid duplication of collection where this is
practicable, beneficial and cost effective. Regulators should note the content of the Information Commissioner’s letter11when applying the Data Protection Act 199812 in
order to avoid unnecessarily restricting the sharing of data.
7.3 Regulators should involve regulated entities in vetting data requirements and form design for clarity and simplification. They should seek to collect data in a way that is
compatible with the processes of regulated entities and those of other regulators who collect similar data.
Why has the FSA forced the IFA community to act as Beta testers for a piece of software that is, at this moment in time, not fit for purpose?
If sufficient testing was done then the testers have been negligent. If it was not done then the individual(s) who authorised the launch have been negligent. Who is responsible and why, until the system is working, have they simply not reverted to using the previous system?
Surely, as a test, data could have been transferred from one system to another.
The use of computerised data input is supposed to save time on both sides i.e. the FSA and the adviser community. The waste of adviser time does not appear to have been factored in and no one is taking responsibility. No explanation is being given and no time scale for when the system will be up to speed.
Is it a software problem or a hardware problem? 'Due to a high level of demand' is given as the reason. If this is indeed the correct explanation. Who is responsible for this poor forecasting of demand?
Evan Owen
IFA Defence Union
How does the introduction of GABRIEL comply with section 7 of the Statutory Code of Practice for Regulators.
7. Information requirements
Hampton Principle: Businesses should not have to give unnecessary information or give the same piece of information twice.
Effective regulatory work, including risk assessment, requires accurate information. However, there are costs to its collection both to the regulator
and to regulated entities. It is important to balance the need for information with the burdens that entails for regulated entities. As such, regulators must
have regard to the following provisions when determining general policies or principles or when setting standards or giving general guidance on data
requirements.
7.1 When determining which data they may require, regulators should undertake an analysis of the costs and benefits of data requests to regulated entities. Regulators
should give explicit consideration to reducing costs to regulated entities through:
• varying data requests according to risk, as set out in paragraph 4.3;
• limiting collection to specific regulated entities sectors/sub-sectors;
• reducing the frequency of data collection;
• obtaining data from other sources;
• allowing electronic submission; and
• requesting only data which is justified by risk assessment.
7.2 If two or more regulators require the same information from the same regulated entities, they should share data to avoid duplication of collection where this is
practicable, beneficial and cost effective. Regulators should note the content of the Information Commissioner’s letter11when applying the Data Protection Act 199812 in
order to avoid unnecessarily restricting the sharing of data.
7.3 Regulators should involve regulated entities in vetting data requirements and form design for clarity and simplification. They should seek to collect data in a way that is
compatible with the processes of regulated entities and those of other regulators who collect similar data.
Tuesday, October 14, 2008
IFAs not on a level regulatory playing field
IFAs have been suffering under the workload of dealing with complaints relating to projected shortfalls on mortgage endowments and paying compensation for a 'loss' which has not yet materialised. Whether the compensation was paid directly or via the Financial Service Compensation Scheme is irrelevant because in the vast majority of cases the shortfalls were created by the life offices who wish to remain nameless and in the case of Standard Life has refused to make any offers of redress.
The Financial Services Authority claims that all the life offices have paid redress, this is untrue because the FSA's own definition of redress is to place the complainant in the position they would have been had they not purchased the contract and this has not happened. Instead the insurers have used various methods which include 'special bonuses', 'endowment promises' and 'enhanced allocation rates', none of these have assisted IFAs in avoiding overpayment of compensation which is calculated using the surrender value as the datum . This surrender value has been depleted because the premium paid has been much smaller than that required to achieve the target value at maturity so all charges and expenses have had an adverse effect on the smaller investment value.
The FSA also claimed that disclosing the names of the companies would breach their rights under Article 6 and 8 of the Human Rights Act 1998. The Information Tribunal has now dismissed an appeal against an Information Commissioner's decision to disclose the information requested.
The Financial Services Authority claims that all the life offices have paid redress, this is untrue because the FSA's own definition of redress is to place the complainant in the position they would have been had they not purchased the contract and this has not happened. Instead the insurers have used various methods which include 'special bonuses', 'endowment promises' and 'enhanced allocation rates', none of these have assisted IFAs in avoiding overpayment of compensation which is calculated using the surrender value as the datum . This surrender value has been depleted because the premium paid has been much smaller than that required to achieve the target value at maturity so all charges and expenses have had an adverse effect on the smaller investment value.
The FSA also claimed that disclosing the names of the companies would breach their rights under Article 6 and 8 of the Human Rights Act 1998. The Information Tribunal has now dismissed an appeal against an Information Commissioner's decision to disclose the information requested.
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