FSA to probe IFA advice problem

dunstonh

ReportInvestor wrote:

Another dh classic on With Profits .

Do you laugh at your own jokes? I hope so, at least you get one laugh that way.

What a paranoid misrepresentation.

You just need to read the posts made. Must be a lot of paranoid people here as I get regular PMs from board members commenting on these type threads and asking why Ed is so negative.

Ian_W

ReportInvestor I'm on neither one side, nor t'other, just your average innocent bystander who happens to witness these spats between Ed and dunstonh on a fairly regular basis but what I do notice is how very selective some of the quotes you & Ed choose are.

For example, you describe "Another dh classic on With Profits" but miss off an important part at the end when dh has said, consistently through the thread, that IFA's can't access the info to form a basis to give advice on WPs. The full quote is:

The product is quite straightforward. Its the data behind the scenes that is far more complicated. Especially when you cant get access to it.

I'm not one of the people who has PM'd dh but I agree with those who have, and I can also see when someone is trying to answer the questions in a straightforward manner and having misquotes and part-quotes thrown back at them. A rather lazy and very unconvincing tactic used by hack barristers IM experience.

ReportInvestor

But that's what the Telegraph article & Ed and dunstohn are all saying. IFAs (and their clients) are up the creek without the information. That emboldened omission you cite was not selective quoting by me. It is part of the case that IFAs are unable to advise effectively on With Profits.

dh needs to get back to this arguments in this thread.

I have a friend whose IFA is embarrassed about advising her to take out a Standard Life WP Bond.

He has suggested to her that it will be alright on the night because a windfall of up to £15K is in prospect. Recent press reports suggest the average windfall could be as low as £1K

Woeful ignorance or embarrassed misrepresentation by the IFA? What do you think?

Either way it supports what the Telegraph and Ed are saying.

Ian_W

ReportInvestor wrote: It is part of my case.

Ah, so you are a dodgy barrister then!! :rotfl:

Ian_W

Lest anyone thinks I'm misquoting ReportInvestor, the words quoted were there when I started the post, but were obviously part of the edit pre my post being completed.

My point being that if you attempt to ridicule someone's post - don't do it on the basis of a highly selective quote. IT AIN'T BIG & IT AIN'T CLEVER imho.

BTW, I didn't altogether think the Telegraph and Ed were saying exactly the same things!

ReportInvestor

There was quite a big gap between the IFA spokesman in the Telegraph and dh.

Association_of_IFAs_in_the_Telegraph wrote:

If individuals go to their IFAs and ask for advice on with-profits funds they will get it, and if the IFA believes that is not his normal area of expertise then he will usually refer the customer to someone in his firm who is an expert in that field."

Whereas dh accepted that they couldn't advise in many cases because of lack of information available to the IFA and lifelong liability if they did advise wrongly. (Neither Ed nor the Telegraph blamed IFAs for not being in a position to know.) Effectively Ed and dh both agree :eek: that the IFA spokesman is glossing over the truth. We will have to wait for the FSA report to confirm.

Rereading the thread in the morning it seems to me that the main fault of dh's first response was to ignore the word "could" in Ed's summary.

The Investors Association has tried to be of help in the area of provision of information, for individuals and IFAs.

One of our members has attempted to use the Freedom of Information Act to get disclosure of closed WP fund performance, but the FSA bizarrely upheld objections on the grounds of commercial confidentiality - even though closed funds, by their nature, are not trying to sell new business. At least it identified to the FSA that investors (and IFAs) need information on which to base difficult decisions.

IA Link - Campaigner lifts lid on with profits performance (He did succeed in getting [voluntary] disclosure at 5 more firms)

EdInvestor

Oh dear.:( Perhaps I can be of assistance to all these unfortunate IFAs who don't have the information to help their clients with their With profits policies.

If you put the letters "PPFM" into Google ( can we assume the IFAs know what Google is?) then you will be taken to pages of links to all the insurance companies compulsory documents detailing the "Principles and Practices of Financial Managemt" applied to their With profits funds.These are normally published on their websites.

At the bottom of page 2, you'll see the link to the FSA's page on PPFM as follows:

Consumer Updates

Principles and Practices of Financial Management (PPFM)


What is a PPFM?

PPFM stands for 'Principles and Practices of Financial Management'. It's a document that all with-profits insurers (including those that have closed their with-profits funds to new business) must produce and it describes how they run their with-profits business. Insurers must make their PPFM publicly available.

Why do firms have to produce a PPFM?

How much policyholders receive from their with-profits policies can be heavily influenced by an insurer's internal decisions and its use of discretion. However, these factors are not normally described in any detail. Producing and making available the PPFM will mean that policyholders, their advisers and market commentators are better able to understand how with-profits policies operate and what to expect from them. The PPFM should also enable insurers to control and manage their with-profits business better.


What has to be covered in a PPFM?

The PPFM is expected to cover any issue that has, or may have, a significant impact on how a with-profits insurer runs its with-profits business. Those issues will include how the insurer decides its annual and final bonuses, how it forms its investment strategy, how it applies charges and expenses and how it manages its inherited estate (if any).


....and so on.


I hope this helps.

dunstonh

If you really think that a PPFM is suitable then it really does highlight what little you know about these things.

Still not sure what your continued biased attacks on IFAs have to do with this website though.

EdInvestor

PPFMs not good enough?

How about some financial strength ratios then? Something like this?

Free information from Nottingham Business School


BTW the last time I asked, Cazalet's annual Life book cost about 800 quid.It's probably gone up a bit since then, but I'm a bit surprised to hear you can't afford that.The other day you commented that an annual salary of 50k was low for an IFA.

I'm sure the book would be seen as a claimable business expense.

jem16

EdInvestor,

I'm really a novice here when it comes to Endowment type policies, investments and pensions and would expect to ask advice from IFAs. However reading your many threads on various forums you seem to be very against IFAs and seem to be suggesting not to trust their advice.

Can I ask why? Have you had bad advice?