Hi again MH
The concept of Financial strength and claims paying history should not be a "black art" - an analogy could be the reliability data on a specific make of car - or how comprehensive is the warranty offered. *&* have been a shining example of how not to choose a provider based upon the posts on here.
One major point - Financial Services ARE NOT SELF REGULATED (not shouting - just emphasising a point!)
Of all the trades/professions out there:-
Solicitors & Barristers - Self Regulating
Accountants - Self Regulating
Doctors - Self Regulating
Dentists - Self Regulating
But Financial Services is the only one regulated by a specific Government Agency which is totally independent - The Financial Services Authority. (FSA)
So Financial Services is NOT self regulated. If you have a complaint and take it to the FSA, it will be a Civil Servant that deals with it.
In contrast if you complain about your GP - the Doctors "Union" - the BMA would deal with it.
I have always found it interesting that successive governments want to regulate what people do with their money, but are quite happy to let other things like health be regulated by those who have a vested interest NOT to stir things up.
I wonder how long Harold Shipman would have practised if the medical profession was regulated by the medical equivalent of the FSA?
Hi MH
I will give it a go but it is a bit "yawn" inducing! And like most things it is best to see how it all evolved.
Regulation came about after the truly awful Allied Crowbar and Shabby Life sales forces (and others - remember Guardian Royal Exchange!) targeted redundant people to become "advisers". All they were interested in was the individual and his immediate work mates. After that they were sacked.
The turnover of sales staff was truly staggering. In 1994 one of the guys in my office worked out that at the rate Allied Crowbar went thro salespeople, by the year 2001 every male between the age of 30 and 50 would have worked for them at least once.
The advice given was appalling - how could an expensive PPP possibly compare to a Final Salary linked company pension scheme?
But thanks to the Conservative Government of the time (who ran adverts showing an individual shedding the "chains" of his company pension scheme!) the idea seemed to be endorsed by the Government! In fact the Conservative did away with many of the sensible pension rules that previously would have prevented such transfers to take place. (And also could have prevented Maxwell ripping the heart out of the Mirror Group Newspaper Pension Scheme later on.)
As a response to the public outcry at what was a totally reprehensible action by many providers - who had taken on extra staff to deal with the workload! - the Financial Services Act came into force in 1997. This allowed for interim self regulation by Lautro (Man from the Pru etc), Fimbra (IFA's) and IMRO (the Banks & Building Societies).
After a few years the Banks and Building Societies had managed to convince the Government that they did not provide "Financial Services" (!!!) in that they did not offer investment pension protection advice and that a mortgage was not really a financial product despite a mortgage being probably the largest financial commitment an individual ever takes out.
This decision meant that when the Personal Investment Authority (PIA) - the forerunner of the FSA came into force, the Banks and Building Societies neatly circumvented any regulation of mortgages.
And of course what did the Banks and Building Societies do as soon as they succeeded in NOT being regulated? - They immediately went into selling Investments Pensions Protection WITHOUT the same level of regulation as those under Lautro & Fimbra.
Many say that had Mortgages been regulated sooner, the Endowment Misselling Scandal would not be anything like as large a problem as it clearly is.
It was not until the FSA took over from the PIA and the DTI. The PIA regulated the Advice Process and the DTI regulated the providers and tried to ensure that the Life Offices were financially strong and run well.
When the FSA was formed, those Civil Servants from the DTI all picked up their files and walked across to Canary Warf - the new HQ of the FSA where they joined with the existing guys from the PIA.
After a short while, the FSA regulated Mortgage advice (About time too!) and more recently they have brought General Insurance, Stock broking etc. under their regulatory umbrella.
Am I happy that the FSA seems to have got everything under its "umbrella" at last? - Yes very much so - for a long time we have wanted a level playing field. However, the FSA still concentrates on trivia rather than the real issues. The get upset if my files are not presented in a certain way but allow Equitable Life to pull the wool over their eyes and completely misunderstand the Split Caps situation even when the Channel Isles regulator flagged it up with the FSA.
So in answer to your first question - the provider of the advice should not pass you onto the FOS (Financial Ombudsman Service) until they have fully investigated your complaint. If they reject your complaint you have six months to refer it to the FOS.
The ABI is simply the Association of British Insurers. A trade organisation that can censure a member but does not deal with individual complaints. An analogy could be the Motor Traders association?
Q2 - Re Redundancy Protection - Awful plans sold by Banks in the main because up until recently they were not regulated being annually renewable General Insurance plans.
In my view PHI plans are far better but as they are regulated by the FSA the Banks are not interested as dealing with those is too much like hard work. And you might be asked to justify your recommendation!
The problem became so bad that the Consumers Association has taken out a Class Action against the banks on the plans and the way the Banks aggressively sold them before regulation finally applied.
As for suicide - I do not doubt that debt causes some to consider this and some to do it. Unscrupulous lending is a big problem. There was a report in the "Pinks" by a Mortgage brokering firm that reported evidence that clients who they had advised not to take out such a large loan because their earnings were not enough simply walked down the road to another broker or Bank which promptly lent them well over the odds.
Sometime my role includes debt counselling - usually for the son or daughter of a good client and we do this pro bono.
The problem is that we have a debt culture now - and it will only get worse with Students leaving Uni with tens of thousands of GBP debt and 16 year olds being offered Credit Cards.
I also believe the Schools could do more in teaching about debt and how money "works" in a life.
I have met some highly intelligent guys who are well qualified but had no idea what APR really meant and one in particular case a chap asked for my help in that he wanted me to explain to his bank why they had to allow him to, yet again, go thro his overdraft limit as he had maxed out all his credit cards.
If everyone remembered what Mr Micawber said - all would be well.
Hello!!! - Is there anybody there???
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