N & P

Risk v Complexity I have to disagree with you about risk. These products are risky, Life settlements are risky. Paste and click and read:- http://www.insurancejournal.com/magazines/west/2005/05/23/features/56156.htm There is no "income" stream from these they have to be paid until death of holder a risk. And a monthly drain on the funds. Then the product holder has to be paid "income" if that is what they wanted from new money introduced to the scheme. And then all the very large fees expenses and other "costs" have to be borne by the scheme in addition. not to mention the lax regulation of this asset class (if any at all). Then there is the real scandal in this that so called IFAs were "encouraged" by their employer to "advise" nearly all of clients funds be used to buy just one product one plan one provider. That is not investing. The client should have been offered a portfolio of assets designed to meet their needs and risk profiles spreading their money over several providers and asset classes.

Posted by: John whipple

Stop arbitrary judgements

Many years ago I worked for a firm called Noble Lowndes (NL), who were then considered to be one of the leading Advisory companies. Within the Group we had a firm of actuaries. A special product was devised between the management of NL and an insurance company, UKPI. UKPI had a very good reputation at the time. In addition our actuaries had given UKPI a clean bill of health. With 3 weeks of the launch of the product UKPI had to be rescued by Friends Provident. It would have been impossible for the advisers within NL to have foreseen this collapse, notwithstanding the high level of in-house competence available, in just the same way that advisers in 2008 could not have foreseen the collapse of Lehman's and Lifemark. If it is contended that advisers should have been in a position to foresee the collapse one would then have to seriously question the competence of both the Bank of England and the FSA - a process that is being fastidiously avoided. Matthew Bullock is absolutely right when he demands that the regulators judge matters on reality. What is it reasonable for an adviser and/or his firm to know. By judging on false criteria the regulators undermine the quality of the market. If clients believe they can claim through retrospective knowledge, advisers will become increasingly conservative in their recommendations, and arguably, cease to provide anything approaching best advice. Real life doesn’t go “by the book” so there has to be some intelligence exhibited by clients, advisers and regulators. Based on experience, it is very difficult to know what criteria the FOS use for their judgements. Contrary to what they believe, arbitrary rulings do not improve the image of the market.

Posted by: Glen McKeown

Regulator

What is the point of having an regulator and indeed paying them, if you cannot then rely on them for due diligence. Being authorised and regulated by the FSA should mean that a firm or provider is 'sound'! Only then does is all make sense.

Posted by: Karen Malin