29th June 2010
The Financial Services Consumer Panel has expressed grave concern at the findings of the FSA’s with-profits review published today.
Adam Phillips, Consumer Panel Chair commented:
“We are seriously concerned that, although the FSA introduced the current regime for with-profits in 2005, this report shows that policy-holders are still not being treated fairly by the FSA’s own measures.
The Consumer Panel published a report in 2007 which highlighted problems in the governance of with-profits funds and the way firms communicate with policyholders. This review confirms that significant problems still exist, despite previous warnings from the FSA in “Dear CEO letters” and other communications.
There are 25 million with-profits policies currently being used for pensions and other savings. It is totally unacceptable that firms’ failure to play by the rules is still potentially exposing substantial numbers of consumers to risk.
We have said for some years that the rules are inadequate, and this report shows that firms are not even conforming to those rules. The FSA has announced a further consultation at the end of this year. In the meantime, we welcome the FSA enforcement investigation against the worst offenders, and encourage urgent follow through on today’s commitment to more intensive supervision of the current rules.”
Notes to editors
Adam Phillips, Consumer Panel Chair’s biography and photographs.
- The Consumer Panel is a statutory body under the Financial Services and Markets Act 2000 and was initially established by the Financial Services Authority in December 1998. The Panel advises the FSA Board on the interests and concerns of consumers and reports on the FSA's performance in meeting its objectives.
There are currently eleven members of the Panel as listed below (for further information on individual members, see Who is on the panel)
The emphasis of the Panel’s work is on activities that are regulated by the FSA, although it may also look at the impact on consumers of activities outside but related to the FSA’s remit. What we're doing for consumers explains more about the work the Panel is doing.