Absolute Assigned Policies (AAP) has defended Scottish Widows' decision to set up a link with t...
Absolute Assigned Policies (AAP) has defended Scottish Widows' decision to set up a link with the Association of Policy Market Makers' (APMM) and slammed the severe criticism the life office subsequently sparked from Baronworth Investment Services (BIS).
Traded endowment policy market maker, AAP, branded BIS's criticism as inaccurate and unfair and in some cases 'nonsense'.
Scottish Widows established a link with the APMM to 'help policyholders explore options before surrendering endowment policies'. BIS condemned the decision as 'appalling' and not in policyholders' best interest saying out of a possible 20 market makers only eight are members of the APMM, and of these only a possible three ever received policy details. Instead Baronworth noted its trawling service sent policy details to at least 16 market makers.
Lee Portnoi, Chief executive of AAP and immediate past chairman of the APMM commented: "I asked some of my colleagues in the APMM if they'd heard of BIS and one company hadn't even heard of them.
The members of the APPM and the association itself are all regulated by the FSA. They conservatively represent 80% to 90% of the total turnover in traded endowment policies. Only one of our members admits ever having dealt with Baronworth who claims to deal with 16 market makers. We doubt there are 16 market makers in the market – there may well be 16 purchasers of policies but there are not 16 market makers. BIS may well send out details to market makers, who have absolutely no intention of dealing with them, but they don't actively deal with 16 market makers."
Portnoi reckons Scottish Widows will be delighted to be dealing with the APMM rather than Baronworth or any other trawling operation because the APMM is a non profit making organisation. He said: "Press release information released by BIS is totally inaccurate - BIS stated 'we do not make any charge for our services' – this is untrue – they charge the market maker 3% of the consideration that's paid to the life assured."
Baronworth's claim that only three market makers receive details of policies under the APMM is totally inaccurate argues Portnoi. He said: "Each life company has different criteria and requirements. In some cases they are happy for all of the members to value the policies and to write to the life assured. Other life offices don't want the lifes assured to be bombarded with eight different offers and are happy to have three out of eight which is rotated."
Portnoi rounded off by laying down a gauntlet: "We challenge BIS to give the details publicly of the market makers they deal with – if it is a secret , why is at a secret? – I don't believe they deal with 16, I'd like to see the 16 because I think they would turn round and say 'I haven't dealt with that company for five years' or 'who are they I've never heard of them'."
Office of Tax Simplification review
Achievements, charity work and other happy snippets
Laughable excuses for persisting
Spent 56 years at Schroders