The ABI plans to offer a money back guarantee for customers who have been missold a product but only...
The ABI plans to offer a money back guarantee for customers who have been missold a product but only by a direct sales force.
The trade body is putting together a list of promises to consumers which life offices will have to conform to if they are to receive ABI accreditation. These plans are being developed by the Savings And Long Term Risk (SALTR) project, first revealed by Investment Week last November.
As part of these plans accredited life companies will have to refund any management charges and the market value of the investment at the time the life company settles with the customer. At the moment it is not to apply if the customer has been sold the product via an IFA. This could be seen as giving consumers an extra layer of protection when buying through a direct sales force.
It has also brought into question any unfair advantages this may give companies which have a predominant direct sales force versus an IFA-distribution company.
Justin Modray, an IFA with Chase de Vere said it could have a more positive effect than this, by raising the importance of advice in the public eye.
The SALTR standards concern clarity and comparability of information, appropriateness of the product purchased and customer service.
Under appropriateness of the product, SALTR promises that consumers will only be advised to buy products that consumers need. If at any time it is clear that investors was inappropriately advised they will be entitled to a refund.
It is not clear how this will interact with IFA distribution, although the minutes of a SALTR meeting held 9 November stated that this is one of the key subjects of discussion for the IFA committee being formed to take part in SALTR.
In the 13 December issue of Investment Week the ABI stated that representatives of SALTR along with individual IFAs and AIFA members, will form a committee to discuss the implications of some of the standards being developed.
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