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View the article online at http://citywire.co.uk/wealth-manager/article/a743529

FCA on 'zombie' fund probe: we won't review 30 million policies

by Dylan Lobo on Mar 28, 2014 at 15:02

FCA on 'zombie' fund probe: we won't review 30 million policies

The Financial Conduct Authority has confirmed it intends to launch an investigation into the sale of old closed insurance policies.

The investigation into these 'zombie' funds will cover pensions, endowments, life insurance policies and investment bonds sold in the UK between the 1970s and 2000.

There are around 30 million policies in this market, which is worth around £150 billion.

In a statement sent out on Friday afternoon, following a sell-off that has hit a number of insurers, the financial watchdog said: 'We will be looking at how people in closed accounts are being treated.

'These accounts have been closed for many years in some cases, but there are still valid issues to be looked at around the question of the service that consumers receive in relation to those accounts. Are they getting the right information? Are they getting the right level of service? Are these investments still appropriate?'

However, the FCA stressed it would not examine each individual policy and force new rules retrospectively.

'We are not planning to individually review 30 million policies, nor do we intend to look at removing exit fees from those policies providing they were compliant at the time.  

'This is not a review of the sales practices for these legacy customers and we are not looking at applying current standards retrospectively – for example on exit charges.'

It added: 'This work will commence in the summer and we will be speaking to firms about how we can undertake that review. As a forward looking regulator, we want to examine areas that are of interest and relevance to consumers and to firms and assess whether there is an issue that requires any action. No conclusions have been reached as work has not started.'

The financial watchdog will reveal more details of its investigation when it publishes its business plan on 31 March.

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3 comments so far. Why not have your say?

Anonymous 1 needed this 'off the record'

Mar 28, 2014 at 15:35

Idiots ! If they are NOT going to enforce retrospective changes then why bother ? I can't see how they can possibly review any policy written prior to 1987. All this misguided policy has done is to cause Massive market sell offs. Monkeys and breweries comes to mind

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Badders

Mar 28, 2014 at 16:31

Perhaps they should probe themselves for causing false markets.

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sgjhaghsdg

Mar 28, 2014 at 18:22

I've moved multiple pensions, SIPPs and S&S ISA accounts on a fair few occasions and am in the middle of another round of changes.

Why are people prepared to switch energy suppliers but leave pensions and other investments to moulder?

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