After beginning its review of with-profits funds in February 2001, the Financial Services Authority have finally disclosed new rules to try and make the products more understandable to consumers, in the form of 'Consumer Friendly Principles and Practices of Financial Management', which gives clearer information concerning penalties for early surrender of policies, costs charged to with profits funds, and the need to manage the fund to meet a target pay out range.
Under the new rules, most of which are due to take effect on 30th June, providers must also provide information to with-profits policyholders within 28 working days of a decision being made. An advocate must also be appointed to protect the interests of policyholders should a company decide to make a 're-attribution of its inherited estate'.
Our view
Anything that helps people understand what they have is bound to be better. In fact, this is why we started .