The Financial Services Authority have admitted that they did not carry out a full pension review style investigation into endowment mis-selling because they could have forced the collapse of life insurers.
In a recent speech in the US, the watchdog said that they faced a conflict between its statutory duties to protect consumers, and promote financial stability after they confessed that they avoided an 'aggressive approach to combat endowment mis-selling' to avoid a wider market crisis. The authority admitted that although a more aggressive approach could have protected the victims of mortgage and investment mis-selling, they could have started a market crisis as many life offices collapsed after funding massive compensation payouts.
Our view
Regrettably, it probably would. The problem also lies with big banks and insurers who have not acted responsibly. Why is it that 95% of all complaints are made against bank and building society advisers? They have dragged the industry down and continue to do so.