# Product Provider Responsibility



## Freddie Kruger (30 Jan 2004)

Should product providers be compelled to advise clients in writing of the availability of Endowment Purchasing Companies when they want to surrender a with profit policy?


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## 10romans (1 Feb 2004)

*product providers responsibility*

In a word - Yes

If a provider is committed to financial service for it's customers surely  it would see thhis as the right thing to do.

I would have thought that it would be in the interest of the institution as the policy would continue longer with more premiums going into the fund.

Is this not what you would cal a win win situation?


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## Sober Lark (2 Feb 2004)

*No*

Imagine Ryanair having to tell its passengers that AL has seats cheaper on the particular day they wish to travel.

Imagine the imposition that intermediaries should direct their clients towards low cost operators who will refund them commission on products purchased?

In my opinion where two or more are in the same business and in common strife for the same object then its lunacy to impose such a suggested.


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## 10romans (8 Feb 2004)

hi sober lark,

The question was quite specific about endowment policy encashments not about product sales in general (I agree it is not up to the provider to 'sell' competitor offerings)   

However, dealing with the specifics of endowment encashments, I assume that the provider's interests are best served by continuation of the policy.  Then not alone is it good customer advice but self interest of the provider would suggest that they should advise of endowment purchasing options.   I still see this a win all round.


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## Sober Lark (10 Feb 2004)

Hi 10 Romans. Yes it is in the interests of the provider and remaining policyholders that these contracts run their full term but also remember the mechanism of such policies stipulates that the costs of early termination should be borne by the surrendering policyholder. 

Its not market practice or current regulatory requirements for providers to offer the advice Freddy would like imposed.

All remaining policyholders need to visualise is the possibility of a barage and opening of flood gates to ad hoc retrospective claims to add to their problems.

Present disclosure documentation really only concentrates on the impact of ongoing charges and doesn't have to concentrate on back end termination charges. Is further research suggested? 

Should financial advisers offer the service (best advice and all that) and direct clients towards purchasing companies? Are there any additional issues regarding the paying of commission for this introduction? 

The majority rationalize that it is the responsibility of the consumer to ensure they are getting value for money.


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## Harry (10 Feb 2004)

*Yes*

It is mandatory in the UK under FSA rules that Life Offices direct policyholders to the second hand market which may offer a premium over their surrender quotation. The same rule should be introduced here.


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## 10romans (12 Feb 2004)

*provider responsibilty*

Sober Harry!

Sober - you sound like an insider (i don't mean that as an insult!) not withstanding the technicals of who bears costs, market practice etc it seems to me (nice one harry!) that the brits have the right customer perspective here and they get my vote on this one!


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## Sober (13 Feb 2004)

*the right customer perspective*

But don't we usually follow suit and follow the same road as the Brits -even if it is ten years later?


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