Central Bank charter for trail commissions

[Duke of Marmalade]

Thanks to @GSheehy for this link to a recent CB Review.
The issue they seem to be out to eliminate are folk languishing in Cash Funds for longer than they intended. Fair enough. But boy have they used a sledgehammer to crack a nut. Life companies should ensure that their customers' needs are regularly reviewed to ensure their policies are still suitable. They are talking about single premium investments. I presume by "still suitable" they mean that the customers' risk/reward metrics haven't changed.
They acknowledge that brokers will be the usual delivery mechanism for this regular review - so please stop criticising trail commission. For example they state "Insurers must ensure that they distribute such products via distribution channels that offer an ongoing service (including a periodic review) to consumers."
But this is all baloney. Life companies are product providers. Do ETFs have to ensure that those who "sell" them regularly review that they are suitable to those who have invested in them?

 

[jasdpace@gmail.]

Holy, holy, holy

 

[GSheehy]

".....we focussed on Unit Linked Single Premium Investment Products (often referred to as Single Premium Bonds)"

"The introduction of alternative products that better meet the consumer’s needs, equivalent products with lower charges and/or better fund options becoming available etc"


No one in the Central Bank understands the implications of exit tax and consolidating losses/gains.


"Changes to the policyholder’s savings/investment needs, attitude to risk and/or other personal circumstances (e.g. being closer to retirement, employment change etc.)."

They're talking lifestyling here, right?


Gerard

www.bond.ie

 

[Fortune]

Lifestyling on an investment bond?

What about someone in an older investment bond taxed on the fund at 20%? Is it wise to shift them out of that, possibly paying the 1% life levy and then being taxed at 41%?

 

[Duke of Marmalade]

I notice in another thread that NTMA are increasing their savings rates. We are aware that it now becomes a no brainer for anyone who has invested in savings certs over the last couple of years or so to immediately encash and reinvest. If the Central Bank were serious about the duty to continuously review that products still meet customers' needs, they would be calling on NTMA to automatically switch their customers to the the now improved offerings.

 

[Sarenco]

Well, to be fair, the Central Bank doesn’t regulate the NTMA.

 

[Duke of Marmalade]

Well, to be fair, the Central Bank doesn’t regulate the NTMA.

Aware of that, but it is one heck of a silo mentality that they don't call out a fairly gross abuse of their own standards by a State agency in charge of €5bn of small punters' savings. Maybe any promotional material of State Savings should have a very clear warning that they are not regulated by the Central Bank.