Equitable Life was a commercial company investors should have known that in any form of investment there are risks to be taken. We've had Northern Rock should Government bail out every financial institution that gets into bother I think not. National Savings would be the only savings vehicle left!
All investors had the opportunity to invest via an Independent Financial Adviser. They have to answer for any bad advice given. Instead Equitable Lifes investors chose to invest with Equitable Life direct. It was up to the investor to satisfy themselves as to the solvency of the company.
Remember, 'Caveat Emptor' - Let the buyer beware.
but this latest review found that the government and others failed to properly regulate Equit Life,surely if it had done its job properly then things might not have gone so badly wrong as it were and these people wouldn't need compensation at all? So the government should compensate people for the mistakes it made, surely?
Surely without regulation "the gains" / "risk" would have been greater and in any event who in their right mind would invest without first obtaining good independent advice.
Was it the additional benefit(potential rewards) that attracted them to Equitable Life in the first place.
I wholly agree with rdudge 'Caveat Emptor' - Let the buyer beware.
One needs to remember that there were many different types of investment available with Equitable; some of which were Pension Plans. These contracts are largely, by necessity, long term and governed VERY STRICTLY by legislation laid down by successive governments. Once investments in such pensions contracts were made, policyholders were in the hands of the investment institution and "watchdog" government departments until pension age was reached. There was NO OPTION to remove funds from pensions policies, even if there had been knowledge of any bad practice.
The F.S.A. was given the responsibility of overseeing financial institutions to make sure they adhered to 'the rules'; it failed spectacularly in the Equitable case, particularly when Equitable decided to fight policyholders in court over guarantees on pension contracts. This event should never have happened and Equitable would still be in business!! Ergo, Equitable pensions policyholders deserve to be compensated from the public purse. The alternative to this, in some cases, is to rely more heavily on hand -outs from the state coffers to increse income in retirement.
By the way, more than 95% of Financial Advisors would not have recommended investing in Equitable as there would have been NO financial gain if they had done so.
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