FSA changes will dilute with-profits

If the CP207 consultation document becomes a reality, investors who surrender their policies will benefit at the expense of those who maintain them to maturity

The latest missive to rock the with-profits industry comes in the form of CP207, a consultation paper from the FSA that proposes far-reaching changes to with-profits funds. The paper, Treat With-Profits Holders Fairly, in fact contains proposals which are at risk of seriously discriminating against those who hold their policy to maturity. There is also a very real danger the proposals may deepen the severity of mortgage endowment shortfalls and increase the current strains on pension provision in the UK. CP207, which the FSA closed to comments on 31 March and is expected to report back o...