UK Life Insurance FAQ - eg. Who are the FSA?

Q. What do I need to know about a UK Financial Advisor to ensure they are qualified to give me professional advice?

Good financial advice can really help you achieve your goals. Should you want to plan for a comfortable retirement, need to take out a mortgage to buy a house or maybe protect yourself and your family's finances should you lose your job or become ill. A financial advisor should be able to prioritise and understand your financial needs, and recommend any products or actions you can buy or take to help you.

There are three types of advisor, tied, multi-tied or independent. Tied advisors are only able to sell products to you from one company. A development of this is the multi-tied advisor, who can only choose from a panel of providers, but still don't give you the full benefit of the market. An independent financial advisor can advise you on products from the full range of companies on the market. The independent financial advisor should give you the best advice for. Under the FSA Act 2000, the FSA regulates all advisors. The FSA keeps a Central Register, which you can use to check up on a firm.

Q. How do I complain about a Financial Advisor?

The first step you should take should you feel there is cause for complaint, is to contact the company. Before you even use a financial advisor, you should check that they are actually regulated by the FSA. If they are not, then don't use them. If they are regulated by the FSA then they will need to have a complaints procedure.

The company must perform their investigation within 2 months, after which you can take it to the Ombudsman. Should the investigation complete and you are not happy with the outcome, you can go to the Ombudsman, making sure you've supplied the correct documentation. The Ombudsman will check your complaint for relevance, and then will investigate and adjudicate. Their decision is binding on the firm but not you. So if you don't agree you could still go to the courts.

Q. What does it mean when they say they are "loading" a life assurance policy?

Premium loading is where the UK life insurance company takes the basic premium that they wish to charge for a certain level of cover, and adds an amount. The amount that is added to the premium is aimed at covering the expenses that the company incurs selling the policy, the profit that the company wish to make on selling the policy, and a margin created for contingencies.

Q. Who are the Financial Services Authority?

The Financial Services Authority (FSA) is a non-governmental, independent organisation that was awarded statutory powers by the Financial Services and Markets Act 2000 (FSMA). They are a company that is limited by guarantee and have been financed by the financial services industry. The first aim is to maintain the UK public's confidence in the financial system in the UK. The FSA supervise settlement houses, exchanges and other market infrastructure providers, surveying markets and monitoring transactions.

The second aim is to increase the public's understanding of how the financial system works, which in turn will increase confidence in it. People can become informed consumers if they can gain knowledge, aptitude and skills which will help them to manage their financial affairs effectively.

The third aim is to secure the correct degree of protection for consumers. Firms and individuals who wish to engage in regulated activity need to satisfy some necessary criteria, such as competence, honesty and financial security. The FSA vet all entries to ensure this. www.fsa.gov.uk/