Friends Provident blaming UAE IFAs for poor takeup of unsuitable products

Published:  20 Apr at 6 PM
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Tagged: UAE
The row over whose fault it is that FPI’s products are no longer popular with expats in the UAE is ramping up, with the insurer accusing IFAs of giving bad advice.

Over the past few years, a number of scandals have erupted, with expats accusing both advisors and product providers over mis-selling, extortionate charges and the general unsuitability of their products. Friends Provident Isle of Man is one of the most derided companies due to their high service charges and punitive conditions. In addition, UAE IFAs have received much-deserved bad press for their habit of placing clients’ funds in products which pay the most commission, regardless of clients’ wishes, with expats wishing to save or invest in a productive manner caught between a rock and a hard place as a result.

UAE expat professionals are a prime target for mis-sold investment products, and are now registering their discontent on social media as well as attempting to get out of their unsuitable insurance-based plans. In a recent interview, FPI’s chief marketing officer Philip Cernic told reporters insurance companies’ resources should be put towards improving local IFAs’ standards in order to ultimately benefit their clients. Interestingly, almost a year earlier, he contributed another column stating unequivocally that customers were being failed by contractual savings plans, without mentioned the fact that FPI and other such companies pay their advisors high commissions on fixed-term products.

Experts have a different take on the issue, with some believing IFAs are being held up by PFI and other such product providers as scapegoats, whilst the actual problem is the lack of decent, fairly priced and transparently described savings and investment products provided by insurers. In general, the majority of IFAs are tied to a maximum of three providers in the manner of marketing agents, but consumers are now far more savvy and are demanding products suited to their needs. The norm is still based on expensive savings products with poor returns, but UAE expat consumers are now having none of it.
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