Not so cosy
Sir: I thought Christopher Fildes (City and Suburban, 20 April) was, on the European Bank for Reconstruction and Develop- ments, at last hitting in The Spectator the fine form he regularly hit as Herbie in Euromoney. But last week he collapsed With an attack of his persistent invincible ignorance on the subject of polarisation.
Fildes knows perfectly well that, in pre-Securities and Investments Board days, the Barchester & Silverbridge had cosy, and secret, relationships with Conse- quential Life and several others and forced on borrowers the policies of whichever life Office paid it best. Now, thanks to the Building Societies Commission, it cannot force customers to use its pet life office and, thanks to the SIB, it must no longer masquerade as the customer's agent but disclose its exclusive and remunerative relationship with Consequential.
The Office of Fair Trading has, like Fildes, always taken a perverse and pecul- iar view about the sale of life policies. It has regularly attacked the easy target of the independent adviser but done little to assist the SIB face down the direct selling life offices and their 'regulatory' body, Life Assurance and Unit Trusts Regulatory Organisation (Lautro), which persist in obfuscating what the consumer pays them and their tied salesmen such as the Bar- chester. This is where there is unfair competition and is the reason why Bar- chester and Consequential can get away with it.
Finally, as Fildes also knows, the SIB has no jurisdiction over home-loan agree- ments as such, only over the associated 'investments' in life policies. The difficul- ties faced by the Barchester's existing borrowers in obtaining the best going rate and the penalties they face on early repay- ment are a matter for the Building Societies Commission. As for people whose mortgages are held by banks, good- ness knows to whom they should look for protection.
Kate Mortimer
Lower Corscombe, Okehampton, Devon
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