View more on these topics

&#39Abbey Life escaped with £1m fine&#39

Abbey Life got off lightly with a record £1m fine for endowment misselling, says the FSA.

It says the size of the fine reflects the serious nature of Abbey Life&#39s failings but would have been much higher if the company had not taken proactive action and senior management had not accepted responsibility.

The FSA says that around 46,000 Abbey Life mortgage endowment policyholders and up to 4,000 other customers may be due compensation which could add up to to a total of £160m.

It lists serious Abbey Life failings over the period as weakness in monitoring of advisers, poor standard reasons-why letters and suitability checks and systematic failure in Abbey Life&#39s procedures when selling endowment policies.

FSA managing director for regulating processes and risk Carol Sergeant says: “This action is a part of the FSA&#39s overall approach to misselling of mortgage endowments. The FSA is committed to ensuring that customers are compensated appropriately.”

Lloyds TSB spokesman Emile Abu-shakra says: “We have £165m set aside for compensation to be prudent. We are disappointed with the fine but have been co-operating fully with the FSA.”

The fine is a record for endowment misselling but is just half the £2m that Royal Scottish Assurance was fined in 2000 for what the regulator called “systematic mispricing of endowment policies”.

Recommended

CSFB says ratings agencies too soft on L&G, Pru and Aviva

Credit Suisse First Boston says that credit ratings for Legal&General, Prudential and Aviva are too high and that the financial strength of life companies generally has fallen further. L&G and Pru both have AAA ratings from Standard&Poors and Moody&#39s, but CSFB says this is two grades too high. It also says Aviva is one grade […]

Standard Life property fund opens door on offices

Standard Life Investments has created the UK property income fund, an offshore Oeic that invests in UK commercial property.The fund aims to produce a yield of 6.5 per cent a year, but will also provide some scope for capital growth. It has already acquired a £200m initial portfolio of properties and a further £50m is […]

Roving Fidelity fund in bid to be a world beater

Fidelity is bolstering its fund range for the Isa season with a high-risk, global equity fund with a “go anywhere” mandate looking at global sector and stock-specific factors.The global focus fund will seek high returns from investing in stocks in any region or country according to the best ideas of manager Brenda Reed, who will […]

Whitechurch deal to train Pearl salesforce as IFAs

Whitechurch Network is offering members of the Pearl direct salesforce facing redundancy a new package to attract them to the network.In response to the news of Pearl&#39s plans to axe its direct salesforce of 1,000, the Bristol network is setting up a special unit headed by managing director Ian McIver to train direct salespeople to […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com