View more on these topics

Berkeley Jacobs is fined over pension unlocking

Berkeley Jacobs Financial Services has been fined £175,000 by the FSA for poor advice and misleading advertising of its pension unlocking service.

The Rochester-based firm must also set aside £1m to compensate up to 5,000 consumers who were encouraged to use their cash for short-term benefits such as holidays and buying luxury goods.

Berkeley Jacobs parent IFG Group has replaced managing director Paul Wheal with Paul Gardner-Bougaard, a group director of IFG. The other Berkeley Jacobs directors on the board at the time of the misleading campaign have also left the firm.

The FSA said the campaign, which aired extensively on Sky television, gave no explanation that releasing cash early meant sacrificing future pension income for short-term gain.

The firm was also criticised for failing to ask customers what income they thought they would need in retirement and failing to find out the value of their life policies and pension arrangements.

The FSA has made the firm review all financial promotions and appoint external consultants to review all sales and compliance procedures. It must also retrain the firm&#39s five RIs and install new recording equipment to monitor advice given.

FSA director of investment firms David Kenmir says: “We will not tolerate firms showing such a blatant disregard for consumers&#39 interests. No consideration was given to the substantial drop in the consumer&#39s pension income or their inability to make up for that loss as they were so close to retirement.”

Gardner-Bougaard says: “As soon as we became fully aware of the problems at Berkeley Jacobs, we took immediate action to resolve the issues identified.

“We removed the management team responsible and reviewed all of Berkeley Jacobs&#39 sales and compliance procedures and implemented changes where necessary.”

Recommended

Eurostoxx link for Nvesta plan

Structured product provider Nvesta is offering a new five-year income plan based on the Eurostoxx 50 index. The plan will offer a minimum income of 4 per cent a year plus a potential 3 per cent bonus paid annually. The bonus will be paid for each year that the Eurostoxx 50 finishes above the initial […]

Platform launches new management development incentive

Platform&#39s managers are to train for the Institute of Leadership and Management team leading certificates. Platform hopes that by July, 30 managers will have gained the certificate. It says the course should improve employee performance through its focus on the specific role of team leaders. Managing director David Tweedy says: “This new people development initiative […]

IHT planning a growing market for IFAs says ScotEqu

The doubling of the amount of inheritance tax collected by the Inland Revenue over the last 10 years to over £2.3bn in 2001/02 from £1.2bn in 1992/93 presents a growing opportunity for advice for IFAs says Scottish Equitable. The provider says the number of people likely to be hit by IHT is likely to have […]

Soaring IHT bills bring opportunity for advisers

The amount of inheritance tax collected by the Inland Revenue over the last 10 years has doubled to over £2.3bn in 2001/02 from £1.2bn in 1992/93, presents an opportunity for IFAs, says Scottish Equitable. The company says the number of people likely to be hit by IHT is rising as property price have soared. ScotEq […]

2

DB transfer shouldn’t be all-or-nothing

By Steve Webb, director of policy In my recent discussions with advisers, a hot topic has been the growing number of people interested in transferring their defined benefit pension rights into a defined contribution pension scheme. With many pension schemes offering eye-watering transfer values, this is likely to be an area of increasing interest. Yet […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment