View more on these topics

Adviser fears grow over Sesame pension review costs

UK-Currency-Money-Notes-20-GBP-700x450.jpg

Concerns are growing among former Sesame members that they will be pursued for compensation costs resulting from the network’s review of pension transfer advice.

Sesame ceased operating as a network for investment advisers at the end of July as part of a fundamental overhaul of the business. It agreed to carry out a past business review of pension transfer advice in 2013 after being fined £6m by the FCA for poor systems and controls.

The review covers advice given between July 2010 and September 2012 and is being carried out by compliance consultants The Con-sulting Consortium.

Sesame says the review is due to be completed next year.

Any compensation would be paid by Sesame but it has the right to pursue former ARs for the costs.

Money Marketing understands the professional indemnity insurers of some ex-Sesame members have created an exclusion for any claims that arise out of the past business review, known as Project Minerva.

Regulatory consultant Evan Owen says: “I have been contacted by a number of former ARs about this and concerns are growing that they will be pursued for claims.

“Former ARs are getting ready to defend themselves as all of this business was pre-approved by Sesame.”

Sesame chairman John Cowan declined to comment on whether former ARs would be pursued for compensation. He says: “We are on track to finish Project Minerva by May or June next year as agreed with the FCA, and are trying to beat that deadline.”

In July, Aviva and Friends Life pledged £45m in financial support for Sesame to cover potential liability and restructuring costs.

Recommended

Mark Barnett: Rise in UK dividend payout ratio is unsustainable

One question I am being asked a lot at the moment is how the stock market volatility and global events of the past six months have affected my investment strategy. When equity prices move significantly I will always reappraise the positioning of my portfolios but this tends to be more on a rolling 12- to […]

Money-Cash-Coins-GBP-Pounds-UK-700x450.jpg

Basic state pension to rise from April

The Treasury is to increase the basic state pension from April in its biggest rise in real terms since 2001. The BBC reports Chancellor George Osborne will confirm the increase to £119.30 a week as part of the Autumn Statement and Spending Review on Wednesday. The 2.9 per cent rise will be worth an extra […]

Lloyds to axe 1,000 jobs in latest wave of cuts

Lloyds Banking Group will today reveal plans to cut another 1,000 jobs in the next phase of the taxpayer-owned bank’s restructuring. The roles will be cut across the group’s business, including at branches, Sky News reports. A year ago the lender unveiled a three-year plan that included a target to reduce headcount by 9,000 by […]

George-Osborne-in-Television-Studio-700.jpg
3

Autumn Statement: Calls to scrap pension exit fees and extend stamp duty exemption

By Sam Brodbeck and Tessa Norman George Osborne is being urged to use next week’s Autumn Statement to scrap pension exit penalties, the new annual allowance taper and extend the stamp duty exemption to equity Isas and Sipps. Ahead of the Chancellor’s speech, Hargreaves Lansdown head of pension research Tom McPhail says the Government needs […]

Sierra Leone cover image - thumbnail

White paper — Sierra Leone International Insights

Jelf Employee Benefits assesses the areas that employers should be aware of when considering operating in Sierra Leone, including healthcare access, delivery and insurance provisions. This report draws on various sources to highlight specific considerations for this emerging jewel in West Africa.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. I’m pretty much with Evan on this one. The whole principal/AR structure revolves around the former accepting regulatory liability. There might be a contractual piece about ARs picking up the insurance excesses for business they wrote – that creates an interesting tension within the ex-AR population about who pays – but I’d assume that the bulk of any redress cost would get picked up by Sesame’s PI cover. And if you contracted to pay it, well, no-one made you sign up to Sesame…

    And it seems right that a firm’s PI cover (now it’s DA) wouldn’t pick up the tab for something that another DA firm – Sesame – is on the hook for.

  2. “In July, Aviva and Friends Life pledged £45m in financial support”
    And this organisation has the brass neck to have those purporting to be independent among its ranks. Not that a network ever was independent anyway.
    We now have the life offices trying to protect their distribution networks. Mr Cowan said that rumours of Sesame’s demise were exaggerated. Oh yea? How much longer will the life offices pour money down this black hole? (Anyway I understood that AVIVA and Friends Provident are now one and the same).

  3. Con-sulting sounds about right, it’s probably a con and insulting at the same time

  4. No one was forced to write bad business. I can’t see why being an AR should give any special protection. Certainly if Sesame were still operating I would not expect current members to subsidise ex members who had written bad business. In practice I would imagine it will depend on the amounts and volumes written. If anyone has written large volumes it might make commercial to go after them ?

  5. Donald Macfarlane 27th November 2015 at 11:11 am

    It would appear that the issue is that Sesame pre approved the business, before the adviser went to client-surely then the adviser followed procedures that Sesame put in place

Leave a comment