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.