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Lloyds investigates Scot Wids structured products sales

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Lloyds Banking Group is investigating sales of Scottish Widows structured products after a sample review found the investments were missold in 25 per cent of cases.

The review was triggered by a Daily Mail investigation after Lloyds customers in their 60s and 70s complained they were promised returns of up to 75 per cent which have not materialised.

The newspaper passed the complaints to Lloyds group chief executive Antonio Horta-Osorio and Financial Conduct Authority chief executive Martin Wheatley last month.

Around 100 complaints about the structured products were received, of which 25 have been upheld.

The complaints relate to sales of the Scottish Widows Capital Protected Fund 5, the Scottish Widows Protected Capital Solutions Fund and the Scottish Widows Guaranteed Investment Bond between 2007 and 2012.

Thousands of Capital Protected Fund products have matured in the last fortnight alone.

Lloyds is extending the review and looking at which types of customers to focus on. A spokesman for Lloyds says: “We are conducting a full review of the complaints the Daily Mail has sent us. We strive to deliver fair outcomes for all our customers and are assessing each case on an individual basis.”

An FCA spokesman says: “We are encouraged Lloyds is taking steps to review the complaints in question. We will continue to liaise with the bank closely to ensure any affected customers get a fair outcome.”

Sovereign IFA director Mark Hibbitt says: “Having previously worked in a bank, I am not surprised there were instances of misselling. Structured products were an easy sale, given the guarantees, and the sales pitch always focused on moving customers out of cash.”

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. Missold Investor 18th April 2013 at 8:35 am

    Structured investment products have a history of being mis-sold. The FSA’s 2009 review of advised structured product sales found just 31% of sampled cases to be suitable. Then there were the cases in 2003 that led to two national IFA firms (RJ Temple and David Aaron Partnership) closing down. Lloyds should also have known better, having already been burned with structured products sales in 2003 that resulted in a fine of £1.9m and a redress bill of £98m.

  2. And to think that Derek Gair and Alan Lakey were yesterday crying thst the banks are pulling out of financial advice…..

    THIS is the type of things thd banks have been doing to their poor customers for years…let’s hope RDR gets shot of these banks from financial advice for good.

  3. Mr Anonymous, nobody condones bank mis-selling.

    The reason that I bemoan the loss of bancassurance is that it fulfilled a function which was to train advisers and introduce sections of the public to the advice process.

    This served as a stepping stone whereby proper advisers could take over and do the job properly.

    If your post was meant to belittle, it didn’t work. If it was meant to inform, then it failed on that score too.

  4. But it seems you are condoning bank mis-selling….as you say, after the banks had dealt with their customers “proper advisers could take over and do the job properly”.

    Your own words : i.e. banks advisers weren’t doing the job properly. As indeed everyone else agrees too.

  5. Nobody condones bad practice whether it be by a bank or as the first post indicates anybody else.

  6. The logic here is that there are variations of advice. Not all bank advice is bad, in many instances the downside was the limitation of the scope of advice often where the bank is tied.

    If a bank customer approaches me with an ‘unsuitable’ product I will ensure that the right product is arranged.

    However, if the initial product has not been sold then the customer would likely never approached me.

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