View more on these topics

N&P admits Keydata compensation could hit £50m

The Norwich & Peterborough Building Society says that under a worst-case scenario it could face a £50m bill for covering the losses of clients it advised to invest in Keydata.

Chief executive Matthew Bullock said the firm is preparing for discussions with the FSA in September to decide whether it missold products from the failed structured product provider, in an interview with BBC Radio Cambridgeshire this morning.

The Financial Ombudsman Service, which earlier this month issued a preliminary ruling that the firm pay out £28,000 to an elderly couple who it advised to invest in Keydata bonds, has agreed to discuss the firm’s appeal of the ruling after the FSA talks in September, he says.

Bullock said: “If you said that [the Keydata products] were 100 per cent missold and the bonds are worth absolutely nothing it could be about £50m.”

He said the firm carried out sufficient due diligence on Keydata and so should not be forced to cover investors’ losses.

However, the chief executive insisted that Norwich & Peterborough could cope with any compensation scenario. He said: “Even if it was 100 per cent or nothing, there would be nothing that could be concerning our members or our savers about this because we have the reserves we could absorb even the worst-case scenario.”

Bullock added: “Certain things have happened in the last few days which make me feel reasonably confident that this thing will be resolved and people will be able to know where they are and hopefully feel good about things by the end of the year, probably by the end of September.”

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. Still it goes on – Mis sold ?

    What does this mean.

    The fact that a keydata product was sold does not make it in it self a wrong act but the way it was sold to the exclusion of all else ie gambling on one product and one provider is that investing?
    The fact that these sales were driven by management for excess commissions needs to be addressed as this targeted high pressure sales pressed on loyal and trusting older customers are the real scandal.

  2. I’m sorry Mr Bullock but it is virtually impossible to carry out sufficient ‘due diligence’ on any investment in order to provide the customers with whom I have spoken the reassurance that what you are selling them will meet their reasonable expectations.

    The FSA’s own consumer facing ‘advisers’ failed to spot the chink in the armour of these structured products, well they don’t need to be qualified or, more importantly, have wide experience of financial products so why should we expect them to carry the can?

    I somehow feel that N&P has not been the victim of circumstance.

  3. No doubt this matter will be resolved with N&P admitting liability for a reduced cost. But will all us IFAs that have been unfairly punished on the same basis in the past be allowed to appeal the awards against us?

  4. To the IFA poster above, I have this to say.
    IFA clients pay for IFA advice. If the advice was not ‘fit for purpose’ then they should put more effort into investigating the products they sell. Either the FSCS, or they, need to cough up and reimburse investors. Oh boo hoo, my heart bleeds for you lot!

  5. Scott Taylor-Barr 13th September 2010 at 4:33 pm

    I think we should stop back-biting each other (again) and concentrate on the over-riding issue that a firm has given advice, which like many was based on the best information available at the time in the public domain (or so we would hope), and then when the product provider has collapsed the provider of the advice is somehow supposed to “have seen it coming”?
    If the advice given has led to an inappropriate product being sold then that’s one thing – but to expect an advice firm to compenstate for not being able to see the future – what chance do we all stand?

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