View more on these topics

Pru fined £750k for endowment misselling

Prudential has been fined £750,000 by the FSA for endowment misselling.

The fine comes after subsidiary Scottish Amicable was found to have missold mortgage endowments between January and December 2000.

The FSA says ScotAm advisers did not ensure that consumers had the right risk profile for investing in a product where the loan might not be paid off in full at the end of the term.

Prudential was instructed by the regulator to conduct a sample review of its endowment book following a visit in January 2001. It looked at 33,781 policies and has subsequently set aside £11m for compensation payments.

The fine has been welcomed by the Consumers&#39 Association, which has been calling for a full-scale review of so-called endowment misselling. However, the CA says the FSA must ensure that Pru does not use policyholders&#39 money to pay the fine.

The FSA says the size of the fine reflects the fact that ScotAm failed to respond to guidance issued by the regulator in December 1999 about standards to be met when selling mortgage endowments.

CA director general Sheila McKechnie says: “With Prudential&#39s history of paying compensation costs from policyholder funds, it is vital that the FSA puts its foot down to ensure consumers are not hit twice for company malpractice.”

A Pru spokesman says: “We can confirm that shareholders and not policyholders will pay the fine.”

FSA director of enforcement Andrew Procter says: “This is a continuation of our work to make sure that mortgage endowment customers that have been missold get the compensation that is due to them. The size and nature of Scottish Amicable meant that the firm&#39s failings exposed a large number of consumers to potential loss.”

Recommended

Outside edge

Although I am sure most industry observers would agree that we are in the midst of a period of intense structural change, largely fuelled by regulatory and economic circumstance, I am less sure that there is consensus on the ultimate winners and losers.Nowhere is the debate more divided than across the life office/IFA divide, a […]

London & Country remortgage guarantee

National mortgage broker London & Country is guaranteeing it will complete remortgages in 28 days or pay clients any money they lose out on.L&C will pay the difference between a borrower&#39s old mortgage payment and new one if it runs over 28 days. Initially, the pledge only applies to an exclusive Alliance & Leicester remortgage […]

Pints of view

As I strolled into the pub, I thought to myself – at last a couple of hours of peace and quiet. No Green Paper, no pension simplification, no consultation papers and most of all no pensions.Carefully carrying my first pint of Old Stokestrangler and the most recent copy of Hello magazine, I found myself a […]

Friends warns of more payout cuts

Friends Provident is slashing payouts on with-profits by up to 20 per cent and warning of further pain to come.The life office says unless there is a strong recovery in the stockmarkets it will again cut payouts when it conducts a review later in the year.It says policyholders are still getting smoothing on maturity and […]

Bonds in 2017: Stick or twist?

Royal London Asset Management Bond Fund Managers Paola Binns and Craig Inches look at why short duration could be a key tactic for fixed income investors during 2017. Read the full article here The value of investments and the income from them is not guaranteed and may go down as well as up and investors […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    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