View more on these topics

R&SA is hit with record £1.35m pension penalty

Royal & Sun Alliance shareholders will be left to pick up the £1.35m fine imposed on the life office by the FSA for its second offence under the pension review.

The penalty is the biggest ever for pension misselling, more than doubling the £650,000 fine on Prudential last October.

R&SA allowed 13,500 cases with a potential £32m of redress to slip through the net even though it had been fined £225,000 by the PIA for pension review failings in 1997.

The 13,500 reviewable cases, which relate to pensions sold by its direct salesforce and tied agencies, were only identified two years after R&SA&#39s deadline for completion of all phase-one cases.

In August 2000, Deloitte & Touche was called in to help the firm with the review after the FSA identified systematic failures in the review by R&SA.

The penalty is the fourth-biggest regulatory fine, exceeded only by Royal Scottish Assurance which was fined £2m in November 2000, Morgan Grenfell which was also fined £2m in April 1997, and GLMP, formerly GAN, which was fined £1.4m in November 2001.

The FSA blamed “limited evidence of effective management control” and “weak monitoring” of the review for the failure by R&SA to pick up 23 per cent of reviewable cases.

The fine comes at a bad time for R&SA chief executive Bob Mendelsohn who has been facing calls for his resignation after the company closed to new life and pension business and axed 1,200 jobs this month.

FSA managing director for regulatory processes and risk Carol Sergeant says: “This is a significant penalty to reflect the serious nature of R&SA&#39s past failings in its handling of the review. The responsibility for delivering redress rests with senior management, who must ensure proper control and monitoring of such work.”

R&SA UK life operations director Phil Egan says: “There were shortcomings when we determined the reviewable population. This issue will have no bearing on Bob Mendelsohn&#39s position.”


Child&#39s play

Last week I made the (fairly obvious) point that the vast majority of investment strategies for the benefit of children are funded by adults, often parents, so the legal niceties of contracting with children are rarely relevant. Almost every financial product available could be used to provide for the financial future of children. In most […]

IFAs see red at big rise in Eagle Star endowment alerts

IFAs are blaming Eagle Star&#39s use of over-optimistic investment projections for 80 per cent of its mortgage endowment policyholders failing to be on target. Its projections for the second quarter of 2002 show 59.4 per cent of endowments are red, facing a likely shortfall, 20.3 per cent amber, facing a possible shortfall, while only 20.3 […]

CMI and Axa list Opal London Property Fund

The Opal London Town Property Fund has been put on the elegible lists for offshore portfolio bonds from Axa and Clerical Medical. The fund was launched in April 2002 and invests in residential property developments in London and the South East. All the properties are exclusively sourced and managed by London Town Plc.Tilney Investment Management […]

Two year stepped discount from The MarketPlace

The Marketplace is launching a two-year stepped discount mortgage with cashback funded by Bristol & West. The 3 per cent discount until October 2003 gives the product an initial pay rate of 2.95 per cent. A further discount of 0.75 per cent continues for another year.The mortgage is for maximum loan to value of 95 […]

Japan Economic Insight

James Dowey, Chief Economist, and Paul Caruana-Galizia, Economist

The conventional wisdom is that following a roughly 50 per cent rise in the stock market in 2013 in Yen terms, the Japan trade is over and done*. So the story goes, those big gains were due to a one-off boost from quantitative easing (QE) and a depreciation of the Yen — policies that one should think of as a palliative to Japan’s economic weakness, but not a cure. Rather the cure, and by implication the necessary condition for a longer-term investment case, is deep structural reforms — a painstaking re-weaving of Japan’s economic and social fabric, no less. The story continues: this is a much tougher test than launching a blast of QE, and one that prime minister Shinzo Abe, although well intentioned and well supported by the public thus far, is likely to fail. Stick a fork in Japan, it’s done…continue reading


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    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