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Santander sets aside £43m for investment advice redress

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Santander has set aside a further £43m for investment advice compensation after agreeing a revised redress scheme with the FCA.

In results published today for the year to 30 September 2015, the bank says it has set aside an additional £43m relating to wealth and investment products.

It says: “The additional provisions were taken following the agreement of the revised approach to redressing portfolio and structured investment customers with the FCA.”

This is in addition to the £45m set aside by Santander for investment advice misselling in February.

Santander was fined £12.4m by the regulator in March 2014 after an FCA investigation found “significant deficiencies” in the bank’s suitability process.

Santander says its conduct provision, excluding payment protection insurance redress, now totals £195m.

The bank currently has a £48m provision for PPI claims, which it says is likely to be increased once there is greater clarity on the implications of a recent Supreme Court ruling.

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. And here, Ladies and Gentlemen, is the reason why the banks will not be looking to fill the advice gap any time soon whilst the current regulatory ‘regime’ exists. In addition to the £195m mentioned above they will have parted with tens of millions to the FSCS for stuff they didn’t do.

    I don’t know what structured products they sold or how they sold them but assuming the people at Santander are not stupid, one would have to assume that they thought that the products sold were fit for purpose and were no doubt all FCA regulated products.

    Until the regulators give clear rules on what is and what is not acceptable there will never be a business case to advise the mass market. There needs to be an end to retrospective regulation.

  2. Trevor Harrington 29th October 2015 at 12:33 pm

    Soren – spectacular common sense – notable by it’s complete absence elsewhere in our highly regulated World.
    Well said.

  3. And the overall profit on these products sold was……….

    Pile it high flog it off and calculate he cost of redress in the matrix.

  4. Come on Harry, you’re smarter than that. Commission on these would have been 4%, maybe as high as 6%. Redress is 100% plus fines. There’s no business case in what you suggest, it simply doesn’t work and it crucifies the reputation of the bank.

    I suspect what will have happened is that Santander found structured bonds with FSA regulated counterparties, that were highly rated by the ratings agencies but unfortunately failed to predict the financial crisis.

    I’m no fan of bank financial advice, but you’ve got to assume that the products looked reasonably good and were well researched before being sold.

    This, I suspect, is just retrospective regulation because if the FCA doesn’t find Santander at fault then clearly the fault lies with the FCA, FSA or its predecessors. As I stated earlier, if mass advice is to be offered in the future, clear rules must be set so that we know what our liabilities are in advance and can set fee rates accordingly.

    All speculation and my opinion of course.

  5. Hi just got a redress letter offering £46 to me does anyone know solicitors that can act on our behalf for a complaint

    Thanks

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