Skipton Building Society’s financial advice arm returned to profit in 2013 but set aside a further £1m related to charges refunds.
The annual results, published last week, show that its three advice firms – Skipton Financial Services, Pearson Jones and Torquil Clark – made a pre-tax profit of £3.9m last year compared with a loss of £900,000 in 2012.
The results also show that SFS set aside £1m last year under its Monitored Informed Investing proposition, whereby customers are offered a refund of ongoing charges if a fund underperforms against its peers.
If a fund returns a fourth-quartile performance over a year, ongoing charges will be refunded.
Customers also receive a refund of initial advice charges where an investor dies within three years of investing, which is passed on to next of kin or a charity.
In 2012, Skipton set aside £3.3m under this proposition as well as a further £9.1m for customer redress relating to an investment advice past business review for SFS.
Skipton says the actual cost of the review and any redress was £241,000 because the £9.1m was a “prudent worst-case scenario”.
In 2012, Pearson Jones made a £5.1m redress provision for a past business review and other redress.
Skipton declined to comment on any advice redress set aside in 2013.
Torquil Clark managing director John Chapman says the firm has set aside no redress for 2012 or 2013.
A spokeswoman for Skipton says: “These rebate promises are part of SFS’s ongoing service proposition to help investors and are extremely well received by clients.”
Informed Choice managing director Martin Bamford says: “Investors may be benefiting from these repayments but that money has to come from somewhere and Skipton’s charges are likely to be that much higher as a result.”