View more on these topics

Skipton advice arms set aside £12m following investment advice review


Skipton Building Society’s advice businesses have made a combined £12m provision for customer redress following an investment advice past business review.

In February, Skipton revealed it would set aside £5.6m to cover both redress and commission rebates to investors for fund underperformance.

Some £3.3m of this related to funds under its “Monitored Informed Investing” proposition, whereby customers are offered a rebate on ongoing charges if a fund underperforms against its peers.

Skipton says the remaining £2.3m provision followed a past business review which focused on the documentation of investment advice at SFS and Pearson Jones, another of its advice subsidiaries.

This was a net provision, however, meaning it only set out the difference between the amount Skipton expects its professional indemnity insurer to pay out and the estimated size of the total complaints provision.

The full SFS accounts, published on Companies House earlier this month, reveal the firm has made a £9.1m provision relating to the investment advice review. Of the £9.1m, SFS estimates £7.8m will be covered by its PII.

A Skipton spokeswoman says the total provision across SFS and Pearson Jones is £12m. She says £2.5m of this relates to advice given by Pearson Jones, with the remaining £0.4m set aside for complaints which are not related to the past business review.

She says the “majority” of the £12m is covered by Skipton’s PI insurance and the firm expects total payouts to be below the provision made in its accounts.

Rowley Turton director Scott Gallacher says: “You would have hoped a company the size of Skipton would have watertight compliance procedures. The problem is these sort of organisations are run by salespeople rather than advisers.”


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