View more on these topics

Tribunal finds flaws but backs FSA over L&G case

The legal face-off between Legal & General and the FSA has left both sides claiming victory but the tribunal has ordered the FSA to cut L&G’s 1.1m fine.

An unrepentant FSA is promising to maintain its tough stance against firms.

Top lawyers believe that the Financial Services and Markets Tribunal’s judgment on L&G’s appeal over the fine imposed by the FSA for mortgage endowment misselling has granted carte blanche to the regulator to ride roughshod over companies that refuse to cooperate with misselling investigations.

The judgment finds that while the FSA’s misselling case against L&G “in some extent failed”, the product provider had missold.

The FSA has been quick to pledge it will be tougher on uncooperative firms.

The tribunal finding stated: “If L&G was not co-operating in securing a review which could be used effectively for enforcement, it was for the FSA to impose a suitable exercise.”

L&G believes its position has been justified because the decision-making process of the FSA was found to be flawed.

But while the tribunal did not uphold all 60 missales found by the FSA, it did uphold eight, and admitted that common sense suggested that the defects in L&G’s procedures would have meant more missales.

The tribunal did find that L&G’s advisers had failed to do enough to ensure that customers understood endowments.

But it slammed the way in which the FSA’s regulatory decisions committee made decisions that were not backed up by the evidence.

International law firm Allen & Overy head of regulatory group Simon Gleeson thinks that both sides would claim victory.

He says: “Where this sets a precedent is that previously no one dared to take on the FSA because it was thought it would damage your business. This shows you can take them on publicly, not win, and at the same time, not harm your business.”

The Money Marketing/ Financial Services Char-itable Foundation tsun-ami appeal will get off to a musical start with a classical music concert by the orchestra of the Bournemouth Philharm-onic Society.

The concert – to support the Unicef-backed appeal – will take place in May at a venue in the Bournemouth area to be announced shortly, and will be conducted by orchestra founder and chairman Sam Newgarth, an IFA who is principal of Newgarth Financial Services. Newgarth, the orchestra’s principal conductor, formed the orchestra in 1976. He has worked in financial services for 25 years.

For more information about the tsunami appeal, please contact the children of the tsunami, p14


Dish of the day

Lifesearch’s Kevin Carr had a close encounter with a cockroach at a fashionable London eaterie last week. He looked up to see one of the beasts nestled on his fellow diner Standard Life PR Peter Timberlake’s collar. After a brief flap, the insect was removed – it would have been served up in some restaurants.

Aviva moves to embedded value

Aviva will report its preliminary corporate results under the European embedded value principles instead of on an achieved profit basis for the first time this March.

Simon Fletcher

Auto-enrolment: pay attention or pay the price

By Simon Fletcher

As a chief executive officer of a business in the financial services sector, I have been dealing with the introduction of auto-enrolment for our clients for some time, but I can also speak from an employer’s point of view, having to go through the process ourselves.


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