View more on these topics

Trustees could be liable for lost compensation

Pension trustees could be held personally liable for hundreds of millions of pounds in lost compensation payouts if they fail to sign up to shareholder class actions, legal experts warn.

Irwin Mitchell partner Alan Owens says around $5bn in compensation was paid out from shareholder actions against firms found guilty of fraud last year in the US but UK investors regularly miss out on their share because of a lack of trustee knowledge.

The US authorities regularly publish notices of class actions and trustees and investors only have a limited window in which to sign up to any agreed compensation package.

Owens says US litigants will typically try to exclude foreign investors from any compen-sation package if they do not sign up in time.

If UK pension trustees do not sign up to actions, they could find themselves challenged after A-Day when personal liability is introduced into trustee rules.

Scottish Life group head of communications Alasdair Buchanan says the increasing legal risks to trustees mean they must have substantial PI cover and he expects this to hasten the trend away from trust-based pension schemes to contract-based schemes, particularly with all exemptions from member-nomin-ated trustee requirements set to expire by October 7, 2007 at the latest.

Buchanan says: “Very high standards are being talked about and this is another reason that we will see a move from trust-based schemes to contract-based schemes.”

Owens points out that the deadlines for filing compensation claims against two high-profile corporate failures, Broadcom and TXU, close on October 5 and November 7 respectively.

He says: “Many trustees have no knowledge of what actions are paying funds and if they do not start getting their houses in order, trustees could expose themselves to actions from investors.”


Adviser Office adds portal integration

1st has unveiled its new Adviser Office system for intermediaries which will be launched later this year. The firm says Adviser Office 4 has been designed to provide increased simplicity, cutting down compliance and admin and allowing advisers to spend more time with clients. New features include streamlined commission accounting, enhanced fee and time recording, […]

Vanity fair

Treating Customers Fairly – is it a catchphrase or a reality with providers? IFAs have no choice but to treat customers fairly if we want any sort of long-term relationship. The client has to believe we are treating them fairly and operating in their best interests. But I do not get the same feeling from providers over whether they care about long-term relationships with their customers and certainly it looks as if some pay lip-service to treating customers fairly while in reality doing nothing of the sort.

Take your partners

E-commerce is increasingly causing significant changes in the ways that many financial advisers run their businesses. More and more services are now being launched that actually deliver on the promised potential of technology for our industry. Consequently, it is becoming increasingly important for advisers to understand those providers which are delivering the best technology solutions […]


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