Showing posts with label lloyds. Show all posts
Showing posts with label lloyds. Show all posts

Thursday, December 15, 2011

Irony

IFAonline reports that John Spence, the newly-appointed non-executive director of the Money Advice Service (MAS), was in charge of managing risk at Lloyds TSB during the height of its endowment mis-selling scandal. 

This is somewhat ironic, as per the MAS site:

"A wealth of information and advice If you’re looking for free, clear, unbiased money advice, you’re in the right place.

The Money Advice Service is here to help everyone manage their money better. We do this by giving clear, unbiased money advice to help people make informed choices. 

We believe that the right money advice can make a difference to people’s lives. And when people take steps to manage their money better, they can live better too.

The Money Advice Service is a free, independent service. We were set up by government and are funded by a levy on the financial services industry.

Because we’re not selling anything ourselves, or for anyone else, you can trust our advice."

Spence was head of risk at Lloyds when it was fined £300M for mis-selling endowment policies and precipice bonds in 2003.

Lloyds was found to have sold the products inappropriately over the ten years preceding 2003.

Thursday, March 02, 2006

Lloyds Endowment Hit

Lloyds Endowment Hit

Last week Lloyds reported profits of £3.82BN for 2005.

However, the charge for compensation for paying customers for mis-selling endowment policies rose from £100m in 2004 to £150m in 2005.

Whilst this cost affects the results, and of course the shareholders, I doubt that the people who sold these underperforming and useless products will have been affected; ie the senior managers will still receive bonuses.

Wednesday, December 14, 2005

The Pain of Mis-selling

The Pain of Mis-selling

It seems that it is not just the hapless owners of underperforming and useless endowment polices that are suffering, sometimes a little of the pain and misery caused by these useless products is spread around.

Mis-selling endowment policies has cost Lloyds TSB has £150M this year, that is in addition to the £360M already paid out in recent years for compensation claims over a variety of financial products.

Lloyds TSB is still reviewing the total cost of compensating its customers, but admitted that this could lead to an increased provision in the accounts.

In a trading update before its 2005 figures, Lloyds TSB revealed that it would also need to set aside another £150M to cover the cost on insurance policies of people living longer.

Lloyds TSB is not the only bank facing claims for mis-selling of endowment policies. HBOS has had to put aside £260M over the last two years.

Lloyds TSB warned that customers were continuing to have difficulty repaying their debts.

How can people be expected to repay their mortgage, if the policy that they bought to repay the mortgage doesn't work?

Analysts at Dresdner Kleinwort Wasserstein have described Lloyds as "strategically challenged". There is now speculation that it may be a takeover target.

What goes around, comes around!

Wednesday, February 09, 2005

Terminal Decline

Terminal Decline

The Scotsman writes that endowment policies are in "terminal decline". They cite the recent cuts in bonuses, announced by the larger life assurance companies; quote:

"..Standard Life and Clerical Medical were this week the latest in a string of assurors to serve up unpalatable news to policyholders: the former slashed bonuses almost across the board, despite a 10.4 per cent pre-tax return on its with-profits fund, while the latter's investors fared little better, although its fund was up 9.9 per cent.

That followed grim tidings from Scottish Widows, a subsidiary of Lloyds TSB, and Aviva - owned Norwich Union. Like Standard Life, Widows cut final payouts for the sixth time in three years, following a 10.5 per cent lift in its fund.

Earlier, Norwich Union, the UK's largest insurer, became the first this year to deliver a stinging blow, slashing payouts by up to 11.5 per cent when its four funds overall enjoyed the same rise.

Prudential's bonus declaration is over a fortnight away, while Abbey National is not due to make its announcement until March. The Pru has claimed it will increase or maintain total bonus rates on all unitised with-profits and offer good year-on-year increases in value
..".

The bottom line to this is that we, the holders of these lousy underperforming polices, are screwed.

Saturday, January 22, 2005

Tick Tock

Tick Tock

Time is running out for the hapless holders of underperforming, and useless, endowment mortgages to complain over mis-selling.

The life assurance companies will be writing to their policy holders in the coming months, warning them that they have a limited length of time left to complain.

After that, tough luck!

It is reported that Standard Life and Lloyds TSB will shortly be starting their mail shot about this issue.

Norwich Union, will be writing to its 1.1m endowment policy holders in March, reversing its earlier commitment not to impose a time bar.

How nice of them!

Friends Provident and Zurich will also be writing to their policy holders.

Some will allow 6 months to complain, others 12.

The Financial Services Authority (FSA) rules give policyholders three years to complain, after the arrival of an initial letter warning that an endowment has underperformed.

Out of the large firms, only Legal & General and Prudential have not imposed time limits on complaints.

Wednesday, December 15, 2004

The Costs Begin to Mount

The costs of compensating people for being mis-sold underperforming, and useless, endowment polices is beginning to bite into life assurance companies profits.

Lloyds TSB yesterday announced that it has had to set aside a further £110M to compensate customers, who were mis-sold endowment mortgages.

This brings their total provision for mis-selling endowments to £360M.

Thursday, September 02, 2004

Back To The Future

Which has just issued a report, the findings of which could have been based on the experiences of the owners of endowment policy holders who were sold these underperforming white elephants in the 1980's.

The sad, and rather alarming, feature of the report is that it is based on research carried out by Which, this year.

Which checked out approximately 40 financial advisers, in well known banks and building societies; only three of these "professionals" offered satisfactory advice.

The "revelation" of the report was that advisers concentrated on selling life assurance, rather than on giving advice.

Sound familiar?

Remember when we were told that the smart way to cover a mortgage was with an endowment policy?

Among those "professional" institutions visited were Abbey, Halifax, HSBC, Lloyds TSB, NatWest, Nationwide and Northern Rock.

It seems that the advisers did not make it clear that they were only able to recommend in house mortgages. This is a clear breach of the Mortgage Code.

In other words, despite the endowment policy mis-selling debacle (the biggest financial scandal of the century), it seems that not a single lesson has been learned by our trusted and respected financial institutions.

Based on this, are you confident that the financial institutions will handle your endowment complaint in a professional and unbiased manner?

I suggest you sign my petition, if you are worried.

Monday, March 22, 2004

Reuters report today that Aviva, the UK's largest insurer, has increased its provisions for potential mis-selling claims on endowment mortgages from £50M to £80M.

In its annual report, published today, Aviva said it did not believe there would be any material effect on its shareholders from costs arising from the investment linked mortgages.

Approximately 6 million people in the UK face a £40BN shortfall on these underperforming policies.

Companies have paid out more than £670M to compensate policyholders.

The FSA has fined five companies, including Royal & Sun Alliance and Lloyds TSB, over £5M for misadvising clients.

Sales of endowment mortgages peaked in 1988, when they made up 83% of the market, but have since fallen to about 5%.

Wednesday, December 04, 2002

I see that the FSA has fined Abbey Life £1M for mis-selling endowments between 1995 and 1999. Nice to see some action, albeit it a little slow, taking place.

As a consequence, Lloyds TSB has set up a £165M provision to cover compensation payments to an estimated 50000 customers; who were mis-sold their policies.

Now how about the FSA making a ruling on the other companies who mis-sold these products; which are clearly not “fit for purpose”.