Negligence Claims Rise
A survey carried out by Alexander Forbes International, notes that claims and notifications against professionals rose sharply, climbing to 603 in 2005-06, from 452 a year earlier.
The largest factor in that rise can be accounted for by claims for incorrect endowment advice, which rose to 20% from 12%.
Executive director Mark Bracher said:
"An increasing number of home owners are finding that their endowment policies will fail to pay off their mortgages and they are seeking recompense from their accountants for negligent advice.
This has been compounded by a number of specialised claims farmers who have made a business of encouraging home owners to seek compensation from their advisers."
This problem would be solved at the stroke of a pen, if the life assurance companies agreed to underwrite these useless underperforming products.
Friday, September 29, 2006
Thursday, September 14, 2006
Nationwide and Portman To Merge
Nationwide and Portman To Merge
Nationwide and Portman building societies announced on Tuesday that they plan to merge. They claim that they intend to provide a "compelling alternative to the big retail banks".
Portman members will receive a booklet explaining the planned merger, before the building society's Spring 2007 AGM. They will be asked to vote on the proposals. Nationwide members do not have anything to do.
If the vote goes in favour of the merger, it is planned to be finalised by September 2007.
Qualifying members of Portman will receive a pre-tax windfall worth a minimum £200, if the merger goes ahead. Only members who had a minimum of £100 in savings, or a balance of £100 on a mortgage, at the close of business on 11 September will qualify.
Nationwide members will not receive a windfall.
Nationwide and Portman building societies announced on Tuesday that they plan to merge. They claim that they intend to provide a "compelling alternative to the big retail banks".
Portman members will receive a booklet explaining the planned merger, before the building society's Spring 2007 AGM. They will be asked to vote on the proposals. Nationwide members do not have anything to do.
If the vote goes in favour of the merger, it is planned to be finalised by September 2007.
Qualifying members of Portman will receive a pre-tax windfall worth a minimum £200, if the merger goes ahead. Only members who had a minimum of £100 in savings, or a balance of £100 on a mortgage, at the close of business on 11 September will qualify.
Nationwide members will not receive a windfall.
Tuesday, September 12, 2006
Gherkin To Gobble Up Pru
Gherkin To Gobble Up Pru
It is reported that Swiss Re, the Swiss financial group known for the Gherkin in London, is to buy a large part of the UK operations of Prudential for around £5BN.
Swiss Re is reported to have offered to buy the closed life fund business of Prudential. The closed funds contain existing insurance policies, but no longer have new policies added to them.
The approach was made last month on the heals of Mark Tucker's, the CEO of Prudential, plans to shake up the Pru's underperforming UK operations.
Prudential's UK closed life book includes with profits policies and endowment mortgages. The value is estimated to be around £5BN.
The approach has raised questions about the Pru's commitment to Britain. There are rumours that some investors are keen for Tucker to scale back in Britain and concentrate on the faster growing business in Asia and the US.
The sale would give the Prudential £1.5BN. The value of with profits policies is split between shareholders and policyholders. Under the sale of a with profits business, shareholders receive a lump sum to account for the future profits they would have received from the policies.
Swiss Re has bought a series of closed life funds in America, and in Britain it bought Life Assurance Holding Corporation.
Nice to see that someone can make money out of the useless and underperforming endowment policies that were foisted on the unwary British public in the 1980's.
It is reported that Swiss Re, the Swiss financial group known for the Gherkin in London, is to buy a large part of the UK operations of Prudential for around £5BN.
Swiss Re is reported to have offered to buy the closed life fund business of Prudential. The closed funds contain existing insurance policies, but no longer have new policies added to them.
The approach was made last month on the heals of Mark Tucker's, the CEO of Prudential, plans to shake up the Pru's underperforming UK operations.
Prudential's UK closed life book includes with profits policies and endowment mortgages. The value is estimated to be around £5BN.
The approach has raised questions about the Pru's commitment to Britain. There are rumours that some investors are keen for Tucker to scale back in Britain and concentrate on the faster growing business in Asia and the US.
The sale would give the Prudential £1.5BN. The value of with profits policies is split between shareholders and policyholders. Under the sale of a with profits business, shareholders receive a lump sum to account for the future profits they would have received from the policies.
Swiss Re has bought a series of closed life funds in America, and in Britain it bought Life Assurance Holding Corporation.
Nice to see that someone can make money out of the useless and underperforming endowment policies that were foisted on the unwary British public in the 1980's.
Wednesday, September 06, 2006
Friends Provident In The Wrong
Friends Provident In The Wrong
In a rare piece of good news, it seems that the thousands of endowment policy holders who have been told that they have run out of time to complain about their useless and underperforming mortgage endowment policies have been offered some hope of compensation.
The Financial Ombudsman Service (FOS) has ruled that Friends Provident was wrong to impose a time limit on an endowment misselling complaint bought by a Mr and Mrs Smith, and has ordered the insurer to reopen their case.
The Smiths are physically disabled, and that has impacted the decisions of the FOS. However, endowment claims and legal specialists reportedly believe that this judgement could impact on all policyholders who have been time barred.
Tim Moore, of EndowmentClaims.com, said:
"This ruling suggests that if policyholders can prove that they were too confused, for whatever reason, to make accurate financial choices that the time bar may be invalid."
Under FSA rules, endowment policyholders who want to complain must do so within three years of receiving a "red" warning letter.
The FOS ruled that the Smiths were too confused to make an accurate decision about their mortgage options, as such the time bar was invalid.
The ombudsman is quoted as saying:
"I take the fact that Mr and Mrs Smith are unable to work as a good indication they may find coping with day to day normal life a challenge, and consider their circumstances are exceptional for the purposes of the mortgage endowment time bar rules."
A "coalition" of endowment claims experts including; Donns Solicitors, Endowmentclaims.com, CPH Financial Advisory Services, Whitehall Randall, and Michael Booth QC is reportedly ready to test whether it can be applied to all policyholders, not just the disabled.
Andrew Hummersone, from Whitehall Randall, said:
"In light of this ruling, our next step will be to send another 10 time barred cases to the FOS.
The minute a claim is rejected we will immediately seek a High Court review, with the aim of confirming once and for all whether time bars have any validity."
As ever with the endowment scandal, the lawyers and claim firms will do very well out of it.
However, as I keep repeating, the best way for all of the parties involved in this disgrace would be for the life assurance companies to do the decent thing and bite the bullet of underwriting these useless underperforming policies.
In a rare piece of good news, it seems that the thousands of endowment policy holders who have been told that they have run out of time to complain about their useless and underperforming mortgage endowment policies have been offered some hope of compensation.
The Financial Ombudsman Service (FOS) has ruled that Friends Provident was wrong to impose a time limit on an endowment misselling complaint bought by a Mr and Mrs Smith, and has ordered the insurer to reopen their case.
The Smiths are physically disabled, and that has impacted the decisions of the FOS. However, endowment claims and legal specialists reportedly believe that this judgement could impact on all policyholders who have been time barred.
Tim Moore, of EndowmentClaims.com, said:
"This ruling suggests that if policyholders can prove that they were too confused, for whatever reason, to make accurate financial choices that the time bar may be invalid."
Under FSA rules, endowment policyholders who want to complain must do so within three years of receiving a "red" warning letter.
The FOS ruled that the Smiths were too confused to make an accurate decision about their mortgage options, as such the time bar was invalid.
The ombudsman is quoted as saying:
"I take the fact that Mr and Mrs Smith are unable to work as a good indication they may find coping with day to day normal life a challenge, and consider their circumstances are exceptional for the purposes of the mortgage endowment time bar rules."
A "coalition" of endowment claims experts including; Donns Solicitors, Endowmentclaims.com, CPH Financial Advisory Services, Whitehall Randall, and Michael Booth QC is reportedly ready to test whether it can be applied to all policyholders, not just the disabled.
Andrew Hummersone, from Whitehall Randall, said:
"In light of this ruling, our next step will be to send another 10 time barred cases to the FOS.
The minute a claim is rejected we will immediately seek a High Court review, with the aim of confirming once and for all whether time bars have any validity."
As ever with the endowment scandal, the lawyers and claim firms will do very well out of it.
However, as I keep repeating, the best way for all of the parties involved in this disgrace would be for the life assurance companies to do the decent thing and bite the bullet of underwriting these useless underperforming policies.
Thursday, August 24, 2006
Berkeley Independent Advisers Network in Default
Berkeley Independent Advisers Network in Default
The Financial Services Compensation Scheme (FSCS) has declared Berkeley Independent Advisers (BIA) network in default, five months after Tenet acquired it for £700K.
The FSCS said that the decision had been made after receiving 300 claims for compensation from individuals, and after being advised by administrators PricewaterhouseCoopers that it did not have sufficient assets to meet the cost of redress.
Consumers will now be able to receive compensation for alleged poor advice from BIA's advisers in relation to endowment mortgages, investment bonds and personal pensions.
All other regulated financial services firms, including other advisers, will cover the bill for compensating former BIA clients through their annual levy to the FSCS.
Questions are being raised as to the speed with which BIA has been declared in default.
As repeated time and time again on this site, if the life assurance companies just agreed to underwrite their useless underperforming endowment policies much of this pain and extra cost could be avoided.
Failing that people, and the life assurance industry, are going to be saddled with this problem for years to come.
The Financial Services Compensation Scheme (FSCS) has declared Berkeley Independent Advisers (BIA) network in default, five months after Tenet acquired it for £700K.
The FSCS said that the decision had been made after receiving 300 claims for compensation from individuals, and after being advised by administrators PricewaterhouseCoopers that it did not have sufficient assets to meet the cost of redress.
Consumers will now be able to receive compensation for alleged poor advice from BIA's advisers in relation to endowment mortgages, investment bonds and personal pensions.
All other regulated financial services firms, including other advisers, will cover the bill for compensating former BIA clients through their annual levy to the FSCS.
Questions are being raised as to the speed with which BIA has been declared in default.
As repeated time and time again on this site, if the life assurance companies just agreed to underwrite their useless underperforming endowment policies much of this pain and extra cost could be avoided.
Failing that people, and the life assurance industry, are going to be saddled with this problem for years to come.
Tuesday, August 22, 2006
2006 Statistics
2006 Statistics
According to the 2005/06 annual review from the Financial Ombudsman Service (FOS), mortgage endowment complaints have fallen very slightly. However, insurance-related disputes are on the increase.
The total number of new cases considered by the Ombudsman in the year ending 31 March 2006 across all financial products increased to 112,923 from 110,963.
New mortgage endowment cases, which accounted for 61% of the total, dropped very slightly from 69,737 at 31 March 2005 to 69,149 a year later. This is the first time the FOS has recorded a decrease in complaints about these useless products since 2003/04.
Hardly a dramatic fall though, and indicative of the sorry regard with which the British public hold the life assurance industry.
According to the 2005/06 annual review from the Financial Ombudsman Service (FOS), mortgage endowment complaints have fallen very slightly. However, insurance-related disputes are on the increase.
The total number of new cases considered by the Ombudsman in the year ending 31 March 2006 across all financial products increased to 112,923 from 110,963.
New mortgage endowment cases, which accounted for 61% of the total, dropped very slightly from 69,737 at 31 March 2005 to 69,149 a year later. This is the first time the FOS has recorded a decrease in complaints about these useless products since 2003/04.
Hardly a dramatic fall though, and indicative of the sorry regard with which the British public hold the life assurance industry.
Monday, August 14, 2006
Shabby Abbey
Shabby Abbey
Abbey is reportedly still struggling to address and satisfy its endowments problems, some 15 months after Abbey was fined £800K by the Financial Services Authority (FSA) for its poor performance in handling endowment mortgage mis-selling complaints.
According to reports, endowment complaints companies say that paperwork frequently goes missing at Abbey and that their clients are waiting months for a decision from Abbey about their cases.
Keypoint Endowment Claims allege that it has 500 Abbey clients who have all been waiting over 8 weeks for a decision from Abbey. In fact the majority have waited over 3 months.
The FSA rules stipulate that endowment providers must decide whether to uphold or reject a mis-selling complaint within 8 weeks. In the event that they cannot stick to this deadline, they must send a holding letter to complainants. Failure to do this is a breach of the FSA rules, and risks disciplinary action.
John Gardiner, operations director at Keypoint, is quoted as saying:
"Abbey is by far the slowest, most disorganised and inflexible endowment company we deal with.
In more than half of the 500 outstanding cases I have with Abbey, the bank hasn't even sent a holding letter."
Abbey is owned by Banco Santander, and was fined £800K last year and ordered to reopen 50,000 mis-selling cases that it had previously rejected.
I repeat, much of this pain and mess could all be stopped if the life assurance companies bit the bullet and underwrote these useless products that we have been lumbered with.
Abbey is reportedly still struggling to address and satisfy its endowments problems, some 15 months after Abbey was fined £800K by the Financial Services Authority (FSA) for its poor performance in handling endowment mortgage mis-selling complaints.
According to reports, endowment complaints companies say that paperwork frequently goes missing at Abbey and that their clients are waiting months for a decision from Abbey about their cases.
Keypoint Endowment Claims allege that it has 500 Abbey clients who have all been waiting over 8 weeks for a decision from Abbey. In fact the majority have waited over 3 months.
The FSA rules stipulate that endowment providers must decide whether to uphold or reject a mis-selling complaint within 8 weeks. In the event that they cannot stick to this deadline, they must send a holding letter to complainants. Failure to do this is a breach of the FSA rules, and risks disciplinary action.
John Gardiner, operations director at Keypoint, is quoted as saying:
"Abbey is by far the slowest, most disorganised and inflexible endowment company we deal with.
In more than half of the 500 outstanding cases I have with Abbey, the bank hasn't even sent a holding letter."
Abbey is owned by Banco Santander, and was fined £800K last year and ordered to reopen 50,000 mis-selling cases that it had previously rejected.
I repeat, much of this pain and mess could all be stopped if the life assurance companies bit the bullet and underwrote these useless products that we have been lumbered with.
Monday, July 31, 2006
Endowment Claims Double
Endowment Claims Double
The Financial Services Authority (FSA) has doubled its estimate of how much firms have paid out in compensation for mis-selling endowment mortgages in the past, up to £2.2BN.
The FSA said the estimate is up to April 1, 2006.
The previous estimate of £1.1BN was up to the end of 2004.
Compensation payments have jumped sharply, £945M was paid in the year to April 1 with the number of complaints rising to 767,152.
In the year to April 1, 2005, compensation was £601M for 324,935 complaints. In 2003/04 compensation was £424M for 202,200 complaints, and before April 2003 compensation totalled £225M for 250,000 complaints.
Bradford & Bingley on Thursday announced its compensation provision would rise to £165M.
All of this pain could be avoided if the life assurance companies bit the bullet between their teeth, and agreed to underwrite these useless policies.
The Financial Services Authority (FSA) has doubled its estimate of how much firms have paid out in compensation for mis-selling endowment mortgages in the past, up to £2.2BN.
The FSA said the estimate is up to April 1, 2006.
The previous estimate of £1.1BN was up to the end of 2004.
Compensation payments have jumped sharply, £945M was paid in the year to April 1 with the number of complaints rising to 767,152.
In the year to April 1, 2005, compensation was £601M for 324,935 complaints. In 2003/04 compensation was £424M for 202,200 complaints, and before April 2003 compensation totalled £225M for 250,000 complaints.
Bradford & Bingley on Thursday announced its compensation provision would rise to £165M.
All of this pain could be avoided if the life assurance companies bit the bullet between their teeth, and agreed to underwrite these useless policies.
Thursday, July 27, 2006
Bradford and Bingley Hit By Claims
Bradford and Bingley Hit By Claims
Bradford & Bingley PLC today announced a larger than expected hit from endowment compensation claims by annoyed endowment customers.
Bradford & Bingley said that it was setting aside a further £89.4M, to cover the higher-than-expected number of complaints from customers who claim they were mis-sold endowment policies.
The total provisions now stand at £165.2M.
Bradford & Bingley CEO Steven Crawshaw said that he could not rule out further provisions in future.
Quote:
"It'd be a very brave person who would say that this is the last, but there are signs of light at the end of the tunnel."
Analysts at Keefe, Bruyette & Woods wrote in a note:
"The compensation claims for mis-selling are massive in relation to expectations and historical experience. While this should be a one-off, it is a negative for sentiment."
Bradford & Bingley also said underlying pretax profit, which excludes the endowment provision, came in at £164.2M in the six months to June 30, up 9% from £150M in the same period last year. Analysts had been expecting profit of £162.4M.
In my view a lot of heartache for those who bought these useless policies, and those who "manage" them, could have been saved if the life assurance companies simply underwrote them.
Bradford & Bingley PLC today announced a larger than expected hit from endowment compensation claims by annoyed endowment customers.
Bradford & Bingley said that it was setting aside a further £89.4M, to cover the higher-than-expected number of complaints from customers who claim they were mis-sold endowment policies.
The total provisions now stand at £165.2M.
Bradford & Bingley CEO Steven Crawshaw said that he could not rule out further provisions in future.
Quote:
"It'd be a very brave person who would say that this is the last, but there are signs of light at the end of the tunnel."
Analysts at Keefe, Bruyette & Woods wrote in a note:
"The compensation claims for mis-selling are massive in relation to expectations and historical experience. While this should be a one-off, it is a negative for sentiment."
Bradford & Bingley also said underlying pretax profit, which excludes the endowment provision, came in at £164.2M in the six months to June 30, up 9% from £150M in the same period last year. Analysts had been expecting profit of £162.4M.
In my view a lot of heartache for those who bought these useless policies, and those who "manage" them, could have been saved if the life assurance companies simply underwrote them.
Tuesday, July 18, 2006
Claims Firm Collapses
Claims Firm Collapses
As if things were not already bad enough for the millions of people stuck with underperforming and useless endowment policies, 6000 now face the added burden of having paid money to a claims firm that has been wound up by the DTI.
6000 people whose endowments failed paid £495 upfront to a claims company, Manchester-based Vickers Anderson Consulting.
It is unclear as to whether they will be able to get their money back.
What a mess!
As if things were not already bad enough for the millions of people stuck with underperforming and useless endowment policies, 6000 now face the added burden of having paid money to a claims firm that has been wound up by the DTI.
6000 people whose endowments failed paid £495 upfront to a claims company, Manchester-based Vickers Anderson Consulting.
It is unclear as to whether they will be able to get their money back.
What a mess!
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