View more on these topics

Sesame sets aside £31m for customer redress

Sesame Bankhall Group has set aside £31m for customer compensation following a review by parent company Friends Life.

Friends revealed the complaints provision in its half-year accounts last week, adding there was “considerable uncertainty” over the outcome of its review.

The FCA fined Sesame £6m in June 2013 for failing to ensure investment advice was suitable and for failings in systems and controls governing oversight of its appointed representatives.

Friends says it does not expect costs arising from the latest complaints provision to have a “material adverse impact” on the parent company. It says: “The company has given a letter of support to SBG to assist them in meeting their liabilities as they fall due. 

“A number of business reviews are currently being undertaken in these companies and provisions of £31m have been included in respect of customer redress.

“There is considerable uncertainty surrounding the outcome of these reviews, the number of future complaints and the associated costs for dealing with redress and complaint-administration activities.”

But SBG executive chairman John Cowan says the provision in the Friends accounts is misleading as the network has so far used only £4m of a total £35m to cover past reviews.

Cowan says: “Friends had a £35m provision against past business reviews and administration support. 

“There has been capital support from Friends every year since they have owned [SBG].

“We have used £4m of that in the first half of the year. Therefore the figure has gone down from £35m to £31m.”

Of the £4m provision used to date, he says: “It is compensation from our own past business reviews and assessment of cases where people have been poorly advised.”

He adds that the past business reviews and tightening of controls are designed to get the business on a stable footing.

“We have done a lot of work on a project to improve the quality of the business and we are catching cases early where there has been poor advice and we want to put the customer back where they ought to be,” he says. 

“We are on a journey to clean this business up and get it into good shape.”

Cowan says some of the cost of making payments to clients may be recoverable from professional indemnity cover or individual representatives.



Analysis: The good and bad in remortgage data

Two headlines on illustrate how fast the market can change, how data does not always fully reflect opportunity or potential and how bad news for some can be good news for others. The two stories, ‘Remortgages continue to decline after 12 per cent slump in June’ and ‘MPC edges closer to base-rate rise’, were […]


AIG acquires Ageas Protect for £181m

American International Group is buying the UK protection arm of Ageas in a deal worth £181m. AIG says it expects to complete the deal by the end of the year, subject to regulatory approval. Ageas Protect, formerly Fortis Life, was launched in 2008 by Martin Werth, now chief executive at UnderwriteMe. It will join AIG’s […]


Letters: There’s a place for BTL lending to first-timers

Star letter I read with interest Nigel Stockton’s article on buy-to-let gaming. While he is correct in saying there is a risk of products being abused in this way, he goes too far in suggesting NatWest and Virgin Money should withdraw buy-to-let lending to first-time buyers.    There are many clients for whom buying a […]

A guide to automatic re-enrolment

Since the introduction of auto-enrolment in 2012, it has been a popular topic in the press. Recent media focus has been geared towards small and micro employers; however attention is set to return to the UK’s largest businesses as they prepare for re-enrolment. Johnson Fleming has produced a useful guide that provides essential information to help you […]


News and expert analysis straight to your inbox

Sign up