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Sesame’s parents promise £45m cheque to cover liabilities

Sesame’s parents promise £45m cheque to cover liabilities

Aviva and Friends Life have offered Sesame a combined £45m to cover adviser liabilities, a spokesperson for the group confirmed to FTAdviser.

Aviva, which bought Sesame’s previous parent Friends Life earlier this year, has offered Sesame £25m to cover liabilities they may struggle to meet from their own coffers, which have been hit by a series of regulatory fines in recent years.

Friends Life has also promised a further £20m to fund the costs of past business reviews and restructuring of the business.

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A spokesman for Aviva said: “The financial support may be used to pay any liability which SBGL or its subsidiaries believes it will be otherwise unable to pay using its own cash or other assets, costs associated with past business reviews and the costs associated with any future restructuring of SBGL and its subsidiaries.

“As we have previously stated, we are supporting Sesame Bankhall Group in building a profitable, sustainable and attractive business in its chosen markets.

“We are therefore providing financial support that Sesame Bankhall Group can call upon in the event that it is required in the next two years as it continues to build its business in line with the strategy outlined at the end of March.

“This financial support will only be called upon if required over the course of the next two years as Sesame continues to build a profitable, sustainable and attractive business. We are supporting Sesame in achieving that objective”.

In October, the Financial Conduct Authority fined Sesame £1.6m over ‘pay-for-play’ restricted panel deals which breached its inducements rule. This was the fourth fine the adviser network received from the regulator in a decade.

In September last year, FTAdviser revealed a Sesame past business review into pension transfers may mean advisers have to pay thousands of pounds relating to cases where ‘unsuitable’ recommendations were assessed to have been given.

This came in the wake of results in March which revealed the network had made a loss of £19m in the previous 12 months - double the loss recorded in the preceding year - in part due to the review.

The group support comes after Sesame Bankhall Group topped the Financial Ombudsman Service’s list of most complained about advisory firms over the last half of 2014.

According to Fos data, the Friends Life owned network had 142 complaints between July and December referred to the service.

Most of these, 45, related to pensions and decumulation while another 29 related to PPI.

Turning to future prospects for the advisory business last week, Sesame Bankhall Group’s executive chairman John Cowan committed to developing the network’s mortgage advice business.

He was speaking at Sesame Bankhall Group’s first national mortgage conference, held on 1 July in Burton-upon-Trent.

Mr Cowan, who will be closing Sesame’s appointed rep network for wealth advisers at the end of this month, said he was focusing on developing a profitable re-structured business, which will act in the best interests of mortgage advisers and their customers.