The Real Message from the latest Coutts / AIG £748M bailout ?

Ark_Welder

http://www.fsa.gov.uk/pages/Library/Communication/PR/2011/093.shtml

There were a number of serious failings in the way the Fund was sold. In particular, Coutts:

• generally informed customers that the Fund was a cash fund which invested in money market instruments and could be seen as an alternative to a bank or building society account. However, a significant proportion of the Fund’s assets did not meet this description and customers may have misunderstood the true position about the risks they were assuming;
• failed to have an adequate sales process in place for the Fund. Advisers were given inadequate training about the risks and features of the Fund. Nor did Coutts’ sales documentation accurately or adequately describe the Fund and its risks;

ChiefGrasscutter

Well actually a considerable number of my fellow employees had the AVC's part of their pension with Equitable Life.
This was when I was working for a large engineering group - so we are not talking about a handful of employees here - more a case of how many thousand employees.

That I didn't was mostly by chance - we were given 3 companies to choose from and I chose one of the others.

2sides2everystory

ChiefGrassCutter wrote:

This was when I was working for a large engineering group - so we are not talking about a handful of employees here - more a case of how many thousand employees.

Fair enough - I think by the late 90s before Equitable Life all went wrong they had a marketing splurge which is how I ended up getting a quote from them. Did your documents have a crown type motif with some black and red and gold on them or did I really dream it?

feesarefare wrote: »

Why does this case differ from the Barclays /Aviva case? or perhaps you had a rant about that as well?

I promised my doctor I wouldn't let either of those names affect my blood pressure again.

Edit: I wasn't dreaming - I've found it! Good old Daily Mail

'thus do we, but not for ourselves' - the thus and the we and what was done or not done was never clear !

2sides2everystory

feesarefare wrote: »

... can you retrain a shark?

Aren't they a bit like Free Willies ? I mean you can try, and they may even respond and cuddle up to you for a bit, but even though their dorsals might go a bit limp they still have big teeth and I imagine halitosis remains a lifelong detracting feature. However they don't half swim fast when they want out. Then when you least expect it they come back for sequel after sequel ...

Instead of worrying about went on, worry about what's still going on!!!

You got that right. Hence my debunking of the £6.3M fine frontal news spin, and my highlight of the demotion of the real story of the enormous taxpayer bailout now so easily 'officialised' behind the spin.

2sides2everystory

feesarefare wrote: »

When the employer picks up the compensation what's the disincentive to miss sell if your an adviser?

There is none. Far from it. Being disinclined to sell a pup promoted by your employer will now quickly mark you out as a trouble-maker.

Financial services "mis-selling" has always been predominantly a myth and a misnomer going right back to Low Cost Endowments. It is the corporate disinclination (despite it leading to clear reneging on promises) to suffer losses, reduced profits or even just fear of being seen to lose market share to racy new upstarts that started it and then the usual psychological problem of getting away with it and going further next time just crescendo-ed the whole business into the depths of depravity.

gokuaiba

Still should be free if Daddy has got millions?

John_Pierpoint

2sides2everystory wrote: »

Well clearly there are special investment services uniquely available to top people (and we are talking just 247 Coutts customers here) so rather than the taxpayer bailing them out as a last resort, don't you think their investments should simply be allowed to fail with the natural-market-forces-driven redistribution of wealth to the "winners" just like has happened to our pensions ?

£748M/247 = £3M each. Tough titty I say if they took the best investment advice the country has to offer and it failed them personally. Diddums.

And if the whole bank goes bust, the rest of us will get bailed out to the tune of the first £85K ??????????

2sides2everystory

gokuaiba wrote:

Still should be free if Daddy has got millions?

I said quite clearly yesterday that a university education is not about who Daddy is or what he has accumulated. I strongly believe that the government's Higher Education policies should put all young people who want to extend their education to a university education on as close to a level footing independent of their parents wealth, as possible.

Clearly that isn't so easy, without forcing students to live lives cut off from their parents, but save for foodparcels and laundry facilities, isn't that what undergraduates have largely inflicted upon themselves since time immemorial ?

Why do you think I should change my mind overnight? Are you one who believes that verily the sins of the fathers shall be visited upon the heads of the children, even unto the third and fourth generation or something?

John_Pierpoint wrote: »

And if the whole bank goes bust, the rest of us will get bailed out to the tune of the first £85K ??????????

How do you mean John? Are you highlighting a clear comparison to be made here between the fates of the lucky 247 benefiting from this new somewhat smoke-screened (and much more speedily finalised than any we have seen before?) bailout of up to an average £3M apiece and of the fates of "the rest of us" when our investments fail through effective bankruptcy?

I am inclined to think "in what ways does one need to be in it to win it" to come out smelling of roses from these adverse scenarios.

Uncertain

2sides2everystory wrote: »

How do you mean John? What was bust in this case? Is there a clear comparison to be made here between the fates of the 247 and this new somewhat smoke-screened bailout and of the fates of "the rest of us" and the notional FSCS limit ?

I am inclined to think "in what ways does one need to be in it to win it" to come out smelling of roses from these adverse scenarios.

I agree the £85K per bank government safety net has nothing to do with it.

Where we disagree is that you seem to feel that somebody with a lot of money should have less rights than somebody of modest means.

OK, forget Coutts and take the parent company RBS.

One of their so called Financial Advisors (i.e salesmen) comes round and persuades you to put £50K into one of their funds. A couple of years later it is only worth £30K so you complain, they reject and you go to the FOS what will happen?

If you can convince the FOS that RBS lied to you about the product and led you to believe your capital was safe then they will order RBS to reimburse you plus interest.

IF RBS persuade the FOS that you were given the proper warnings about the risks of the product you will lose.

In fact, as a mere mortal, you have more protection than the super rich as you may be able to argue that the product was unsuitable for your circumstances and therefore mis-sold. The mega wealthy will struggle with this one if the amount, however large, is a small proportion of their total wealth.

oldvicar

Uncertain wrote: »

I agree the £85K per bank government safety net has nothing to do with it.

There is no £85K government safety net.

The FSCS says this about itself:

Impartial and independent

We are independent of the government and the financial industry, and were set up under the Financial Services and Markets Act 2000, becoming operational on 1 December 2001 (although we still cover claims from before this date). We do not charge individual consumers for using our service

Q: How does the FSCS fund compensation payments?

A: The FSCS is funded by the financial services industry on a pay-as-you-go basis. We levy firms each year on the basis of our estimates of the compensation we are likely to have to pay out in a financial year. If our estimates ever turned out to be too low, or we were required to make additional payments, we are able to borrow additional funds during the course of the year and/or make additional levies.