Sesame Ltd and Project Minerva

Peterjacobs

Hi all, not sure if this is the best place for this but I transferred my pension a few years ago. It has been performing really well over the last few years and recently I received a letter from a firm called Sesame.

It also mentions The consulting Consortium and Project Minerva. It looks like spam and I was really worried. I called my adviser and she said she can't comment about it and that I should call Sesame.

I called Sesame and they really didn't instill any confidence in me. They talked about getting my authority but couldn't really say what they want to do except review the plan because the FCA asked them to.

I asked them for proof of this and they said it cannot be provided.

As far as I can work out they are just trying to get hold of my information - especially after a quick google search about Sesame / FCA - It appears Sesame have been inundated with fines from the FCA - in the MILLIONS.

I have so far decided that I do not want what appears to be a scally company looking at my pension, I will file the paperwork where it belongs - THE BIN!!

Anyone else had this?

PJ

mgdavid

Several hundreds of small FAs (not IFAs as far as I can tell) are members of the Sesame network, apparently using their systems and recommended products and providers. Is your 'adviser' one of them?

I was recently approached by one, who had taken over a database containing my details when another adviser retired. I did some research similar to you and asked to be removed from their lists.

I would be checking on your adviser very thoroughly; they need to be listed on http://www.unbiased.co.uk
NOT the apparent scam site https://www.unbiased.uk.com

Hopefully one of the industry insiders can confirm.

dunstonh

Between two dates in 2010 and 2012, Sesame was unable to prove that it adequately checked client files on its sampled review cases. So, the FCA told them to contact all clients that did a pension switch between those dates and offer them a review.

It is a genuine letter but it is only asking if you want your advice reviewed by a third party if you believe the advice to be unsuitable. If you are happy with the advice given then you say no and return the form. if you are unhappy about the advice given then you say yes to a review and return the form. If you bin the form they will normally send out a chaser a month later.

As far as I can work out they are just trying to get hold of my information - especially after a quick google search about Sesame / FCA - It appears Sesame have been inundated with fines from the FCA - in the MILLIONS.

Sesame are the largest intermediary network in the UK. Almost half of all advisers use their services either through compliance services or network provision. Fines in the millions are not unusual for firms. Whilst enormously frustrating for those in the industry when they happen, Sesame's dont appear to be much different than what other network/compliance companies have been getting. However, as the biggest, they tend to get a lot of coverage.

it is important to note that the only criteria to get the letter is to have taken out a pension via an adviser that uses Sesame network between those two dates. So, if you are happy, then so no and return the form. Its only really for those that think their advice may not have been good.

mgdavid

Dunstonh - genuine question - did you mean to suggest that it is commonplace and not much to worry about for such a firm to be fined 6- and 7-figure fines regularly, i.e. four times in 10 years?

dunstonh

mgdavid wrote: »

Dunstonh - genuine question - did you mean to suggest that it is commonplace and not much to worry about for such a firm to be fined 6- and 7-figure fines regularly, i.e. four times in 10 years?

It's not ideal and certainly not desirable but the big players are getting multiple fines frequently for what is mostly historic issues. Hopefully, we should start to see fines drop off in the years to come when all these historic issues have been dealt with.

bmm78

The FCA's modus operandi is to shoot at the biggest target first. Bigger fines for bigger names attract the most headlines and get their message more strongly.

The firms who are fined regularly are not necessarily the worst offenders; they are often the most visible.

dunstonh

Neil Woodford said recently that he was so concerned over the FCAs fines being based on ability to pay that he was reducing his holdings in HSBC.

There was a compliance network that recently got away with no fine despite the shortcomings being worse than Sesame as they could not afford to pay the fine.

The old regulator model was to not tell you how to do things. They would let you interpret their loose guidelines and then if they didnt like it, they would fine you and make you change it. The FCA do appear to be a lot better on that front.

DaveMcG

As dunstonh suggests, this is almost certainly a review of past business as a result of FCA enforcement and your adviser at the time would have been (still is?) part of the Sesame network. Normally advisers are instructed not to discuss such reviews with clients.

These reviews generally cast a very wide net so being part of the exercise does not indicate any problems, but it is probably in your interest to co-operate with a review.

jamesd

Peterjacobs wrote: »

recently I received a letter from a firm called Sesame. ... It also mentions The consulting Consortium and Project Minerva. It looks like spam and I was really worried. I called my adviser and she said she can't comment about it and that I should call Sesame.

I called Sesame and they really didn't instill any confidence in me. They talked about getting my authority but couldn't really say what they want to do except review the plan because the FCA asked them to.

The letter is genuine and you should work with Sesame in whatever way you believe is appropriate. You can read the FCA decision which prompted the reviews to get more information.

For IFAs to be directly regulated by the FCA has significant costs. For this reason and others there are network firms like Sesame that are authorised by the FCA and the IFAs are technically their appointed representatives. Such arrangements are positive for customers in part because the network acts as a second opinion on the otherwise independent IFA and can do things like research that reduces the chance of trouble.

There is one potential disadvantage for those using them because sometimes a network will only allow the financial advisers using it to offer "restricted advice" so by definition they cannot be "independent financial advisers" any more because that requires being willing to advise on all options. So today if you see that an adviser is using Sesame you know that they cannot be an IFA because Sesame has chosen the restricted advice only option. So for example one person I know of that used Sesame changed their description from Independent Financial Adviser to "Restricted Whole of Market Adviser". Provided they are giving proper advice from the whole market in the areas where they give advice this is not a concern, except that you can't be sure they are because their registration no longer requires that.

When IFAs give advice they have to both give good advice and keep the records to prove that they gave good advice. Sometimes all that a check means is that the paperwork isn't in place any more. Other times it can indicate a real problem. In a pension transfer case it might not have been to the lowest possible price deal for example, but might be to one that was more suitable for some other reason.

The issue you've been contacted about will not be related to the investment performance, good or bad. Rather it will be whether the place the pension money was moved to was the best deal for your circumstances. Similar investments held at other places would have done just as well, and that's why it's not likely to be the investment performance that is the issue.

There is no harm in you doing something like asking Sesame to tell you what information in your file prompted them to contact you. You can then use that to decide whether you want them to do more work on it or drop it. If in doubt, just ask them to do the work, without expressing dissatisfaction about your IFA's service, but saying that it's for due diligence on your part in case there is something there that you weren't aware of.

Of more concern is things like Sesame being found to put its own interests above that of clients in pay for play arrangements. But that's a different thing from what you are involved with, unless it happens to be the case that your pension was moved to one of the firms involved in such arrangements, instead of another that would have been more suitable for you.

jamesd

dunstonh wrote: »

Between two dates in 2010 and 2012, Sesame was unable to prove that it adequately checked client files on its sampled review cases. So, the FCA told them to contact all clients that did a pension switch between those dates and offer them a review.

Expanding on that:

Between 26 July 2005 and 8 June 2009 the FCA found that Sesame breached principle 9, maintaining a proper relationship of trust with customers:

• "In every case reviewed by the Authority, Sesame failed to explain to customers all of the key risks and failed to give a balanced view of the advantages and disadvantages of the Keydata Products"
• "none of the sales of Keydata Products in the 37 files it reviewed was suitable"
• "40% of customers sought to invest in a product with a guaranteed income or capital growth. 35% of the suitability letters provided to customers and sampled by the Authority stated incorrectly that income or capital growth was guaranteed. While the Keydata Products’ stated aim was to provide regular income or capital growth, this was not guaranteed".
• "from the Authority’s sample, not a single customer was properly advised that the income or compound growth offered was conditional on the performance of the underlying assets"
• Sesame also did not take reasonable care to verify that the advice given by its authorised representatives - the IFAs - was suitable and correctly represented the risks of the products.

Between 5 July 2010 and 21 September 2012 Sesame breached principle 3 by failing to have proper oversight, specifically including that

• "it failed to identify and monitor sales of products and funds which were not suitable for most customers"
• "in terms of Sesame’s culture and the importance of treating customers fairly, the language used internally within Sesame supported an incorrect view that ARs are Sesame’s customers rather than the end retail customers"

Hence the requirement that Sesame redo the work that appeared to have been done insufficiently well originally.

addedvaluebob

You should ask them to review your transfer. The Consulting Consortium are an independent compliance company that undertake a lot of reviews of past sales to see if they were correct and met the rules applying at the time, so they are not a scam company but are employed by Sesame because they need to show distance between the original sales process and this review.

Whilst you may be happy with the performance since the transfer TCC will also look at a comparison between where you were and where you are now and will also look at the costs and charges to see if these were properly disclosed at the time and the effect these would have on your eventual fund value on retirement.

At the worst, they will identify the transfer was not appropriate and compensate you accordingly, at best you will have the piece of mind that the advice was correct and has been independently reviewed at no cost to you