Good Question!

Anyone made a call to any financial services company whatsoever these days where they haven't said something like we are experiencing a high level of activity and your call may not be answered for some time ?

— ALBA 🏴󠁧󠁢󠁳󠁣󠁴󠁿 🇦🇺 (@ALBACapMgmt) February 4, 2021

Tax Investigation Insurance

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Tax Investigation Insurance is an insurance policy that will fully reimburse your accountants (your tax return agent) fees up to £100,000 if you are subject to enquiry by or dispute with HMRC.

A Solar Protect policy will enable your Accountant (your tax return agent) to:

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The City of London Will Survive Brexit

There is much hoopla in the Remain leaning media about the potential demise of the City post Brexit. as ever, with the Remain camp, this scenario won't happen:

1 London is Anglo Saxon friendly both in terms of language and customs and practices; Paris, Berlin etc are not.

2 London has the infrastructure necessary for the 21st century financial services industry.

3 London has the cultural infrastructure (theatres, nightlife, restaurants etc) necessary to attract high calibre professionals.

4 London has the accommodation (offices and apartments) necessary to support the needs/size of financial services industry.

5 London lacks the red tape strangling enterprise on the Continent.

In short the City of London will survive!

London Outranks The EU

London is ranked most competitive in the world for financial services, while closest EU rivals rank at 15th & 19th https://t.co/eOR9wei6FT

— CPS Think Tank (@CPSThinkTank) September 7, 2016

Wise Financial Advice

Don't rely on your friends, or professional footballers, for financial advice: https://t.co/ukLwmN867R via @TimesMoney (£)

— Karen Barrett (@unbiased_co_uk) November 16, 2015

The Greed and Stupidity of Our Financial Institutions

As I have noted many times before, Britain's financial service industry has hardly covered itself in glory during the past few decades.

Sadly there is now another example of greed and stupidity that is coming to light.

According to the Telegraph middle-aged home owners are being denied cheaper mortgage deals because lenders claim that customers would be unable to afford the lower repayments after they retire. As a result, borrowers in their 40s and 50s are being trapped in loans with higher interest rates, leaving them on course for unnecessarily large bills in old age.

To add insult to injury, banks also refuse to cut borrowers' loan terms so that debt can be repaid sooner.

Mayur Vadhia, 49, was told by Halifax, Britain's biggest mortgage lender, that he did not qualify for a cheaper deal because he had no proof of his retirement income. Yet his existing loan with the bank was scheduled to last past retirement age at a higher rate.

Now that's just stupid!

It also seems that lenders are incorrectly applying new affordability criteria, which are designed for new borrowers.

Not only are the financial institutions stupid, they are greedy and incompetent as well!
 

Banks Embroiled In Another Mis-selling Scandal

As loyal readers know, I have on numerous occasions noted that the financial services industry in the UK has tarnished its image because of its greed and corruption, and seems intent on bringing about its own self destruction.

Today we see yet another example wherein its greed has been exposed because of yet another mis-selling scandal.

This time the mis-selling relates to card protection and identity theft insurance products by CPP Group. The BBC reports that UK banks have agreed to set up a £1.3BN fund to compensate the victims.

The Financial Conduct Authority (FCA) said that customers had been "given misleading and unclear information about the policies".

CPP Group and 13 banks and credit card firms will pay for the compensation.

Some seven million customers could now expect to receive letters from CPP from 29 August 2013, explaining how to claim compensation. Victims will receive 8% interest on the amounts being reimbursed.

During the period of mis-selling between January 2005 and March 2011, CPP sold 4.4 million policies and generated £354M in gross profit. A further 18.7 million policies were renewed during the same period, generating an income of £656M.

Many customers were put in contact with CPP when they rang a number on their new bank card in order to activate it. Many thought they were talking to their bank, but they were in fact being put in touch with a salesperson from CPP.

CPP then used the opportunity of the call to offer card protection insurance. If the customer bought the product, the bank got a commission.

CPP Group sold a card protection product costing about £30 a year, that was designed to cover losses if a card was lost or stolen. It said customers would benefit from up to £100,000 of insurance cover, but customers were already covered by their banks. Generally, cardholders are not liable for unauthorised card payments on lost or stolen credit and debit cards; ie the product was unnecessary.

Needless to say we can expect to see the "ambulance chasing" financial compensation firms jumping on this bandwagon and offering to reclaim victims' money back in exchange for a percentage; which of course is completely unnecessary,as the victims can reclaim the money themselves.

The Stench of Corruption and Greed Overwhelms Britain's Financial Services Industry

Britain's tarnished financial services industry and banking sector seems intent on bringing about its own self destruction. Over the years there has been a litany of scandals eg:

- endowment mis-selling
- subprime mortgages
- PPI mis-selling
- LIBOR fraud
- NatWest computer meltdown
- Northern Rock, RBS etc etc to name but a few

However, it seems that the industry is determined to add to its list of self inflicted shame and dishonour. Step forward the usual suspects ie; Barclays (a familiar name), HSBC, Lloyds and RBS which have all admitted to mis-selling interest rate hedges to small and medium sized business customers.

Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland have all agreed to immediately halt the sale of complex interest rate hedges to smaller businesses and have pledged to compensate potentially thousands of customers who have been screwed by them.

According to the Telegraph the FSA is of the view that about 28,000 businesses had been sold interest rate hedges.

Another nail in the coffin of the tarnished reputation of the UK's financial services industry.

The financial services industry is now fully immersed in its own self created shit, and quite clearly is on the verge of implosion.

HSBC Fined £10M

The UK financial services industry has yet again blotted its copybook. This time HSBC's name has been added to the "wall of shame".

The Financial Services Authority (FSA) have fined HSBC £10.5M, and ordered it to pay £30M in compensation, for mis-selling investment products to elderly customers needing long term care.

The FSA said that between 2005 and 2010, a subsidiary of HSBC, NHFA (previously known as the Nursing Home Fees Agency) advised 2,485 customers to invest in investment bonds, and other asset-based products, to fund long-term care costs.

The average age of these customers was 83, a sample review suggested that almost 90% of these cases were mis-sold.

The average amount invested per customer was about £115K.

The FSA ruled that this advice was unsuitable, because these products were designed to be held for a minimum of five years. However, many of these customers were not expected to live this long!

Coupled with the disgraceful mis-sale of this unsuitable product was the fact that the product had charges.

The Telegraph quotes Tracey McDermott, acting director of enforcement and financial crime said:

"NHFA was trusted by its vulnerable and elderly customers, It breached that trust to sell the unsuitable products. This type of behaviour undermines confidence in the financial services sector.

This penalty should serve as a warning to firms that they must have the right systems and controls in place to manage and identify risks when they acquire new businesses. A failure to do so can lead not only to detriment to their customers but to significant reputational and regulatory cost."

Well done HSBC for "enhancing" the reputation of Britain's financial services industry!

Pensions Crisis Looming

The Office for National Statistics (ONS) has released figures that show that the number of people contributing to personal pensions fell from 7.6M in 2008 to 6.4M in 2009 (a fall of 1.2M).


Contributions by savers into personal pensions fell by over £2BN between 2008 and 2010, from £20.9BN to £18.7BN.

For why?

People are skint, returns are abysmal and the financial services industry in the UK is despised.

The future is bleak indeed!

Barclays To Settle All PPI Claims

Barclays has confirmed that all PPI customers who made a complaint before April 20 will be reimbursed the total value of all their premiums, plus 8% interest.

This is a hefty kick in the teeth to the "financial ambulance chasing" claims firms, who offer to help PPI victims reclaim their premiums (this is in fact a simple and free task) in exchange for a hefty percentage of the reimbursement secured.

Needless to say these "financial ambulance chasers" will doubtless find another mis-selling trough to stick their snouts into, as the UK's financial services industry is bereft of scruples and the UK public bereft of financial commonsense.

Metro Bank Opens Its Doors

Britain's financial services industry has, without a doubt, a well deserved lousy reputation for customer care, honesty, service and providing reliable decent products.

Therefore it is to be welcomed that Metro Bank, the first new high street bank in 100 years, has opened its doors today.

Metro Bank claims that it will revolutionise British banking by offering retail opening hours, unparalleled service (eg toilets in branches) and a simple range of products that will be suitable for everyone.

The first branch has been opened in Holborn. It plans to have 200 branches within 10 years.

The bank will keep its branches open from 8am to 8pm Monday to Friday, as well as from 8am to 6pm on Saturday and from 11am to 4pm on Sunday. The bank will be closed on four days of the year; Christmas Day, New Year's Day, Good Friday and Easter Sunday.

However, as with all matters financial, it pays to look at the fine print.

Sadly the products offered are not yet competitive enough to appear on the best-buy tables, many in fact pay below the industry average.

The question is will this bank survive ten years to grow and prosper, or is it just a short term gimmick?

Eager To Repossess

The Financial Services Authority (FSA) has fined GMAC-RFC, a mortgage lender, £2.8M for mistreating customers who fell into arrears.

GMAC-RFC also has to repay £7.7M, plus interest, to 46,000 borrowers.

The FSA said that the company levied unfair charges on borrowers who fell into arrears with their repayments, and was too eager to repossess their customers' homes.

GMAC-RFC, having been fined, is quoted by the BBC:

"In hindsight, we fully accept that for certain fees our estimates of the costs were not proportionate to the additional administration actually required.

We will be writing to customers who incurred these specific charges when in arrears and will re credit the charges plus interest."

So that's alright then!

Let The Good Times Roll!

It is heartening to know that the green shoots of recovery are sprouting in the world of investment banking.

A mere 12 months after the near collapse of the global financial system (the UK came close to people not being able to draw cash from their own bank accounts), investment bankers are about to enjoy a record bonus season.

Stock markets in London and New York are enjoying one of the strongest bull runs in decades, and investment banks are preparing to announce huge profits.

The Times reports, for example, that the average London worker at Goldman Sachs will receive approximately £467K in salary and bonuses (a 13% rise compared with 2007 and double the average in 2008).

So that's good news then!

Ripping Off The Over Fifties

The Times reports that building societies are ripping off the over fifties wrt interest rates offered on ISA accounts.

As from yesterday anyone over 50 will be able to invest an extra £1,500 into their cash Isas, as their allowance will rise from £3,600 to £5,100.

However, "institutions have launched a wealth of accounts to attract older savers' cash — but some are offering poorer rates than their 'mainstream' deals".

Fair comment.

However, as we know, the financial services industry does not discriminate when it comes to ripping people off. The British consumer has been, and continues to be, ripped off by the financial services industry viz:

- bank charges
- PPI
- endowment mortgages
- interest rates
- mortgage charges etc etc

In the eyes of the financial services industry we are all "prostrate cows" ready for slaughter.

Growth

It seems that the green shoots of economic recovery, at least in the service sector, are returning. Q3 2009 saw the first period of growth in the financial sector in two years.

PricewaterhouseCoopers and the Confederation of British Industry (CBI) report that the number of firms reporting rising business volumes outweighed fallers by 31% to 24% (a positive skew of 7%).

However, the report predicts that up to 60,000 financial services jobs could be lost this year.

Named and Shamed

The Financial Ombudsman Service (FOS) has finally had the guts to name and shame the worst offending financial services companies in the UK, being those companies that have logged the highest number of customer complaints.

Congratulations to the five major high street banks, which account for the majority of the complaints.

The big five have managed to notch up a staggering 38,286 complaints, out of a total of nearly 70,000 received by the ombudsman in the six months to 30 June 2009.

- Lloyds (which includes HBOS) came top to the league of shame with 15,233 complaints.

- The Royal Bank of Scotland group scored 5,533 of the complaints received by the ombudsman.

- Barclays scored 8,283.

- Abbey scored 2,493 complaints.

- HSBC group scored 2,363 complaints.

- Alliance & Leicester scored 1,786.

The chairman of the FOS, Sir Christopher Kelly, was more than unimpressed. He is quoted:

"I will now be writing to the chairmen of the financial businesses that generate the largest proportion of our complaints workload, to ask them to consider very carefully both their own complaints performance – as reflected in the data we are publishing today – and the complaints performance of their competitors."

As I have noted many times before, the financial services sector in the UK treats its customers appallingly.

Why does it use the word "services" in its moniker, given that "service" is the one thing that it doesn't provide?

Truly Dismal

Should anyone need convincing as to how badly served the people of Britain are by the financial services industry then all they have to do is to look at the figures covering complaints made to the Financial Services Authority (FSA).

During the period 2006 to 2008 the overall number of complaints increased by 5.7%, from 1.4 million to 1.48 million (8,000 per day!).

The worrying aspect being that these are just the complaints that have been registered by consumers, there are many more.

The British consumer is ill served by the financial services industry.

The Last Gasp

In the last gasp of a dying government, Gordon Brown attempted to play to the gallery and divert attention from the fallout of his 50% tax rate, by calling for an international debate on a possible cap on bonuses in the financial sector.

Debate there may well be.

However, there isn't a cat's chance in hell of their being a unified international agreement on a cap.

This ploy by Brown is designed to take people's eyes off the flight of capital and skilled resources from London, in response to his 50% tax rate and higher NI contributions.

Brown has bankrupted Britain, and is crippling London's role as the centre of the global financial services industry.

The Banking Rip Off

As I have noted before, the financial services industry in the UK has an unfailing knack for digging itself deeper into its own shit.

Not content with foisting endowment mortgages, PPI, excess credit card rates, bank charges and other insults on its hapless customers it now seeks to milk them further by "imaginative" and outrageous profiteering charges on mortgage arrears.

Many thousands of homebuyers, many of whom are unemployed, face profiteering penalty charges on top of their regular monthly mortgage repayments.

The Council of Mortgage Lenders (CML) report that the number of mortgages in arrears by three months or more has reached 270,400 (compared with 152,700 at the end of the second quarter of 2008).

Moneysupermarket.com report that Lloyds Group is charging £206 for repayments three months or more in arrears.

GMAC and Abbey charge penalties of £50 and £40, respectively, when the borrower is only one month in arrears.

Halifax charges £35 for every call/letter wrt mortgage arrears, and then has the barefaced cheek to charge £100 for debt advice.

The FSA has a Code of Conduct that requires that lenders treat customers fairly sympathetically.

Evidently the banks haven't read that code, or simply do not care about it.

The Treasury Select Committee is not impressed with either the banks, or the hapless and hopeless FSA. It has attacked the FSA for sitting on its hands.

Britain's financial services industry is rotten to its core.

Until the FSA is expunged from history, and replaced with a more pro active assertive regulatory body, the hapless British consumer can only expect more of the same and continue to be ripped off.

Those who currently are enjoying the fruits of their profiteering should bear in mind the wise adage:

"What goes around, comes around".

Germany and France Return to Growth

Germany and France have surprised the markets and have returned to growth in Q2 this year, whilst the UK remains stuck in recession.

How has this come about?

1 The UK economy is far more closely tied to the fate of the financial markets than France and Germany.

2 France and Germany have spent far more money propping up their domestic economies via "cash for clunker" payments and job support schemes.

However, before the champagne corks are popped in Berlin and Paris, a word of caution. The government support schemes are coming to a close, both Germany and France will need to increase their exports if the upturn is to be maintained.

One positive quarter does not necessarily make a trend.