This week’s Personal Column – 15 July 2016

By 14th Jul 2016 Apr 26th, 2017 Communications, Personal Column

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Finance News

Court rules in favour of Personal Touch

Court of Appeal judges have backed Personal Touch’s decision to terminate an appointed representative’s contract, after the business allowed unauthorised members of staff to carry out fact finds.

What does this mean?photo-1465776702172-defce4b4d574
Our members have peace of mind with this fantastic result, as it endorses our approach in:

  • Acting on our principles.
  • Treating customers fairly.
  • Providing good customer outcomes.
  • Maintaining robust systems and controls.

What happened?
SimplySure was authorised to sell private medical insurance (PMI) as an AR of Personal Touch between December 2006 and January 2009. They were found to be in breach of their AR agreement. A risk assessment visit in January 2009 identified that SimplySure used employees, who’d not been authorised by Personal Touch, to conduct an initial fact find conversation before referring clients to an authorised adviser.  As a result, the firm’s authorisation was terminated.

What did the Court conclude?
In an earlier High Court ruling, the judge decided employees who interviewed potential clients for the first part of the fact find were conducting regulated activity. Since the activity was being carried out by an unauthorised member of staff, he concluded that SimplySure was in breach of the AR agreement. 

Despite this, the judge decided Personal Touch hadn’t been entitled to terminate the agreement; therefore SimplySure was entitled to damages.  For reasons that weren’t made clear in his judgment, he also decided Personal Touch was liable to pay post-termination renewal commission to SimplySure indefinitely, notwithstanding the termination of the relationship between Personal Touch and the firm.

 What did we do?
Personal Touch lodged an appeal against this verdict, pointing to the judge’s acceptance that an unauthorised member of staff had carried out regulated functions and a lack of clarity in his reasoning in relation to the other issues.

The case was heard in April by a bench of three Court of Appeal judges in April, with Sir Stanley Burton QC giving the leading judgment, with which Lord Justice MacFarlane and Lady Justice Gloster concurred.

What were the key points?
The key points to the judgement were:

  1. The High Court judge correctly found SimplySure to be in breach of FSMA 2000 by placing unauthorised persons in a position where they were conducting regulated activity.
  2. Personal Touch were within their rights to terminate SimplySure’s contract in the circumstances.
  3. Personal Touch had no liability to SimplySure in respect of renewal commissions accruing after the contract was terminated.

 What were the implications of the ruling?
This ruling highlights the importance of ensuring that only authorised individuals are conducting regulated activities, such as completing fact finds and giving advice to clients.  It’s also important to understand that registered individuals aren’t authorised until notified in writing.  Such a serious breach of the AR agreement is likely to lead to serious consequences, including termination for individuals and firms. 


National Living Wage has not led to job losses

Employers have responded to the new National Living Wage (NLW) by raising prices or reducing profits rather than cutting jobs, according to a survey from the Resolution Foundation.

The wage, which requires employers to pay staff aged 25 and over at least £7.20 an hour, was introduced in April.

This report is the first snapshot of how firms have reacted to the NLW. It comes after the Office for Budget Responsibility predicted it would lead to 60,000 job losses by 2020.

The policy was announced in last summer’s Budget by Chancellor George Osborne, in what he said was a move to create a higher-wage, lower-welfare economy.

Workers aged 21 to 24 continue to be paid the National Minimum Wage of £6.70 an hour.

photo-1453230806017-56d81464b6c5The DIY chain B&Q, supermarket Tesco, coffee chain Caffe Nero and the John Lewis Partnership have all this year reduced some staff payments or perks. However, most have said the moves were unrelated to the 50p-an-hour increase in the NLW.

A spokesman for the Department for Business said:

“The government wants to move to a higher wage, lower tax and lower welfare society and the NLW is a crucial part of achieving this. It’s encouraging to hear that employers are investing in training and technology which will help to improve productivity. We recognise that employers are responding to the NLW in a variety of ways depending on their circumstances. The Low Pay Commission will recommend the level of the NLW going forward to make sure that wages rise to reward workers, while considering the impact on the economy.”


Source: BBC News (published 11 July)

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Mortgage News

Priding themselves on service

Working together is key to any successful partnership. West Brom believes they have all the tools to help you give your clients a first class service:

  • They’ve consistently assessed and initially underwritten new FMAs within 24 hours from receipt photo-1439242227927-6bbdaa925f19over the last 12 months (their SLA is 48 hours).
  • Once the initial underwriting of your case is completed, they’ll confirm any supporting documentation required.
  • The valuation will then be instructed – selected remortgages under 75% LTV will be processed using an automated valuation model.
  • For employed clients, they’ll require the latest payslip and last P60. They’d recommend that you upload these at the point of FMA submission to ensure a quick assessment of your application.
  • Once your FMA has been submitted, you can speak directly to an underwriter should you need to.
  • Service levels are published daily on homepage to help you manage customer expectations. 

They’re making things easier for you

As a result of your feedback, their website is now better than ever. Their how to submit business, literature and user guide pages have been introduced, in addition to their hints and tips on lending policy to help you get the very most from their award-winning service.

If you haven’t registered already, simply click here. You’ll need your appointed representative FCA number to do this. Once you receive your confirmation e-mail, go to to log in to the online system.

If you have any queries or require more information, please visit the West Brom for intermediaries new and improved website at or call your business relationship manager.

You can find out who your business relationship manager is by using the new business relationship finder. You can also contact the intermediary support team on 0345 241 3597 or by e-mailing

This information is for the use of professional intermediaries only. It is not a consumer advertisement and should not be displayed as such or handed out to the public. 


Source: West Brom E-newsletter (received 11 July)

Range expansion 

The Coventry for intermediaries is expanding their residential 10 year fixed range. This includes the launch of a market leading 2.39% 10 year fixed to 30.06.26, 50% LTV (£999 arrangement fee and ERCs apply).

The range gives the security of a fixed rate from 50%-65% LTV with a variety of fee options, and no booking fees. All products are available from Friday 8 July 2016.

For full details of their range, simply visit

Our mortgages are provided by Coventry Building Society and/or Godiva Mortgages Limited. The Coventry for intermediaries is a trading name of Coventry Building Society. 


Source: Coventry e-newsletter (received 11 July)

Product transfer service now available

Virgin Money knows you have strong relationships with your mortgage customers. Many will come back to you time after time for mortgage advice and some of those customers will have a Virgin Money mortgage. Virgin Money is delighted to announce that they’ve launched a product transfer service – meaning you can easily renew a customer’s mortgage at the end of their term.

And they’ll pay you a procuration fee when you do – after all, fair’s fair. Please check the procuration fees with Virgin Money. Their product transfer service is designed to be simple and smooth, keeping things straightforward for you and hassle-free for the great, how do you get started?
Once you’ve assessed the customer’s needs and provided a recommendation, you can renew an existing Virgin Money mortgage in five simple steps:

  1. Log in to VMO and choose the product transfer option from the main menu.
  2. Enter the customer’s mortgage account number and surname.
  3. You’ll have the option to make further account changes – additional borrowing, change of repayment type or change of term*.
  4. Select the new product from the options available.
  5. Complete the application and submit.

If you’d like more information, Virgin Money has produced a mortgage product transfer guide and sales aid. Or get in touch with dedicated BDM who’ll be happy to help.

There are partnerships and there are Virgin Money partnerships.

*A full affordability assessment may be required.


Source: Virgin Money e-newsletter (received 07 July)

Protection News

Business protection – customer story

One of the questions most frequently asked ophoto-1466995937966-2e6f29c6ed60f advisers is ‘How can I be sure the policy will pay out?’

Find out how one of AIG’s customers was able to protect his business when he became seriously ill by making a claim on his business protection insurance in this week’s blog.


Source: AIG e-newsletter (received 08 July)

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General Insurance News

Flood six months on

The Association of British Insurers says 90% of December’s floods are settled. They also said they support the introduction of flood measures in building regulations.

For the many homeowners and businesses hit by the December and January floods throughout the UK, six months on doesn’t necessarily mean business as usual, as industry bodies continue to calculate the final damage figure.

Estimates from the Association of British Insurers in June placed the final bill for all repairs, including storms Desmond, Eva and Frank, at £1.3 billion.

The most recent estimate for Desmond’s cost was £597 million for the insured property market alone. While the March estimate for the later storms, Eva and Frank, was £578 million.

The ABI reported more than 15,000 claims have been made, with 90% of those either fully or partially settled as of mid-June. The average cost per domestic claim was been around £50,000 and the ABI said this is indicative of the level of damage caused.

The next major flood event to occur in the UK will see Flood Re-backed policies kick in for the first time, following the pool’s launch in April.


Source: Insurance Post (published 06 July)

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Wealth News

Reliant on otherstall-slim

LV’s latest ‘State of Retirement’ report found that around a million pensioners are financially reliant on friends and family to some degree.

Worryingly, those within 10 years of retirement are almost three times as likely to be in this situation (27%). This suggests that the next generation of pensioners will be even more vulnerable.

At the same time, there’s a general trend of people taking financial advice about retirement from their nearest and dearest rather than professionals. Six in 10 (58%) pensioners took financial advice from non-professional sources – such as friends and family – and three quarters (72%) of those approaching retirement plan to do the same.

The changes to the pension system in recent years have increased choice and made it even more important that people are able to access this support, with nearly half (45%) of people approaching retirement thinking the reforms are too difficult to understand without professional help. Cost is often the main barrier to advice but new, affordable solutions are now helping to make regulated advice accessible to the mass-market.

Those who do take regulated advice certainly see the value in it. Over the last two years the number of those approaching or at retirement who felt financial advice was ‘worth the money’ has nearly doubled.


Source: LV – State of Retirement Report 2016

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And finally…

Parents fined £5.6 million

Families hoping to save cash by going on holiday before the schools break up for summer could face millions of pounds worth of fines, according to new research from Santander UK. In the last full academic year (2014 / 15) parents were issued with an estimated £5.6 million worth of fines for unauthorised holiday absences.

Parents across England and Wales can face fines if they take their children out of school early without prior permission. The collective value of fines issued between 2012 / 13 and 2014 / 15 increased by an estimated £4 million, equivalent to 267 per cent. This suggests parents are becoming more willing to risk a fine and take their children out of school to avoid the school holiday price hikes. The case of Jon Platt who won a High Court ruling in his favour after refusing to pay a £120 fine for taking his daughter on an unauthorised term-time holiday sparked much public interest and debate.

The number of fines also increased over this time period by nearly 70,000, rising from 24,853 in 2012 / 13 to 92,784 in 2014 / 15 – an increase of 273%. Lancashire County Council issued the most fines in 2014 / 15 (4,279), followed by Doncaster Metropolitan Borough Council (3,559) and Bradford Metropolitan Council (3,445).

It’s perhaps unsurprising, as parents planning an overseas break during the school summer holidays face premiums of up to 68% in some instances, equivalent to an extra £1,771. On average, trips to some of the most popular overseas holiday destinations such as Spain, France and the USA are 21% more expensive for a family of four between 06 and 13 August, during the school holidays, than between 09 and 16 July, just before schools break up for the summer.


Source: Santander Press release (published July 2016)

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