Pensions: Scottish Widows faces £1bn advice probe
Scottish Widows accused of £1bn advice mistakes
Tuesday, 27 May 2008 09:22
Scottish Widows could face a compensation claim of up to £1 billion over advice given to 100 company pension schemes.
Independent consultancy the Actuarial Review Company (Arc) has prepared a dossier it is to deliver to the Financial Services Authority (FSA) detailing claims that the schemes lost £300 million due to "negligent" advice.
The firm claims at the height of the stock market boom in 1999 and 2000 pension fund schemes were advised to switch from guaranteed annuity funds into a Scottish Widows managed fund with a high exposure to shares.
It is also claimed Scottish Widows offered incentives to those schemes that switched.
A high court action is also expected to be launched in the coming days.
Scottish Widows has confirmed it is aware of the Arc dossier but has not received it.
A spokesperson said: "As a result it is very difficult to make any substantive comment on its content.
"We are only aware of one complaint ever being lodged from a company pension scheme relating to a similar issue to the one described and we are not able to comment on specific cases."
She added Scottish Widows was not aware of any High Court action being taken against Scottish Widows by a company pension scheme on this issue of any company pension scheme managed by Scottish Widows having contact with Arc.
Scottish Widows said it would also investigate the claims, once it has received the dossier.
The FSA has refused to comment on the dossier and whether they have received it or not.
Daniel Barnes