Royal London suspends sales force on FSA probe
Saturday 20 March 1999
The firm said it was stopping its 1,900 financial advisers and managers from selling its life insurance and pension products and has ordered them to undergo a retraining programme.
The move follows spot checks carried out during a routine visit of the firm by FSA inspectors in January.
Mike Yardley, the chief executive of Royal London, which has 1.2 million customers in the UK, said the company's staff would not return to selling for "a minimum of eight weeks, probably more".
The training will focus on improving the levels of compliance with the tougher standards being imposed on the industry in the wake of the pensions mis-selling scandal. Staff will also have to undergo rigorous accreditation procedures and resit exams before being allowed to resume selling.
"Our priority is to protect the interests of our customers. We have identified the need to raise the standards of our sales force and taken action to ensure this is done as swiftly and efficiently as possible," Mr Yardley said.
Royal London insisted last night that while it had not received the FSA report, as far as the firm was aware there were no suggestions of mis- selling. "As far as our customers are concerned they have got no worries. If they are concerned they should contact an area office but this is a training issue, not a mis-selling issue," Mr Yardley said.
The firm insisted that the suspension was not connected with the pensions mis-selling scandal, which has resulted in household names such as the Prudential being "named and shamed" for selling millions of people private pensions schemes when they may have been better off staying with their company pension scheme.
Royal London first identified problems with procedures last year and insists it was already planning to take action.
Mr Yardley said: "It is an unusual move for a company to make, but I decided it was right for us to do it."
The regulator had not insisted on the suspension, he said, adding that he had not yet received the full findings of its investigation.
The company, based in Colchester, Essex, has 62 offices in the UK and is one of the few firms that still sells insurance door-to-door. It will continue selling general insurance products and the suspended sales force will still be collecting premiums from customers. The move is likely to be costly for the company.
Its sales people, many of whom are likely to be off the road for more than the two-month minimum, last year brought in more than pounds 62m of new business - an increase of 7.3 per cent on the previous year.
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