United Friendly fined for charges

UNITED FRIENDLY Unit Trust Managers was yesterday fined pounds 80,000 and ordered to pay pounds 200,000 compensation for taking money from its unit trusts and paying it into the company, writes Andrew Verity.

Imro, the investment regulator, found that the company had taken charges totalling pounds 200,000 from three unit trusts under its management.

The charges, made between October 1994 and December 1996, broke a rule which insists that companies must only take charges if they have been explicitly set out in the scheme particulars of a unit trust. It is understood that 1000 policyholders were affected.

United Friendly was also in breach of rules setting out the kind of charges which a unit trust manager is allowed to take from a unit trust.

Imro has ordered the company to pay its costs of pounds 22,161 as well as paying the pounds 200,000 compensation to the unit trusts.

The company yesterday insisted it believed it had acted correctly in connection with the charges.

The fine represents another blow for United Assurance, the listed parent company, which owns 100 per cent of the unit trust company.

United has been without a permanent chief executive since January last year, as it struggles to integrate the businesses of United Friendly and Refuge, which originally merged in October 1996.

Dr George Mack was appointed in October 1996 to steer the merger through, but resigned in November. He will be replaced by Alan Frost, of Abbey Life, in July.