- Estate planning scandal: customers abandoned, heavy losses, FCA’s inaction
- Building societies distanced from Philips Trust, face consumer backlash
- HSBC discontinues Gold Mastercard, cites evolving payment preferences
In recent days, I have received a deluge of correspondence from individuals who, with good reason, believe they have been abandoned concerning their estate planning and wills.
Certain correspondences and electronic messages are so distressing to read that they provoke tears of anger or fury. They express apprehensions regarding the level of attention provided to loyal clientele of specific building societies and the City regulator’s apparent need for more determination to safeguard consumers against financial misconduct.
The correspondence pertains to estate planning and writing services clients purchased from their neighbourhood building society during the 2010s. The Will Writing Company and the Family Trust Corporation, affiliated with Estate Planning Group, initially supplied these. Subsequently, Philips Trust Corporation, which entered into administration, was obligated to provide them. The building societies had no dealings with the true antagonist of this tale, Philips Trust.
It was promised to clients, the majority of whom were senior, that by drafting new wills and placing their assets (including their home) in trust, their funds would be safeguarded in the afterlife – and upon their demise. On paper, indeed. Practically, not. They acquired these financial instruments under the belief that they were acting ethically. Additionally, they purchased them due to their confidence that their amicable building society would safeguard their economic well-being.
It was uncomplicated. Should their local branch advise them otherwise, they should meet for coffee and deliberate on significant financial issues, including estate planning. They consistently yielded. It was prudent financially.
They were regrettably let down. Many individuals were duped into investing in financial puppies and have since incurred exorbitant expenses to rectify the situation. Furthermore, some still await the return of the assets they entrusted for tax-efficient management. It seems like a precious little thing.
Sadly, many have perished while awaiting the return of their remaining funds, leaving children (who are now adults) to gather up the wreckage.
A few days ago, the Financial Conduct Authority (FCA) announced that it would not be pursuing enforcement actions against building societies implicated in this lamentable saga, dealing with these individuals an additional setback. The primary contention of the paper is that the services above, in exchange for which the building societies were paid a commission as introducers, did not qualify as regulated activities.
Therefore, it cannot take action. In addition, the societies’ recommended services were affiliated with Estate Planning Group rather than Philips Trust, which was the source of all customer losses (and administrative chaos) due to egregious administration.
A little over 2,300 individuals had their assets “cared for” by Philips Trust.
The regulator asserts that societies cannot be held liable for the negligence of Philips Trust because the organisation did not yet exist when they introduced clients to the services of Estate Planning Group.
The FCA acknowledged in its decision announcement that it would “deeply” disappoint consumers who have incurred losses due to the scandal. They are correct.
Individuals involved in the scandal, whether customers or children left to gather up the shatters, are profoundly disheartened.
“Dereliction of duty” is how Andrea Hindley of the Philips Trust Action Group, representing the interests of over 200 affected families, characterises the FCA’s decision.
Nottingham Building Society introduced the Will Writing Company and Family Trust Corporation to Maureen and Jim, Andrea’s parents. Philips Trust ultimately acquired their Lincoln residence and investments totalling £120,000.
Despite the family’s current success in reclaiming ownership of the property, it is doubtful that they will be able to recover the funds that their parents initially invested. Any remaining value is likely to be consumed by administrative expenses.
Following Maureen’s death in April 2022, the Philips Trust failed at the same time that her funeral was held later that same month. Andrea realised her parents’ actions regarding their property and investments. Subsequently, she and fellow activists within the organisation have made ceaseless efforts to persuade the FCA to engage in dialogue with them and consider their perspectives. However, their efforts have been foiled (the FCA defends itself by claiming to have reviewed mountains of written consumer evidence).
Andrea, a retired publican, has concealed the FCA announcement from her father, who is presently undergoing terminal medical treatment. “Who can we trust if we cannot rely on the regulators to regulate?” she inquires.
She hopes that the FCA’s decision can be challenged with the support of the all-party parliamentary group on personal banking and equitable finance.
She states, “This is not the Philips Trust scandal.” “This is the scandal at the building society.”
Nottingham Building Society was not the only organisation that endorsed Estate Planning Group’s products. Additionally, fewer societies, including Leeds and Newcastle, did so (to reiterate, these mutuals did not conduct business with Philips Trust).
I requested information from all three societies regarding their readiness to assist clients impacted by this catastrophic crisis. Additionally, I asked for a quantification of the commission they had obtained by facilitating customer consultations with Estate Planning Group sales representatives.
Nottingham stated that it is collaborating with Philips Trust (Kroll) administrators to determine “how [it] might be able to assist [customers] voluntarily.”
Newcastle issued a similar statement, stating that it is in discussion with Kroll “to better comprehend the impact on those affected” and to determine whether assistance can be extended. It further noted that it provided clients with a “discounted trustee reassignment service” before Philips Trust’s establishment as an alternative to agreeing with Philips Trust.
Furthermore, Leeds confirmed discussions with Kroll, adding, “Greater Manchester Police have been notified regarding possible criminal activity by Philips Trust, and we continue to urge them to conduct an investigation.”
Regarding the commissions they received for referring clients to the Will Writing Company, none of them disclosed specifics. Do with that as you see fit.
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Concerning the regulator, it stated to me, “Although we do regulate building societies, these introductions did not pertain to activities that fall under our purview.” Several involved building societies have informed us that they are discussing the possibility of providing affected customers with voluntary assistance from the administrators.
It is the bare minimum that these societies ought to perform.
Card consigned to history by HSBC
Not only is the currency being surpassed by alternative payment methods, but An ageing plastic card that enables consumers to make interest-free purchases on credit while maintaining a monthly balance payment requirement is progressively disappearing from circulation.
A limited number of Gold Mastercard charge card customers have been notified in writing by HSBC that the cards will be discontinued at the end of September of this year. As a concession, the complimentary annual travel insurance included with the card will be extended for an additional year.
The bank asserts that holders of its other credit card products will “enjoy an even more exceptional customer experience” due to this decision.
Additionally, it is stated that the annual fee-charging card has been inaccessible to new consumers for twenty-five years.
It cedes control of the charge card market, especially favoured by affluent individuals, to American Express.
