UK’s largest advice company under cloud
British insurer Aviva may close the UK’s largest financial advice network, Sesame Bankhall, after it acquires parent company Friends Life, potentially leaving thousands jobless.
In documents to shareholders recommending they vote in favour of the proposed acquisition of Friends Life, a Guernsey-domiciled investment house, Aviva revealed doubts over the future of the financially troubled Sesame business, the Financial Times (FT) has reported.
“If Friends Life or, following completion of the proposed acquisition, the enlarged Aviva Group were to withdraw Friends Life’s financial support for Sesame . . . it is likely that the Sesame business will no longer be viable and will not be able to continue to trade,” the FT article reported the document from Aviva as saying.
The Sesame financial advice business made a £19 million loss in the year to 31 December 2013 and Aviva expects the lossmaking to continue as a number of significant claims and other “potential liabilities” are outstanding against the company.
The life company expects that 1,500 jobs will be cut following the acquisition, with Sesame’s 2,100 “restricted” financial advisers in the firing line.
Sesame has been fined four times by the Financial Conduct Authority since 2004, including a £1.6 million infringement for “soliciting payments from product providers in exchange for sales”.
Aviva is now undertaking a “strategic review” of the Sesame business and said it will continue to “trade normally with the support of Friends Life” in the meantime.
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