Co-op financial arm cuts 670 jobs

15 July 2011 Last updated at 15:33 GMT The Co-op's insurance division has two million policyholders Co-operative Financial Services (CFS) is to cut 670 jobs with the closure of its door-to-door sales team.

Part of the Co-operative Group, CFS said the division faced rising regulatory costs with the introduction of new rules on financial advice.

CFS also said it was in talks with insurer Royal London to sell its life insurance division and ?20bn of assets.

CFS has 12,000 staff, more than 300 High Street branches, and 8 million customers.

Of the job cuts, 497 will be from sales staff, with the remainder in office-based managerial and support roles.

A further 82 existing Co-operative branch-based jobs will be transferred to the insurance firm AXA, with which it has a partnership.

In January 2013 new rules - the Retail Distributive Review (RDR) - will be introduced to toughen regulation of the sale of financial products to members of the public.

Neville Richardson, CFS chief executive, said the decision on job cuts was "not taken lightly".

However, he said: "We were faced with rising regulatory costs in a business which was increasingly becoming sub-scale.

"This move supports our strategy to focus our specific attention on our banking and general insurance areas, where we have a growing and strongly differentiated competitive position," he said.

Exclusive talks

Last month, HSBC bank cut 700 jobs across the UK as it prepares for a drop in demand for financial advice as a result of the changes in the RDR.

Meanwhile Royal London, the UK's largest mutual life and pensions company, said it was in exclusive talks to buy CFS's life assurance and asset management businesses, which has about two million policyholders.

Mike Yardley, Royal London's chief executive, said: "I believe the opportunity we are discussing with CFS has the potential to deliver another major step forward for Royal London, with real benefits for our members and other policyholders."

A takeover would need regulatory approval.

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Financial compensation on the up

1 July 2011 Last updated at 14:55 GMT There are various levels of compensation available through the FSCS scheme Claims for compensation from those who had savings or investments with collapsed financial businesses rose by 25% in 2010-11.

There were 39,500 new claims from consumers to the Financial Services Compensation Scheme (FSCS), its annual report showed.

It paid out ?535m, driven partly by the failure of Keydata and as a result of payment protection insurance claims.

Payments are made to cover savers' losses up to set limits.

Full compensation up to ?85,000 per saver, per authorised institution is paid to those who deposit money in an authorised bank or building society if it goes bust.

For investment products, the first ?50,000 is covered per person, per firm.

Workload

Some 27,000 of the claims made in 2010-11 were the result of the failure of Keydata. The investment firm was closed down by the City watchdog - the Financial Services Authority - in 2009.

The collapse has become the biggest problem yet for the FSCS which has paid out ?214m to Keydata investors in the last financial year.

The scheme is expecting a large volume of claims relating to payment protection insurance (PPI) in the coming year, after 20% of new claims in the last financial year were about PPI.

Some sellers of the loan insurance - which in many cases was mis-sold - subsequently went bust, leading to the claims.

The FSCS has a target of paying compensation to depositors when a bank, building society or credit union goes bust within seven days, although the legal requirement is within 20 working days.

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New financial ball game?

27 June 2011 Last updated at 23:07 GMT By Stephen Evans BBC News, Berlin Host-nation Germany is the team to beat at the Women's World Cup football The Women's World Cup has just kicked off in Germany and for many football fans around the globe it may be their first taste of the female game.

But, historically, women's football was doing very nicely indeed - in the UK at least - until the men got in the way.

During the First World War in Britain, female workers at the munitions factories formed teams known as "Munitionettes" which played against each other.

On Christmas Day in 1917, 10,000 spectators watched two women's teams playing at Preston in the North of England.

In 1920, 53,000 football fans turned up at Everton's Goodison Park stadium in Liverpool to watch St Helen's Ladies play Dick, Kerr and Co, a female team made up of employees from a Preston munitions factory.

But men were not impressed. There were mutterings that playing football might impair fertility - the women's not theirs.

And in 1921, the Football Association banned women's teams from grounds used by men.

As the motion put it: "The Council feel impelled to express their strong opinion that the game of football is quite unsuitable for females and ought not to be encouraged."

Continue reading the main story

Venue: Germany

Date: 26 June - 17 July

Watch: all England matches live on the Red Button and BBC Sport website (UK only); Highlights on BBC Two; Final live on BBC Three

Listen: on BBC Radio 5 live

Player numbers rising And that was pretty well it in Britain, the home of association football. The game for women declined, relegated to the edges of parks and played on the quiet by outsiders.

Well, not quite. Fast forward to today.

As the Women's World Cup is played in Berlin, there are 26 million women around the world registered as footballers by Fifa, the world governing body for the sport, six million in Europe and eight million in the US.

Rewards for women players are rising.

When Germany's women won their first big tournament in 1989, the bonus to the players was a coffee set, replete with a floral design in red and blue.

The officials of the Football Association did not encourage pioneers such as Preston Ladies FC

If they win this tournament, they will get 60,000 euros each.

Women's football is feted and watched in Germany (not least in Playboy magazine where some players posed in non-feminist and non-football attire).

Chancellor Merkel appears on German television to opine about tactics and the flow of the game.

Tight competition

So women's football in the host country has come a long way since it was banned between 1955 and 1970 because, as the authorities put it, it was a combative sport which was "alien to the female nature" and the "display of the female body violates etiquette and decency".

Post-modern irony? A special-edition Barbie table football game made for the Women's World Cup

Today, Germany is the team to beat. It has won the last two World Cups and beat Canada in the opening game of this one.

As a measure of the game's growth, this World Cup seems more open than previous ones. The competition will be tighter.

There are now leagues for women in the US, Sweden, Holland, Britain, Japan and Germany, often with some professional players, although they earn far less than their male counterparts - and with crowds far smaller than those drawn by men.

In the US, sponsors are keen to get involved.

Sponsor trailblazer

Dr Jean Williams of the International Centre for Sports History and Culture in Leicester, UK, points to US 1990s legend Mia Hamm, as having had "great cross-class, cross-gender appeal to all kinds of people".

"The second biggest building on the Nike campus is dedicated to ... Mia Hamm, because she was such a big pull for them in terms of their corporate sponsorship.

Mia Hamm was a great boost for Nike in terms of corporate sponsorship

"She was second only to Michael Jordan."

Dr Williams adds: "It was not uncommon to see a father with a Mia Hamm shirt walking into a restaurant with his daughter who was also wearing a Mia Hamm shirt."

She thinks the game needs to attract new, niche sponsors, the makers of "premium goods" like high-end watches or other luxury products.

"A lot of these women are terrifically good-looking, terrifically talented, great athletes - so they could earn more from endorsements from that kind of product than from the game itself," said Dr Williams, who has done a study of the state of the women's game for Uefa, European football's governing body.

Different appeal

But there will be the objection that women's football has to be second best because women are generally slower, smaller and not as strong. They can't compete.

To which the defenders retort that the same was said of women's tennis, which now attracts crowds - and money.

US ambassador to Germany, Philip Murphy

"If I were to be critical of the men's game, it's that the physicality has gone too far, particularly in the Premier League One", says Phil Murphy, who owns Sky Blue FC, a women's football franchise in New Jersey.

Mr Murphy, who is also the US ambassador to Germany, argues that women's football can have a different appeal.

"I think there's much more emphasis in the women's game on making the right pass, on the flow of the game," he says. "I like the flow better. I like that part of the game."

Mr Murphy thinks that, commercially, much will depend on the emergence of "heroes" in this World Cup.

If it produces a star, then the numbers of people bearing money to ticket booths and television channels will rise.

The organisers, too, think that this World Cup is very important in setting a tone, forming an image of the game.

The president of the organising committee, Steffi Jones, who played 111 times for Germany, told the BBC: "For the world, it's important to show that it can be sold out."

She hopes that good football played by women will draw in other women, particularly in countries where women have a tough time of life in general.

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Financial regulation to be bolder

27 June 2011 Last updated at 12:37 GMT The FCA's powers are aimed at preventing more mis-selling scandals by stepping in earlier The financial services industry faces "tougher and bolder" regulation, under plans for the forthcoming Financial Conduct Authority (FCA).

One of the successors to the Financial Services Authority (FSA), it will come into being by the end of 2012.

The FCA will oversee the way 27,000 firms, including banks, do business with customers and with each other.

It aims to prevent any more of the mis-selling that cost customers billions of pounds in the past two decades.

Margaret Cole of the FSA said the new body would be more proactive and interventionist than the FSA had been in the past.

"We will take action when a consumer detriment is building up, and not wait for it to crystallise first," she told the BBC.

New approach

In its 52-page consultation document on the powers of the new body, the FSA points out that past mis-selling scandals over private pensions, mortgage endowment polices, and split-capital investment trusts have cost customers about ?15bn.

Continue reading the main story

We will have new powers to make earlier interventions, including banning financial products and financial promotions”

End Quote Margaret Cole FSA It said billions of pounds more in compensation - likely to be well over ?5bn - will be paid when the current scandal over the mis-selling of payment protection insurance is finally resolved.

"The FSA recognises that, overall, its response to the mis-selling of PPI should have been stronger," the FSA said.

"Stronger action sooner could have limited the growth of the problem," it added.

A past criticism of the FSA has been that it watched problems building up, even when they were gaining widespread publicity in the media, and only acted once large numbers of people had been affected.

The FSA acknowledged it had been slow to react in the past.

"The response by society as a whole and, in particular, in Parliament and the media to the major mis-selling events since 1990, demonstrates that the FCA will need to have a lower risk tolerance than the FSA has had historically in this area," the FSA said.

Margaret Cole said its approach would change.

"We will be more engaged with consumer groups and will analyse what is going on, and look at consumer behaviour," she said.

"We will have new powers to make earlier interventions, including banning financial products and financial promotions."

'Restore confidence'

The FCA will be a standalone body and will oversee the conduct of all financial services firms.

It will also be responsible for the "prudential" regulation of the finances of 24,500 firms.

Among them will be personal investment companies, insurance and mortgage brokers, investment managers, corporate finance firms, financial exchanges and travel insurers.

The prudential regulation of the finances of banks, investment banks, building societies, credit unions and insurers will go to the other successor body to the FSA, the Prudential Regulation Authority (PRA).

This will be a direct subsidiary of the Bank of England.

Hector Sants, the FSA's chief executive, said: "Trust in the financial services sector is at an all time low and the new regulatory arrangements provide the opportunity to restore confidence."

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Financial climate 'aids rogues'

21 June 2011 Last updated at 12:08 GMT Many consumers are looking to make extra money or find a new job Rogue traders are taking advantage of the economic climate to exploit consumers' attempts to make money or find a job, a charity had said.

Citizens Advice has reported an "unprecedented boom" in scams that target people's wish for homes and jobs.

Tricks include charging upfront fees for employment that does not exist.

Meanwhile, the government has confirmed plans to change the landscape of consumer protection.

Prevention

Scams cost the UK billions of pounds, but a recent report suggested the system to tackle them was fragmented.

The National Audit Office (NAO) also said that trading standards departments, which are facing cuts in funding, were underequipped to tackle con-artists operating across the UK.

Gillian Guy, chief executive of Citizens Advice, said that the authorities were unable to keep pace with new scams and take action in every case.

She will tell the Trading Standards Institute conference in Bournemouth that prevention needs to play its part in stamping out scams.

"Con merchants have never had it so good. The recession has provided an opening for money-making scams and sharp practices disguised as sources of help," she said.

In one case, a man in the West Midlands replied to an advert on the Jobcentre Plus website for film extras. He was told to pay ?1,000 upfront and that he had to have blood tests, but no work was ever offered.

Other typical scams include:

Phantom flats are offered to would-be tenants who are then asked to prove they can pay the rent by transferring money that they never see againBogus merchants claiming they can help manage people's debtsMis-selling to those looking to cut their utility, phone, or travel bills

"Consumers need advice, enforcement, regulation and redress agencies to work even more closely to stamp out fraud and scams," Mrs Guy said.

However, the NAO report, published a week ago, revealed there was a lack of clarity over which enforcement agencies were taking on prioritised cases.

Two incompatible databases were also being used by trading standards departments to share intelligence, it found.

"Consumers in this country believe that they are well-protected, but the reality does not support this view," said Amyas Morse, head of the NAO.

Plans

The government is planning to place more of the burden of consumer protection on trading standards officers and Citizens Advice.

Watchdog Consumer Focus is set to be scrapped, with Citizens Advice set to take on its role in fighting for the rights of energy customers.

Plans would also see the Consumer Direct helpline switch to the control of Citizens Advice.

Consumer Minister Edward Davey said the plans, which are subject to 14 weeks of consultation, would end confusion over who was responsible for certain aspects of consumer protection.

But trading standards officers, who will oversee more national investigations, are facing budget cuts at local government level.

Mrs Guy, of Citizens Advice, said: "Subject to receiving sufficient resources, we would be delighted, and are ready and prepared to expand on [our] work."

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Shanghai 'to be financial centre'

17 June 2011 Last updated at 10:23 GMT Shanghai will be competing with London and New York Shanghai is on track to becoming the world's largest financial centre in a decade, according to a new report.

KPMG and index compiler FTSE say that Shanghai will become increasingly important as China develops its stock, currency, bond and derivative markets.

One key development will be launch of the Shanghai stock exchange's international board, which the report says should happen in the near future.

That will allow foreign companies to raise funds by listing shares in China.

"A debut could conceivably occur before the end of 2011," the report says.

China's stock market has grown from $400bn (?250bn) in 2005 to $4tn in 2010 as more than 500 companies have gone public.

The report said that there was now room for sustained growth in debt and derivative markets, which are still in their infancy in China.

Challenges

However, the report warned that there several challenges that needed to be overcome before Shanghai could compete with London and New York.

"Shanghai is still some way behind other financial centres in terms of market openness, size and variety, as well as sophistication of products," the report said.

The report said a key challenge would be liberalising China's currency, which is still tightly controlled.

Although China has taken steps to internationalise its currency, there are still limits on the flows of money in and out of the country.

China's relatively high tax rate for individuals could also make it difficult to attract talented professionals.

At up to 45%, it could put Shanghai at a disadvantage to regional rival Hong Kong, where taxes are up to 15% for individuals.

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