The review – which Professional Adviser can reveal is codenamed ‘Project Minerva’ – takes the form of what one former Sesame adviser called “a two pronged attack” that he believes affects hundreds of the network’s ARs and thousands of individual client files.
The first stage involves Sesame doing a review of past business from 5 July 2010 up to 21 September 2012 to check the suitability of advice given to a selection of clients.
Where it identifies suitability concerns, it will write to clients asking them if they want to opt-in to a full review of the advice given, which could lead to redress claims.
The second stage – which advisers have said they have only recently been informed of – is an investigation into whether clients who are paying their adviser a fee for ongoing service are actually receiving that service.
Advisers who have been caught by the first stage will not necessarily become part of the second stage, and vice versa. If they feature in either stage they have been told by Sesame not to contact affected clients.
Professional Adviser understands compliance specialists The Consulting Consortium (TCC) and accountancy firm Deloitte have been hired to help Sesame carry out the investigations, with correspondence to advisers and clients coming variously from each.
Sesame refused to comment on the specifics of Project Minerva.
It confirmed it has engaged “specialist independent third parties to conduct a past business review on some aspects of pensions transfers as part of a settlement agreement made with the Financial Conduct Authority in 2013”, the year it was fined £6m for failing to ensure advice given to customers was suitable and for poor systems and controls.
“My trust in Sesame is nil”
The network added it has “been keeping affected members updated on the process and are committed to working closely with them to address any concerns they may have”.
But testimony from three different former and current Sesame advisers reveals anger at a process they said has left them “pretty much in the dark” and put their “trust in Sesame at nil”.
One adviser, who had been with the Sesame for eight years before leaving last year, said 100 of his files had been checked – with the network finding 10% to be unsuitable.
All of his cases related to pension switching advice.
The adviser did not want to be named but said he is confident the advice he gave was suitable, adding he even had assurances from the regulator.
“I spoke to a pension switching trainer at the FCA about this and he said the reasons I put down were enough. But Sesame is saying they aren’t,” he said.
Another adviser who also only spoke to Professional Adviser on condition of anonymity said four or five of his client files were reviewed – again on advice to switch pensions – and that two had been flagged as unsuitable by Deloitte, which he challenged with the accountancy giant.
“We said Sesame had already looked at them and rated them either ‘green’, meaning it was fine, or ‘amber’ meaning additional information was required, which we provided.
“Deloitte [when looking at my files] said ‘I’m giving you an opinion on your advice’.
“I told him his opinion was not factually correct. It was like talking to a brick wall. Neither Sesame nor Deloitte would say what level of qualifications [their file checkers] have.”
A third adviser said five of his files had been called for suitability checking by Sesame in September 2013, and a further one checked for evidence of ongoing service. He said he has had “no communication from Sesame” since then.
“All of my cases had previously been checked by Sesame and rated green or amber, which converted to green once we had provided extra information.”
“We thought protection was in place”
Each of the advisers was critical of Sesame’s file checking processes, especially prior to 2012, the period covered by Project Minerva.
One, who resigned from Sesame last week to go directly authorised, said: “[Prior to the review] Sesame was only checking suitability letters. Now I think the FCA has said ‘that’s not acceptable, you should be checking the whole file’.
“But we pay Sesame to review our files. We thought protection was in place. There was no point us relying on Sesame for file checks.
“We heard the FCA was close to shutting Sesame down if it didn’t meet all of the FCA’s terms for this review. I think Sesame is trying to fulfil quotas of unsuitable advice to appease the FCA. My trust with them is nil.”
