By Max Clarke
Barclays Bank, HSBC, Lloyds Banking Group and RBS Group have all voluntarily agreed to review and, where necessary, improve the way they sell will-writing and executor services following discussions with the Office for Fair Trading (OFT).
The OFT approached the four banks during 2010 as part of a wider effort to improve the will-writing market for customers and their beneficiaries, following concerns that some consumers were appointing professional executors without fully understanding the likely costs and the alternative options.
The four banks have agreed to meet three key principles, to ensure customers are able to make well-informed decisions:
* Consumers making a will should not be led to believe that appointing a professional executor is essential or the norm.
* Consumers should not be encouraged to appoint a professional executor unless it is clearly in their best interests.
* Providers should be satisfied, before the will is drafted, that the consumer has the information necessary to make an informed choice. The consumer should understand the options around executor appointments and be aware of the likely basis of charging for the professional executor service.
All 'big four' banks are currently reviewing their product literature and processes and any necessary changes should be in place within six months at the latest.
There is no requirement in law to appoint a professional executor, although, according to a survey published by the OFT last year, some 43 per cent chose to appoint the professional will-writer or solicitor who wrote their will. While the costs for preparing a will can be relatively modest, the costs for a professional executor to administer an estate can be high and vary considerably. For an average estate, consumers can pay between £3,000 and £9,000. Failing to shop around for executor services could be costing UK consumers around £40 million a year, according to OFT estimates.
David Stallibrass, Director in the OFT Services and Public Markets Group, said:
'The wrong decision when appointing executors could mean a potentially expensive professional service is chosen, when a family member or friend may be quite capable of handling the task either alone or with professional support. We are pleased that each of the banks has agreed to review its selling practices and marketing literature to ensure customers are getting the information they need to make informed choices.'