PEPs and pensions slip through the checkout: Nick Fielding reports on financial services popping up in supermarkets

WHERE can a financial services company sell its products? Almost anywhere - including a supermarket - according to Lautro, the regulatory body for the financial industry. However, some supermarkets are beginning to take an interest in who sells what on their premises.

At the end of June last year Mrs B, from Kingston in south- west London, who is in her early sixties, was made redundant. She used most of her redundancy money to pay off her mortgage and decided to put the rest into a savings plan.

The next day, a Saturday, she went along to her local Gateway supermarket on London Road. As she was leaving, she noticed a stall between the checkout and the exit advertising financial services. 'There was a bottle of champagne draw, open to you if you put your name down,' she said.

The stall was being run by CCL Finance Group, then known as Credit and Commerce Life. As readers of the Independent on Sunday last week will know, CCL Finance is almost entirely owned by companies linked to the collapsed Bank of Credit and Commerce International. The company had paid Gateway a flat fee to set up its stall within the store. A Gateway spokesman said CCL had had stalls at its Kingston store in June and November last year but had not requested any since.

Mrs B says that shortly after her visit to Gateway, and after the collapse of BCCI on 5 July last year, a salesman visited her and her husband and they decided to invest the maximum pounds 3,000 each in a PEP. 'We were told that CCL's UK General Fund would grow at about 25 per cent a year.'

In fact, Mrs B's original pounds 3,000 was worth pounds 2,576 by 3 March this year. CCL's UK General Fund fell by 5 per cent over the year to 1 March, compared with a 1.7 per cent increase for the sector as a whole.

A spokeswoman for Lautro said there had been concern about how some products were promoted, but remarked of the supermarket promotion: 'I don't think we would say it was improper.'

Gateway has recently decided to change its attitude to concessions within its precincts.

'The procedure now is for references to be taken from relevant regulators, plus two trade references and a bank reference. Only if financial advisers pass all these hurdles can they set up,' a spokesman said.

While several supermarket chains allow concessions on their premises, the only one with its own in-house financial services operation is Marks & Spencer. About 50 of its larger stores have an office, usually on the second floor.

'Our financial service offices mostly deal with inquiries from our 2.8 million charge-card holders,' said a spokeswoman. She said they also gave details of personal loans, M & S's two unit trusts and its PEP. 'But we don't provide any financial advice. Our staff are not financial advisers, and they send all queries away to our financial services centre, where everything is dealt with by post.'

In setting up the offices in its stores, M & S did not have to satisfy any conditions set by Lautro, Imro or any other regulator, because the offices were effectively information bureaus.

At present there appear to be few limitations on where financial services can be promoted. While you cannot legally pay wages in a pub, for example, sellers of financial services seem to be free of such constraints.

(Photograph omitted)