Banks need to let customers know that appointing an executor is not necessary when writing a will.
Consumers are spending extra on executors and failing to shop around.
Four high street banks will review the way they sell will-writing and executor services following the Office of Fair Trading’s (OFT) concerns that consumers do not fully understand the process.
Royal Bank of Scotland, HSBC, Barclays Bank and Lloyds Banking Group will improve their practices after the OFT found that some customer were appointing professional executors without recognising the alternative options available and the expense that would be involved.
By law, consumers do not have to appoint a professional executor to handle their will. However, over a fifth of people opt to have the person who wrote their will, such as a solicitor of other professional specialist, act in this role.
The OFT is concerned that people are spending much more than they need to on their will by administering a professional executor – depending on the size of their estates it can cost between £3,000 and £9,000 for this inessential appointment. It also outlined that consumers could be spending an extra £40 million a year by failing to shop around for executor services.
David Stallibrass of the OFT 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”.
He continued: “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”.
The banks must make sure that their consumers do not feel that appointing an executor is a necessary cost and also inform them of the important information they need to make a sound judgement before parting with their cash.