Newest Review: ... too good to be true it probably is. I prefer to do my banking online but the Alliance & Leicester website wasn't great for user fr... more
Alliance's were never meant to last
Alliance & Leicester
Member Name: cmh4135
Alliance & Leicester
Advantages: Good headline rates
Disadvantages: Poor administration
One of the financial institutions that comes up time and time again as one of the best "in credit" providers is Alliance & Leicester. Their headline grabbing rates coupled with some amazing cashback and "refer-a-friend" deals mean that few savvy cash investors have not considered them at one time or another.
So, do they offer money for nothing or are you really paying for the privilege?
It rather depends on your point of view, how much "mucking about" you can take and how well you read the small print!
*** Account Application ***
Clearly, the process of opening accounts will vary from account to account and person to person. A&L employ the standard verification procedures common to all UK banking institutions and so you can expect to have to prove your identity with a combination of official documents (and in some cases electronic searches). English money laundering regulations dictate what the banks must do (to a greater or lesser extent) and so any requests from the bank in this area will be driven by these regulations.
Some accounts can be opened online (with any necessary documents being sent by post or taken into branch for verification), other accounts can only be opened in branch, often necessitating an appointment.
Each of the accounts that I have opened with A&L have been opened in a timely fashion and without too much fuss.
*** Account Administration ***
Again, the terms of the account will dictate how it is administered. Some accounts will be branch based, some telephone or postal based. Some, and often the best accounts will only be capable of online operation. In the case of these accounts don't expect any help from branch - if you go in with a query you'll either be directed to the phone to speak to someone in a call centre or a "message will be passed to our staff" via the branch. Either way, you won't get an answer.
I've found the online administration to be fairly good. The security measures seem robust although, like most online banks, you'll have to recall a range of numbers, passwords and pins to get to your account. A&L operate on a user number rather than a name and this number is about the length of a credit card number. This does mean that if you want to access your account from anywhere other than where you keep your statements you'll have to carry this number around with you as there is no way you'll recall it! A&L also assign you an "image" which they will display together with a word or phrase of your choice to reassure you that you're at the legitimate banking site. If your image or phrase don't match that which you were expecting then there's a problem.
Telephone banking involves a similarly tortuous climb through security but is as efficient as any other bank's service.
Branch based accounts tend to be low payers and so you're unlikely to do much more than pay in or withdraw. There are fewer and fewer branch based accounts and A&: seem to be leading the trend towards low staffing levels in their branch with a reduced counter service. In its place you'll find telephones with direct connection to their call centres and an army of "investment advisors" who don't do anything other than try to sell you products.
*** Those Terms & Conditions ***
A&L do offer headline-grabbing rates but you've got to read the small print and comply with the precise requirements to benefit from the rates. If you don't, expect to receive a lot less return on your money.
Common terms that people seem to fall foul of include payment dates, how much you can pay in (and when) and how much (or how often) you can withdraw. The other thing that catches people out is the end date of the selected rate of interest. Many accounts, including the popular regular saver accounts, run for a set length of time and then your money is swept into a low rate paying account. Don't expect A&L to remind you of this in advance, you need to be organised and be ready to move your money when the rate ends to avoid losing out on potential interest returns.
Some accounts are "linked" in the sense that you can only open one account if you hold (or open at the same time) a different account. A good example of this was A&Ls ISA offer - 10% return but only if you opened a particular linked account. Do make sure that BOTH accounts are suitable and will not cause you to lose out overall (e.g. a high rate coupled with a low rate might net you less than a medium rate elsewhere). Bear in mind with regular saver accounts that the money you pay in should be earning interest elsewhere before it gets paid in - it makes for complicated sums but you can work it out. Also, if you see something suitable go for it - many accounts are limited in duration for opening the account.
Many accounts are only open to new investors. A&L's definition of what constitutes a new customer varies from account to account and so the best advice I can give here is that if you go for a fixed term headline-grabbing rate close the account as soon as the rate ends so that you maximise your chances of qualifying for a new offer as soon as possible.
*** Closing an Account ***
This is one of my biggest bugbears with A&L. Whilst you can open an account quickly A&L seem reluctant to let you go. I've had issues closing every one of my A&L accounts ranging from accounts not being closed in accordance with instructions to the wrong amount being paid out to close the account.
I've also not had "end of year" statements in respect of online accounts that were closed during the financial year. This is a problem as online access to the accounts ceased when they were closed so there is no way of getting the historical information. Again branch can't help because it was an internet based account.
When you want to close and account the staff will try to get you to do an investment review to see if they can tempt you to stay. Don't accept this offer straight away - I've been offered a financial incentive (usually £10-25) for doing it after initially refusing.
*** Investment Reviews ***
I've been thoroughly under-whelmed by the investment reviews that I've had with A&L. In each case I've felt as though I've known more about the financial markets than the person conducting the review. On each occasion there has been some pretty hard sell and this is something to bear in mind if your grasp of finances is not too good. Despite giving the rates that A&L would have to beat to get my business the advisors often only recommend tied products that would result in a smaller return. I appreciate that they can only offer their own (or linked companies') products but I'd rather they just said "we can't beat that rate" rather than trying to say that their inferior product is actually better. It's misleading and underhand.
At an investment review expect to get a hard sell on insurance too. I've no experience of A&L as an insurer and have had no need for their products but do check before signing up. Although you'll always have a cooling-off period I wouldn't like to have to put it to the test given the issues I've had with account closure.
*** Incentives ***
A&L always seem to have incentives for signing up which can be worth a lot and catapult some of their accounts into top earner status IF you qualify. A&L have always paid the incentives I've been entitled to although they have taken their time. If you are a couple and want to open 2 accounts it often pays to do it one at a time and then the first person to open the account can recommend the second so you both qualify for an incentive payment. Sites such as Quidco or Greasypalm often have cashback incentives for certain A&L accounts and, although these are not guaranteed (and do make sure you clear your cookies!), they can again, add to the return.
*** BOTTOM LINE ***
I would, in certain circumstances, recommend A&L based on the returns that you can make. I would say though, that the recommendation comes with a hint of caution. Do watch the terms and conditions of the accounts and make sure that you comply to the letter. Don't expect this to be an account that the bank will actively help you manage.
If you are good with your money then look here - if you're not so good then you might be better taking a slightly lower return elsewhere.
Summary: A good bank if you're on the ball and don't mind shouting