Former Edward Jones clients hit out at Towry transfer charges
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Source: Michael Walter/Troika
Former Edward Jones clients are complaining that Towry has started applying transfer charges for those leaving the firm, although Towry insists the charges were always written into EJ’s terms and conditions.
Money Marketing revealed last month that disgruntled former Edward Jones clients had launched a petition calling on the Government to force the FSA to take action after they faced delays of up to four months to transfer their funds away from the company.
Treating Customers Shabbily petition organiser John Simpson says Towry has now started to apply charges to transfer clients’ mutual funds to another provider when previously they have not. Towry charge £20 per fund or £57.50 for an Isa transfer.
He says: “Whilst Towry have, over the last few months, transferred millions of pounds of assets of other clients free of charge, we hear that during July Towry decided to introduce a charge to the remaining clients in the exit queue.
“This is despite previous public assurances by Towry staff that no fees, service charges or commissions would be taken from Towry clients while they were waiting to be transferred out.”
Towry head of marketing Peter Foster says the transfer charge was always written into the terms and conditions for Edward Jones clients, but the firm often did not implement the charge.
He says: “There was always a £20 charge per line of stock in Edward Jones’ terms and conditions. I do not know why Edward Jones didn’t charge it. We do not make any money from the transfer process, let’s make that very clear.”
Foster says Towry is waiving its transfer charges for clients that have experienced “extreme difficulties” re-registering their investments.
He says: “Where there are extreme difficulties with the transfer process we waive the transfer charges, but that is decided on a case by case basis.”
Today Towry announced it has cleared the backlog of account transfer requests from former Edward Jones clients.
Chief executive Andrew Fisher says: “We have now cleared our backlog and are dealing with ongoing tasks associated with re-registration, working closely with platforms. However, because of the nature of the re-registration process, some assets may still take a little while to register with the new custodian. We can do nothing about this.”
“With hindsight, we certainly could have communicated better and reacted more quickly to what was an unanticipated problem that we encountered. Lessons have been learned and processes improved.
“I must reiterate that as soon as the technicalities of the problem became apparent, we ensured that additional dedicated resource was made available to resolve it. We accept that this has not been satisfactory to those clients wanting to close and transfer their account but can only restate that it was done as quickly as possible.”
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Readers' comments (8)
Julian Stevens | 2 Aug 2010 2:13 pm
Let me get this straight.
TL buys the entire EJ policy bank for £1. Trail commission is £6m p.a. TL considers itself under no obligation to do anything in the way of servicing. Nor does the FSA (possibly because Hector's declared TCF to be the latest in a long lne of regulatory flops).
A segment of EJ clients decide they wish to transfer their affairs and monies away from TL. TL either cannot or isn't interested in coping with the volume of requests. Customers complain but their complaints are ignored. Customers phone in but can't get through. AF says they're working on it but still the complaints keep coming.
TL discover a bit of small print in the EJ client agreements that entitles them to charge for transfers of assets out. Though EJ never invoked its right to levy this charge, TL seizes on it and starts charging EJ clients the maximum for what it should have done months ago and for which EJ would almost certainly have charged nothing.
AF declares they've got the problem licked, but various posts suggest this to be anything but the real state of affairs.
Meanwhile, the FSA stands by and does.........SFA.
AF evidently has the right connections in the right places and doesn't give two hoots about TCF.
Is that about it or have I missed something?
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Tim Kelsey | 2 Aug 2010 2:39 pm
Lets be clear, the money they charge doesn't cover the cost of the transfers - that's covered in all the trail commission from delaying the transfers!
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Beowulf Agate | 2 Aug 2010 3:22 pm
Sounds about right Julian - at least, this is what can be roughly deciphered from the months of articles, reports, comments and the client protest / petition web site
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Alan Lakey | 2 Aug 2010 4:03 pm
I think you missed the bit about Towry Law being the model for future businesses.
I rather my parents go to the bank!
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Ethan Hunt | 2 Aug 2010 4:48 pm
Alan; that is definately saying something given the banks equally awful press lately!.
Enjoy your articles in the pinks by the way, very substantive and knowledgeable.
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Patrick Schan | 3 Aug 2010 9:03 am
Every time we read how such and such a company are criticising other IFA's, championing fees against commission etc etc. and claiming the moral high ground don't you just know what you are going to see around the next corner...their true colours.
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Jon Bradburn | 3 Aug 2010 11:58 am
Julian you seem to have summarised the last 9 months quite succinctly!
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Anonymous | 6 Aug 2010 9:18 pm
Julian,
Excellent summary.
It has also shown that the FSA and the FOS need a complete overhaul. Looking forward to their investigation and positive action - eg order the company to refund the trail back to the clients for the stress and anxiety. This was known back in February/March - nothing is that unanticpated when these individuals saw through the churn.
Commissions v fees - I am for fees but the important thing is to provide value and the client is absolutely clear what and how much they are paying - the total charges!
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