Cofunds apologises for Park Row letter
Share
Cofunds has apologised to former Park Row advisers after contacting their clients directly and encouraging them to nominate new advisers.
This week’s Money Marketing reveals the platform wrote to 991 accountholders who are clients of former Park Row advisers on March 5, referring them to the FSA’s notice on the firm’s censure. The letter says: “We do strongly urge you to nominate a new adviser as soon as possible.”
A Park Row adviser, who did not want to be named, says: “It is very underhand. They want us to place business with them and all of a sudden they are kicking us when we are down. They have not consulted us and the letter makes us feel we have committed a crime when all we are doing is waiting to be reauthorised.”
Cofunds says it has an obligation to write to clients explaining the situation regarding their policies on the platform but has apologised to Park Row advisers for failing to tell clients that a significant number of the advisers have already been reauthorised under new networks while others are still waiting reauthorisation from the FSA. Cofunds has sent a revised letter to clients this week clarifying the matter.
Cofunds head of marketing Stephen Wynne-Jones says: “The original letter was technically correct but we should not have issued it without any reference to the fact that some of the advisers have been reauthorised or are awaiting reauthorisation by the FSA - it was an omission that we regret and we have apologised to both Park Row and the advisers concerned.”
The FSA is expected to inform Park Row advisers within weeks whether they will be reauthorised, whether they will need to wait for a review of business or whether their applications will be rejected. Many of the 240 former Park Row advisers have not been able to do business since they were deauthorised on November 13.
The FSA recently censured the firm for failing to ensure that its sales were suitable and secured customer redress estimated at between £5m and £7.8m and fined the firm’s chief executive Peter Sprung £49,000.
If you enjoyed this article, sign up here to receive daily email updates from Money Marketing and Follow @_moneymarketing
View results 10 per page | 20 per page
Readers' comments (16)
Mr City | 17 Mar 2010 9:27 am
What a shocker. I am sure that they did not even think of picking up a phone and making a call to say that they were going to send out such a letter.
Its the usual combination of incompetence and arrogance that exists in a company once they achieve critical mass and forget the support they received in the early days.
Very very unimpressed
Unsuitable or offensive? Report this comment
Anonymous | 17 Mar 2010 9:45 am
Spots never change, Cofunds adopted a non help strategy when Network300 collapsed. As to be fair did other Insurance Companies.
Individual Investment Houses were far more co-operative, as were Skandia.
Many of these larger companies, lenders and it would appear platforms believe that they have some form of client ownership.
They all appear to believe that IFA's do not talk to their clients.
Unsuitable or offensive? Report this comment
Anonymous | 17 Mar 2010 9:46 am
So Stephen Wynne-Jones reckons ' the original letter was technically correct ', says who ? where does he think he gets the right to advise clients to find another adviser, did he make any bucks from recommendations ?
Ex Park Row Adviser
Unsuitable or offensive? Report this comment
Robert Donaldson | 17 Mar 2010 9:58 am
I disagree with the above and agree that cofunds has done what it shoudl do.
The company Park Row were censured and the advisors are all currently in limbo, i.e. they are not authorised. Who do they turn to for advice if their scenario has changed etc.
It is unfortunate for Park Row Advisors, however this is one of the problems when you are a member of a company or network. One or two bad apples can take the whole company down including the good advisors.
As regards contacting the advisors the clients are clients of the company and not the advisor.
Having been here before, this is something all advisors should think through when they join a company or network.
The unfortunate advisors at Park Row are left not authorised due to the problems with their company.
Unsuitable or offensive? Report this comment
Anonymous | 17 Mar 2010 10:31 am
The cOFUND letters may have been 'technically correct', but they misled clients - in effect, telling a half truth.
TCF Consumer Outcome 3 and Principle 7 apply directly to this episode.
Unsuitable or offensive? Report this comment
Julian Stevens | 17 Mar 2010 11:03 am
I can't see how the relationship between Park Row's advisers and their clients is any business whatsoever of CoFunds. CoFunds should not have written to clients on the subject of Park Row's difficulties or those of its advisers. To mailshot clients suggesting that they should seek a new adviser is utterly reprehensible.
CoFunds' response to any enquiries from clients should have been to state nothing more than that it is merely the provider and that the client should seek guidance from Park Row or from the FSA.
I have never done business with CoFunds and never will.
Unsuitable or offensive? Report this comment
Simon Webster | 17 Mar 2010 11:19 am
The speed of CoFunds retraction speaks volumes. I suspect that for many in networks & nationals it was a case of "there but by the grace of God go I..." But if CoFunds are prepared to shaft advisers in Park Row who will be next?
As our firm, along with half the industry, is currently trying to decide which platform(s) to support in the future, CoFunds has just shot itself in the foot big time. If I were a Park Row (or indeed networked) adviser I would be looking to rereg to somewhere less inclined to bite the hand that feeds it....
Unsuitable or offensive? Report this comment
Anonymous | 17 Mar 2010 11:32 am
at least they've had the decency to apologise
Unsuitable or offensive? Report this comment
Anonymous | 17 Mar 2010 11:50 am
This isn't the first time a platform provider has contacted IFA's clients and it won't be the last.
There are no clear boundries, every member of the FSA has to be seen to be TCF or risk receiving a fine or worse. Co funds felt they were doing the right things by the client, Park Row advisers naturally feel angry.
Whilst their is no clear boundry there will be no clear solution, (except perhaps don't put your clients on a platform).
Clients! whose clients?
Unsuitable or offensive? Report this comment
Anonymous | 17 Mar 2010 12:12 pm
One thing that appears to have escaped the Cofunds matter of fact handling of this appalling letter just reflects their commitment to the FSA community as a whole. If anyone reading these entries has a business head on they will avoid Cofunds in the future as very simply they cannot be trusted with anyone’s clients.
For the future I will only be introducing my clients to companies I can trust.
Farewell Cofunds .......................
Unsuitable or offensive? Report this comment