The Prudential has just made its most expensive mistake since it made
the ludicrous decision to buy up estate agency chains at the end of
the 80s – just after the property market peaked – and then to dump
them all again at huge losses a few years later.
If anybody from the Prudential's dislocated and out-of-touch board of
directors bothers to actually read this, let me assure you of one
thing: IFAs have very long memories and the repercussions of your
behaviour over the recent increase to life insurance and
critical-illness rates will be coming back to haunt you for many
years to come.
To allow your admin systems to get into such a mess in the first
place, so that we as IFAs were forced to do an inordinate amount of
chasing to try and get you to issue policies (was this just an early
and deliberate delaying tactic to try and ensure you issued as little
business as possible?) was one thing but to retrospectively change
rates on clients is appalling.
It was only after I examined my own firm's behaviour and contrasted
it with the Prudential's that I really saw the ethical differences
between our two companies.
Torquil Clark runs a life insurance dealing service and we recently
changed our own dealing terms. When the Prudential pulled the rug
from under our clients' feet, our approach was to undertake an
intensive operation to handle our clients' affairs to their best
We contacted each client by letter and telephone, we tried to
ascertain their position, provide them with alternative quotations
and help them through a fresh application process.
Not only this but we did so at our old commission rates, which
commercially disadvantaged Torquil Clark (quite apart from the cost
of the amount of extra work we undertook).
Effectively, we took a “hit” – we had to undertake an operation to
ensure our clients were sorted out and we gave them competitive terms
on a deal which finished some time ago.
Prudential, however, seems to have suddenly realised that it could
not afford to trade, offering the terms it was, so panicked and
withdrew them retrospectively.
The point is that this is all about morals. The Prudential had a
moral obligation. It decided that it was in its best interests to
fail to fulfil those obligations and it has clearly underestimated
It isn't too late, dear board, to take a fresh look at this. In fact,
it is still early because the reverberations will go on for years.
Not only will my own firm be presenting an invoice to the Prudential
for many thousands of pounds in time spent in recovering our clients'
positions but the future loss of business from the IFA sector will be
Maybe the Pru does not care about IFAs as individuals but you can
surely see the effects of an effective blacking of the company by a
huge number of IFAs?
I hear from one of your employees that you have just made half of
your broker consultant force redundant. I am sure that your action in
this and the carry-on over the life/critical-illness debacle cannot
Perhaps it has decided that it no longer wants business from the IFA
channel. We should be told.
William Blake wrote in his Proverbs of Hell: “Prudence is a rich,
ugly old maid courted by incapacity” (incapacity is defined in my
dictionary as “a lack of ability or power”.)
Torquil Clark will not be using Prudential unless we have no other
choice. We don't trust the company any more.