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A message for the Pru&#39 – IFAs have long memories

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&#39s 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&#39s behaviour and contrasted

it with the Prudential&#39s 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&#39 feet, our approach was to undertake an

intensive operation to handle our clients&#39 affairs to their best

advantage.

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

the reverberations.

It isn&#39t 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&#39

positions but the future loss of business from the IFA sector will be

massive.

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

be unrelated.

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&#39t trust the company any more.

Don Clark

Managing director,

Torquil Clark

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