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Advisers set to deselect providers based on service

Nick Cann roundtable
Nick Cann: Ultimately firms will live and die by their service

Industry experts believe service standards will become a key differentiator among providers post-RDR, with advisers dismissing certain firms on the grounds of poor service.

At a recent Money Marketing roundtable on adviser compensation, Aviva RDR implementation manager Ross Anderson said getting service right becomes even more important with the loss of commission.

He said: “Providers are trying to get this right because if we do, we get costs down, which means better prices to the end customer. We also do not get the problem of advisers calling up to be compensated for provider mistakes. Getting the service right will be the hygiene factor across the board.”

Institute of Financial Planning chief executive Nick Cann said: “Ultimately, firms will live and die by their service. Companies need to start to evidence they are dealing with complaints head on.”

Syndaxi Chartered Financial Planners managing director Robert Reid said the focus on service may have implications for some of the distribution deals being agreed ahead of the RDR.

Reid said: “Inevitably, one or two of those companies on restricted panels will not receive what they consider to be their share of their business and one of the things that will be cited is service. And if advisers can evidence poor service, there will be some interesting commercial disputes at that point.”

IFA Centre managing director Gill Cardy said: “Back when I was advising, if I was deciding who to do business with based on service I would have ended looking like a tied adviser.”

She said providers would pay attention if enough advisers chose to deselect providers based on service.

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  1. Service standards have played a key part in my provider selection process for 20 years or more, so this is hardly anything new, quite the opposite in fact. On what basis could I justify to my clients recommending any provider that cannot process and service its own products competently and efficiently? And there are many.

    Trouble-shooting resources are also a highly important criterion, which most providers these days seem simply to have factored out of their processes in an attempt to cut costs. When will the powers that be realise that costs are NOT and should never be the be-all and end-all of the provider and product selection process? Heaven knows the FSA itself is hardly a paragon of cost-effectiveness ~ quite the opposite ~ so to preach to others about the uber-importance of costs in the provider and product provider selection process is just a bit rich.

    Several providers were added to my won’t use list as of 6.4.2001 in the wake of them unilaterally stakeholdering all the PP’s we’d placed with them throughout the 90’s. Trust is an important factor. You can’t, with any confidence, recommend a provider or its products if, a few years down the line, the goalposts are going to be moved and you have to go back to your client saying that from now on, if I’m to continue to provide you with ongoing service on this product, you’re going to have to pay me a fee, despite having elected not to do so at the time you first agreed to invest in it. You can’t do it, can you? It just damages your business and/or its relationship with your clients.

    The two companies whose products I’ve never recommended because, since time immemorial, their service standards have been so absolutely awful, are Prudential and Legal & General. Which is a shame, because both have some good products and ought to be eminently recommendable. But they simply aren’t. So to hell with them ~ I’ll continue to find solutions from alternative providers.

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