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Aegon under fire for client contact letters

Aegon has come under fire for another client contact exercise which advisers claim is an “excuse” to turn off trail commission.

Aegon has written to a number of advised clients as part of an exercise to update customer contact details. As well as asking clients to confirm details such as their address and phone number, it also asks whether they still have an adviser.

The provider says where the customer says they no longer have an adviser, it will stop paying trail commission.

Aegon says this is separate to the exercise it carried out in June, where it wrote to 11,000 customers to ask if they were still receiving advice from their adviser.

Where clients did not respond within 28 days, Aegon said it would remove the adviser’s servicing rights.

But in July it changed its stance and said it would only remove servicing rights if it received confirmation from the client that the adviser was no longer servicing them.

One adviser, whose clients have been written to in the latest exercise and who does not want to be named, says: “This is just an excuse to turn off trail for more advisers. Aegon should have learned lessons from the episode last year rather than trying to get at this in different ways.”

Perceptive Planning chartered financial planner Phil Billingham says: “Aegon has written to our clients under the pretext of updating information.

“This continual activity is damaging to their relationship with advisers and is part of a deliberate strategy.”

GSL Financial managing director Gary Lewis says: “Aegon is just looking for reasons to write to clients, and I object to them turning off trail in this way.”

An Aegon spokesman says: “The letter is designed to ensure we hold the correct contact details for our customers. It’s also important that we establish that the adviser details we hold are correct so that the adviser can be kept informed about the customer’s policy.

“Last year customers and advisers voiced concerns about letters which used negative affirmation to update our records. These letters are distinct in that customer records will only be updated when the customer tells us there has been a change.”

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Comments

There are 13 comments at the moment, we would love to hear your opinion too.

  1. I think Aegon wouldn’t be abiding by the TCF principles if they didn’t let customers know that this was an option. Suggesting that this is some sort of deliberate strategy to steal trail commission is just paranoid nonsense.

  2. There should be no concern here if you are close to your clients and provide the ongoing service which justifies any trail remuneration, particularly if the right agreements are in place.

    When a client receives such a contact then they will quickly be able to confirm that they do indeed have an adviser.

  3. Anonymous adviser 5th March 2015 at 11:10 am

    You must work for AEGON Scott

  4. I could see AEGON thinking they’re between a rock and a hard place on this. I’m sure there are a couple of advisers out there using the ‘money for nothing and the chicks for free’ principle to collect trail, and don’t really mind them being pushed off the gravy train. That sounds like Client’s Best Interest to me (weell, it would if they got the trail back!)
    It’s just I have to admit to having a sneaking mistrust of anyone talking about ‘negative affirmation’ with a straight face…

  5. Phil Billingham 5th March 2015 at 11:54 am

    Couple of thoughts:

    It is a strategy. I have sat in strategy meetings with providers where the increased profit from doing just this has been discussed, and tactics agreed

    Whilst we ARE close to our clients, and have no clients on trail, I think the real question is what gives an increasingly irrelevant provider the right to even ask the question? Who died and made them god?

    In terms of TCF, if they returned the trail to clients, I may buy the point. They don’t. They simply grab it for themselves. So fair to who?

  6. One of my few remaining AEGON clients has just received one of these letters. It suggested that he could ‘log-on’ to their website in order to update his details, amongst other things. He had no intention of doing so and just gave the letter to me.

    Ironically, I go onto the AEGON website every month for valuation updates for this client, as he requests a monthly schedule for his fairly extensive portfolio. I seem to recall some months ago that AEGON said that if they detected on-line activity from an IFA, they would take this as a sign of a continuing relationship for servicing. So is that no longer the case, or was it just never the case anyway?

    As yet, I have not been copied on the correspondence by AEGON, so can only see it for what it is, as observed by others already!

    I am not in the business of transferring funds about, unless appropriate from an investment perspective, but I am certainly making an exception in AEGON’s case, albeit at no charge to the client (so unnecessary but what can you do when the trust has gone?).

  7. I think AEGON have lost the plot and they forget who the client views as their agent (US).
    Client writes to us and advises a change of address and with some AEGON systems, we can update the clients address, with other parts of AEGON they refuse to act on our forwarded instruction and insist on the client writing in seperartly (no consistency).
    In addition if a client dies, they want US to let them know, but when the reverse happens, we can sometimes hear nothing from AEGON for weeks or even months and they don’t see this as a problem! I had an ex GPP member die (no ongoing servicing or commission), but we had been helping with his waiver claim for the last 2 years. The first I knew of the GPP members death was 6 months later when the spouse was at the end of her tether with AEGON and just wanted to see someone face to face for help (she lives nowhere near Scotland). this was NOT an advice situation, she was not my client, but as the insurer has no client facing staff we could have helped (for no charge and did) explain the rubbish they were posting her!

  8. @Steve – They told me that too re online activity by us. We have also started moving stuff away from AEGON at no cost to the client as we simply don’t trust them anymore.

  9. “An Aegon spokesman says: “The letter is designed to ensure we hold the correct contact details for our customers. It’s also important that we establish that the adviser details we hold are correct so that the adviser can be kept informed about the customer’s policy.” Hello – you could do this by writing to the adviser. Remember trail commission is not for ongoing advice – it is a deferment of initial so they have no right to switch it off even if there is no service being provided. They will simply keep the switched off stream. Still I personally don’t care as I have moved all clients away from them a long time ago. They were horrendous to deal with then and don’t know what they are like now but this latest story gives me a good idea.

  10. Not that we rely on trail commisison (so no vested interest) but I wonder whether Aegon ask the client whether the trail was taken as ‘deferred initial’ commision or in order to provide servicing?

    I also wonder whether Aegon will reduce the cost of the contact if Trail is ‘turned off’ given that the cost of the Trail is typically paid for by the client through plan charges?

    I’ve this week had Pru stuble around trying to explain why they’ve not copied us in on client correspondance cocerning a WP pension due to mature – their response was full of assumptions and attempts to justify cutting us out of the loop.

    I had a client a number of years ago appoint us on a large investment portfolio – within a week we were removed and on speaking to the client the provider had asked questions and he had mistakenly overuled the initial appointment due to his confusion – we were reappointed but I was left wondering why Zurich would need to question a clients express instruction to appoint an IFA?

    We also have a case where we were appointed on a Brewin portfolio and Brewin subsequently called the client to try and talk the client out of it.

    I could go on but I’m left simply thinking why don’t providers focus on delivering quality investment solutions rather than trying to alienate their distribution channels and their clients?

  11. @Anonymous adviser – sorry, but you’re woofing in the wrong wood. Aviva have never been my employer(although I did work for a different provider in the past). I honestly believe that there is a paranoia in our profession with respect to clients and commission being ‘stolen’. Do a search on this very site and you’ll see no shortage of ‘Adviser blasts/slams/condemns (insert your favourite outrage descriptor here) Provider x’ stories on the subject.
    I guess it’s a mindset which will inevitably afflict some of us who don’t work for a set salary, but I view it as somewhat “they’re all out to get me”.

  12. What’s the issue? If you are regularly servicing your clients, you have earned your trail.
    If not, well…

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