Historically, advisers have considered product providers to be their partners – the distribution engine of the product design process; the consensus being that advisers’ and providers’ goals were pretty much aligned and what hurt one would also hurt the other.
This view was tested during the five-year RDR gestation period when the Association of British Insurers came out in support of the RDR. Aifa later announced its support for the RDR so, on the surface, one could argue that unity of objectives was being continued.
It is now accepted that many providers want it all ways, with distribution from every source – whole-of–market advisers, tied agents, networks, consumer sites and their own direct sales forces.
Such behaviour is only to be expected in today’s dog-eat-dog world, where yesterday’s partners are today’s sworn enemies.
What is unacceptable is when, like ageing divas enchanted by their foppish new beaux, providers are lining up to discard former partners.
In recent months we have seen Foresters absorb Children’s Mutual, then with undue haste declare to advisers that in customers’ best interests renewal and trail commission payments would cease and, by way of compensation, a once-only lump sum would be paid.
These customers are the same clients introduced by advisers to Children’s Mutual or Tunbridge Wells Equitable Friendly Society. Subsequent enquiries have found the figure payable represents two years’ commission, as calculated by Foresters.
The most deplorable aspect is how Foresters seeks to dress up these antics as some kind of consumer-friendly action. In reality it is circumventing its obligations to advisers while continuing to profit from the fund management and administration of the existing plans.
Aegon, too, seems to be playing the role of financial buccaneer in trying to gain as many adviser-introduced clients as possible.
The firm’s protests that it is only reacting to policyholder enquiries hold less water than a sieve.
My own accountant has received separate letters regarding two pension term assurance policies asking if I continue to act as his adviser.
Aegon really needs to consider the impact of its actions. Why would I contact them about term plans that end within a few years? Unlike investment plans, no aspect of these plans can change and this is clearly a trawling exercise to gain direct customers while alienating advisers.
With friends like these it is easy to see why so many advisers are focusing on platforms or dealing direct.
Alan Lakey is partner at Highclere Financial Services