The document also allows the provider to conduct “generic marketing” to clients of IFAs.
The terms of business have been updated this week in preparation for the firm’s June rebrand, although the orphan customer clause was added last autumn.
The clause defines an orphan customer as a customer who at any time after being introduced by an adviser has requested Aviva to provide financial advice, indicated to the provider that he or she no longer receives financial advice from their adviser or can no longer receive advice from their adviser because their adviser is no longer authorised by the FSA.
The clause allows Aviva to initiate direct contact with customers in order to promote and sell business without advisers’ consent where it conducts “generic marketing”.
The document states: “We will endeavor not to initiate contact directly with customers in order to promote and sell business without your consent except in circumstances where in our reasonable view the customer is an orphan customer.”
In an analyst presentation earlier this month, the firm outlined plans to proactively target 1.4 million existing customers it believes have no active adviser.
Aviva distribution director Angela Seymour-Jackson insists the firm has no plans to use the generic marketing section of the clause to tout for direct business from IFAs’ clients.
She says: “Generic marketing means that if we want to let customers know about our name change and the range of products Aviva offers then the terms of business allow us to do that. We have never done it and have no plans to in terms of mailings because it is not particularly cost-effective. This does not refer to a mail-shot to customers saying ‘why not give us a ring?’
Seymour-Jackson adds the firm will not pursue these orphan customers unless they have confirmed they do not have an active adviser.
She says: “We will ask them if they have an IFA and if they do we will not engage with them unless they have not been in touch for the past five years. There will be no leading questions.
“The IFA channel is our biggest distribution channel and it will continue to be post-retail distribution review so it is not in our interest to upset IFAs. The approach we have taken is designed to reassure IFAs but I can see that it has caused some concerns. I am keen to get the message across that we are not going to do anything with IFA’s clients without telling them specifically that we have changed our policy and we have not.
“We are trying to balance commitment to our most important channel with doing a better job at looking after this relatively small group of existing customers without an adviser.”
Nucleus chief executive David Ferguson says: “Life companies have controlled the retail sector for the past 30-40 years but growing professionalism in the IFA community is increasingly marginalising their role and this is leading to defensive mechanisms such as this. If I were an IFA I would think twice about where I place my business.”
Helm Godfrey managing director Bruce Wilson says: “There are huge numbers of orphan clients and it is good if the life office takes responsibility for helping these people.
“The danger is that Aviva steps on the toes of an IFA who actually is looking after these clients. To keep its reputation intact with IFAs, Aviva should write and tell IFAs that they are proposing to contact these clients and then the adviser can come back and say well we are looking after these people.”