View more on these topics

Aviva adds new orphan clause to IFA business terms

Aviva has added a clause to its terms of business document for IFAs, specifying that it can directly market to customers it deems to be orphaned by their adviser.

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.”


Age concern

As the Isa consultation period closed, providers and advisers anxiously await clarity on the temporary rise in allowance for those over the age of 50.

Mourning has broken

The period of mourning is beginning – if you believe economist Edwin Coppock who said that market downturns were like bereavements and take around a year to get over.


News and expert analysis straight to your inbox

Sign up


There are 7 comments at the moment, we would love to hear your opinion too.

  1. orphan clients
    I thought cold calling was not allowed by the FSA and what else could you call this

  2. Bill Redmayne (36 years an IFA) 22nd May 2009 at 12:56 pm

    Contacting IFA’s clients
    This is nothing new AXA have been doing it for years, and then apologising stating it was an error. All life offices are completely ruthless and do not appreciate the quality business we IFA’s produce for them. What is more important they will sell products without full reserach on the suitability for the client, and get away with it because they are not offering independent advice.

  3. Orphan Clause
    Who identifies an orphan client? Do Aviva initiate contact if “they feel” the client receives no advice? How do they reach this conclusion? What if the client has a contract in force that is suitable for thier long term needs and are still receiving on going advice from their adviser on other matters? Are Aviva going to provide advice to a client on all aspects of financial planning? Is this just another way of showing contempt topwards IFA’s?

  4. NU contacting IFAs clients
    I attended an NU RDR session last year and it was obvious at the session that NU’s whole driver behind their supprt of RDR was to marginilise IFAs and re-open the sector up for increased direct sales. The cloak is slowly coming off their plans and stop supprting the firms that are happily planning to knife us all in the backs.
    If RDR is all about improving the position for customers, why aren’t the charges on these new factory gate products going down in line with the commission costs that these companies are saving? All that seems to be happening is that we are getting marginalised and the companies are passing the costs for advice onto the clients and therefore making greater profits going forward.
    I agree with the principals of RDR but these big faceless Plc’s seem to have hijacked the whole process for their own gain. They seem to have a very clear game-plan and everythng is being altered to suit what they are looking for. Are NU going to writing to all my clients in a post RDR world to say “why pay your IFA a fee you can come to us for free?” or will they simply offer better products via their own direct sales advisers, like the banks and building societies have done over the last year, effectively putting the independent brokers into a position where they can’t compete?

  5. Aviva tactics
    The company’s attitude to IFAs has been preety appalling. It doesn’t surprise me that they are taking this stance. Look at the way the direct marketing of general insurance by the company works. The premiums quoted by the direct arm are subtantially less than the ones the broker arm is provided with.
    Vote with your feet, find a better provider and product. It’s not that difficult!

  6. Mentally take us out of the loop
    And then reapproach the issue. Client has a plan with NU/Aviva and clearly states they do not want to be marketed by NU?Aviva/Tescos. Argument over as NU cannot write to the client or market them. They cannot advise either, all they cdo is provide factual options/information on existing contracts. Then reinsert us as adviser using a general power of attorney (Abbey have unsigend ones in their mortgage terms and conditions). It does not legally matetr whetehr it is a direct deal only. Lastly get the FSA to actually support the rule of law (i.e. the law of agency) and the whole things is resolved.

  7. Richard Wilson 22nd May 2009 at 8:10 pm

    Contemptuous Behaviour
    Yet again a large insurer treats the IFA sector with complete and utter contempt. Having said that I am not surprised with Norwich Union, or whatever they call themselves these days. We feed them the clients and leads, they then take them over. I suppose they are no different to Mortgage lenders. However, if Aviva administration is as bad as Norwich Union they wil not have any clients to poach from me. I very rarely use them now and I will take as many away from them as I can, within of course the ‘Best Advice’ & ‘Treating Customers Fairly’ principles, which direct insurerers have never seemed to grasp. Are we as brokers not customers of Norwich Union. Bad news travels fast and there are other companies out there.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm