Aviva has set aside an additional £90m for a historic problem relating to defined benefit pension transfer advice given by tied Friends Provident advisers.
Aviva says 90 per cent of the advice was given before 2002 and relates to the transfer of DB pensions into Friends Provident pensions.
Aviva savings and retirement managing director Lindsey Rix says the provider is carrying out a review on whether the advice given to around 4,000 customers was suitable.
Rix says: “We have notified the regulator and are having conversations with them. It is a historic issue we have discovered and we are dealing with as promptly as we possibly can.”
The £90m provision is additional to the £75m set aside at the end of last year.
Aviva’s half-year results statement says: “The issue does not affect any other part of our business. Affected customers will not be financially disadvantaged. The group has notified its professional indemnity insurers and intends to make a claim on its insurance to mitigate the financial impact.”
Speaking to Money Marketing after the results announcement today, Rix says Aviva is “out of the worst” of the issues relating to its replatforming project.
Aviva shifted assets from Bravura technology to FNZ in January but that process has been riddled with glitches with advisers and clients suffering issues with payments and trades.
Total assets on the platform grew by 12 per cent over the year to reach £22.7bn.
Rix says: “We have seen less inflows than we saw in the first half of last year as we have been working through the challenges we have had with the migration. We think we are out of the worst of that now and we are looking forward to maximising on the better functionality we have on the platform.”
Rix would not comment on the number of complaints Aviva has received over the replatforming problems, how much compensation has been paid out so far or how much provision has been set aside for compensation.
She also would not confirm the cost of the replatforming project to date and whether any fee payable to technology provider FNZ had been reduced because of the issues.
However, Rix says: “We have got a strong working relationship with FNZ and we are working together to fix the issues we have had over the first half of the year and our teams are working collaboratively to put our customers and advisers first and making sure we rectify the issues we have seen.”
She says there has been a “small number” of complaints to the Financial Ombudsman Service about the replatforming.