Speaking at the Winchester White RDR conference at the Institute of Directors in London last week, Aviva director of distribution development Stephen Gay said that the issue has largely been avoided so far.
In May last year, Aviva revealed plans to target an estimated 1.4 million clients who it believes have no adviser. In the same month it also changed a clause in its terms of business to allow it to market to customers that it deems to be “orphaned” by their adviser.
Since then, Aviva has been criticised by advisers in Money Marketing in several disputes where the company mistakenly classified clients as orphans when they still had an active adviser.
At the conference last week, Gay said: “We need to have a debate as an industry about the customers that we as providers have on our books who we know are not receiving advice.
“We have not dealt with this up to now because it is a political hot potato.
“We need to find a solution to service these clients, particularly if IFAs are going to be moving up market as a result of the retail distribution review.”
Aviva says it will only advise orphan clients where it has it on the client’s authority that they no longer have an adviser. He says: “What we want to do is be reactive when orphan cli-ents come to us who are not getting advice.
“It is the elephant in the room that we as an industry have ignored for a generation and now we have to come up with a solution for it.”
Syndaxi Chartered Financial Planners managing director Rob Reid says the process for handling orphan clients does need to be simplified.
He says: “IFAs have to fill out a mountain of paperwork to take on new clients. There should be a way that orphan clients can access their records with the providers and easily authorise a new adviser to take over their files.
“But before providers classify clients as orphans, they should write to them and ask if they have an adviser. They should not just assume they are not getting any advice. But I agree that an industry discussion needs to take place and I would happily take part.”