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Carl Lamb: The curse of inadequate provider systems


It is said that the ancient Chinese cursed their enemies by saying ‘may you live in interesting times’. Post-RDR, it would seem that advisers are on the receiving end of this curse, with providers failing to deliver on promises.

This is not the first time I have expressed my frustration over the inadequacy of provider systems and controls, but
I have been fighting a client’s corner with Aegon for some weeks now. I am more convinced than ever that closer control needs to be focused on the provider end to protect clients’ interests.

The saga began in April when Aegon invested some of our client’s money in the wrong fund. We had told the company not to do so and it had confirmed our instructions, but went ahead and invested there.

Subsequently we requested a monthly income from an investment and Aegon paid the full year’s income in one transaction. In both cases it took considerable time and much chasing to identify the problem and resolve it. In addition, it has been difficult to ascertain if these mistakes had disadvantaged the client – and if so, to what extent. These incidents were followed by more.

Soon afterwards an Aegon administrator instructed a trade on the client’s account in error and assets were sold. Aegon has admitted its mistake and retrieved the assets on behalf of the client. 

The client logged into his Aegon online account daily to ensure that his assets were reinstated and noticed yet another error – the account showed an adviser charge that was deducted twice.

However, getting to the root of the problem has been a nightmare. Aegon had assured us from the start that the systems and technology for its platform were top-notch and that it could handle all types of transactions. 

Despite the claim that the systems required little human intervention, multiple errors occurred for this one client in a few months.

Aegon claims high service levels but the reality seems to be a different picture. We have spent many hours exchanging emails and phone calls with Aegon’s team and our overall impression is of a team that is under-trained and unable to meet promised deadlines. 

The information provided to us contained errors or was in a format that was complex and misleading.

Aegon has offered our client compensation – a miserly £150 for the erroneous trade of his assets – but has offered him nothing in respect of the error made with the adviser charge. Of course, we should be charging our client for the hours we have spent unravelling the mess and we have calculated this at £10,000.

Aegon has acknowledged that work was necessary but has offered us just £2,500.

My feeling is that Aegon has failed on all counts: customer care, delivering on its promises, staff training, procedures and technology.

Carl Lamb is managing director of Almary Green 


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There are 14 comments at the moment, we would love to hear your opinion too.

  1. Carl I have experienced similar problems to this with Aegon. Even carrying out a simple fund switch now seems beyond them. They have sacked most of their experienced staff in favour of smaller number of mainly junior staff and it really shows in their service. Also it is interesting to note with many providers that they are totally unable to facilitate adviser charging on any of their existing pre- RDR products which should prove interesting if the FCA get their way and switch off everybody’s trail commission!!!

  2. I would be fully behind a campaign against insurers. I get fed up with annual provider awards and star ratings showered upon undeserving providers.

    We should have a seperate awards dinner for the worst providers, but the attendees would be small although the awards nemerous.

    What about a new website to rate experiences with providers just as we see on Amazon or Ebay.

  3. We don’t have a lot of business with Aegon but I could raise similar issues with many providers.

    One interesting issue I did have with Aegon was that we submitted a switch form whereby we instruction them to sell ‘All investments’ however they refused that and stated they needed the funds to be listed individually – this seemed a little over zealous.

    We’ve had serious issues over the last 2 or 3 years, many are often Trust related – so much so that on two occasions we’ve issued fees to meet the cost of our work resulting from their mistakes.

    The funniest(!) error I saw was when clerical medical issued two letters on one day – the first saying that they did not have any record of a trust applying to an investment and, even if it did, they wouldn’t have a copy and the second letter enclosing a copy of the trust…!

    I also had a case where an old pension provider confirmed, in writing, that no commission would be paid from their annuity…. we therefore agreed a fee with the client only subsequently to receive commission a few days after our client had settled our fee! Very frustrating and, again, time consuming……..

    I could go on….

    It appears that even when we foresee issues and try and head them off with providers, they still manage to drop some almighty clangers!

  4. So the columnist is also the adviser looking for compo of £10k mmmh. What do Aegon have to say?

  5. Having worked for several providers over 25 years, I can say that most in my experience over-promise and under-deliver, even to the extent that fundamental product features set out in the T&Cs are not incorporated in system functionality at product launch and system/manual workarounds are then needed until such time the provider decides the enormous workload justifies developing their systems. Very common, you’d be surprised.

  6. Slightly off topic, but I would like to flag up the most alarming development in the industry…

    …the way we all talk in this absurdly verbose FCA management speak. Sorry, Carl, but I’ve picked on you. Here’s a great example.

    “This is not the first time I have expressed my frustration over the inadequacy of provider ystems and controls, but I have been fighting a client’s corner with Aegon for some weeks now. I am more convinced than ever that closer control needs to be focused on the provider end to protect clients’ interests.”

    You mean the admin is lousy.

  7. @SteveO: I disagree, I think IFAs, journalists and the like would flock to the financial services equivalent of the Razzies. It might not be as well attended by the recipients – but if someone did turn up they would probably gain a lot of respect, as it would show that they are committed to improving matters.

  8. Lindsay Lockett 30th August 2013 at 1:33 pm

    I too have had similar problems with AEGON’s new wrap. Of the 2 clients I used it for so far, both have thrown up problems. One was not invested for weeks while the market increased a complaint had to be raised to get them to focus on the case. I would not use them again, other IFAs please beware !

  9. Of course as we all know IFAs never never ever make mistakes and always get everything right first time and out on time. Perfect beings everyone.

    By the by I do not work for Aegon I just don’t like slagging off moaning articles

  10. @SteveO…We could call the website Trip Adviser!..Pretty much does what it says on the can!!

  11. Don’t you just love it when you submit a mortgage Dip get the go ahead and continue to the full application. When you try to choose the product you want after just about spending an hour submitting the client details and it isn’t there. Phone call to provider and you then find out you shouldn’t have proceeded to full application after receiving the Dip even though the option to proceed/complete the full application is there, what you should have done is come out of their system back to the home screen and start the mortgage application again because the original application button no longer links to their full application system. Why they couldn’t just remove this option and add a note telling you this is beyond me and apparently beyond them? Halifax take a bow.

  12. The industry in general seems to be increasingly beset with technical and operational difficulaties, arising I suspect from the relentless increase in regulation, regulatory costs and scrutiny on price competitiveness.

    For example, to satisfy the FSA’s criteria for independence (so I’m told by our compliance people), a £2,000 top up to a £100,000 ISA portfolio with which the client has been entirely happy for the past 10 years requires a new FactFind, a complete reassessment of his ATR and an independent platform comparison to establish that Platform X remains the “most suitable to meet his needs and objectives”. That’s CRAZY, bureacracy and compliance gone utterly and madly OTT. The client doesn’t want it, he certainly doesn’t want to have to pay for it, whilst intermediaries consider it to be totally unnecessary and can’t afford the time and trouble to undertake it all. And what’s the conclusion? With this particular mix of funds, on this particular day, Platform Y will save 0.1% p.a. on charges. So bloody what?

    The FSA seems to be ruthlessly determined to force the rebuilding of Rome in a day, but it just can’t be done. Providers are struggling just as much as intermediaries and the latter are constantly wasting time and money trying to sort out glitches and cock-ups of one sort or another, in between tracking, categorising and collating every penny of their income for the FSA’s cursed half yearly GABRIEL submissions, the systems for which are themselves a badly designed, confusing and inpenetrable mess.

    But, says the FSA, it’s all about consumer protection and better consumer outcomes. Never mind the costs, never mind the impracticality of all these new impositions, never mind the collateral damage, never mind that the industry is suffering a death of 10,000 cuts. We’re the FSA and we can do whatever we want without having to account for any of it to anyone, so just get on with it or we’ll fine you and/or shut you down.

    P.S. Thankfully, I have virtually nothing to do with AEGON, but plenty of other providers are hardly any better.

  13. @ Julian – considering replacing an existing platform for a client when making a £2k top up is your Network going OTT, not the FCA. Any sensible adviser reviews wrap offerings periodically, not every time a too up is made. In between client reviews, too ups go to the same wrap, at reviews, change of wrap for the whole portfolio in specie preferably is considered, but rarely carried out as the ad jin cost to the client and extra advice costs would often exceed the value to the client or the simple hassle of moving wrap too get a 0.1% saving is simply a waste of time. Go DA and read what the FCA say rather than a network & you’ll soon realise it is all the chiefs in the chain which is often the problem. it’s bad enough with 3 masters, I.e the client, the FCA & PI, but having different ckmploence officers who change like the wkimd at a network is simply unworkable.

  14. Julian is spot on. The problem is that providers can no longer make any money at this and are considering whether this is a market they ought to be in.

    Until the regulators become more business like this simply will not improve.

    After all, if you were a provider, would you commit several £m to new systems when you suspect that the FCA will change their requirements in a few weeks and put more pressure on the price you can charge.

    Of course you won’t.

    What we are seeing now is the epitome of ‘you get what you pay for’. The FCA is going ‘price, price price’ and the insurers are serving up the quality that they are able to provide at that price.

    The FCA will fail again.

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