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Cofunds apologises for Park Row letter

Cofunds has apologised to former Park Row advisers after contacting their clients directly and encouraging them to nominate new advisers.

This week’s Money Marketing reveals the platform wrote to 991 accountholders who are clients of former Park Row advisers on March 5, referring them to the FSA’s notice on the firm’s censure. The letter says: “We do strongly urge you to nominate a new adviser as soon as possible.”

A Park Row adviser, who did not want to be named, says: “It is very underhand. They want us to place business with them and all of a sudden they are kicking us when we are down. They have not consulted us and the letter makes us feel we have committed a crime when all we are doing is waiting to be reauthorised.”

Cofunds says it has an obligation to write to clients explaining the situation regarding their policies on the platform but has apologised to Park Row advisers for failing to tell clients that a significant number of the advisers have already been reauthorised under new networks while others are still waiting reauthorisation from the FSA. Cofunds has sent a revised letter to clients this week clarifying the matter.

Cofunds head of marketing Stephen Wynne-Jones says: “The original letter was technically correct but we should not have issued it without any reference to the fact that some of the advisers have been reauthorised or are awaiting reauthorisation by the FSA – it was an omission that we regret and we have apologised to both Park Row and the advisers concerned.”

The FSA is expected to inform Park Row advisers within weeks whether they will be reauthorised, whether they will need to wait for a review of business or whether their applications will be rejected. Many of the 240 former Park Row advisers have not been able to do business since they were deauthorised on November 13.

The FSA recently censured the firm for failing to ensure that its sales were suitable and secured customer redress estimated at bet­ween £5m and £7.8m and fined the firm’s chief executive Peter Sprung £49,000.

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Comments

There are 16 comments at the moment, we would love to hear your opinion too.

  1. What a shocker. I am sure that they did not even think of picking up a phone and making a call to say that they were going to send out such a letter.

    Its the usual combination of incompetence and arrogance that exists in a company once they achieve critical mass and forget the support they received in the early days.

    Very very unimpressed

  2. Spots never change, Cofunds adopted a non help strategy when Network300 collapsed. As to be fair did other Insurance Companies.

    Individual Investment Houses were far more co-operative, as were Skandia.

    Many of these larger companies, lenders and it would appear platforms believe that they have some form of client ownership.

    They all appear to believe that IFA’s do not talk to their clients.

  3. So Stephen Wynne-Jones reckons ‘ the original letter was technically correct ‘, says who ? where does he think he gets the right to advise clients to find another adviser, did he make any bucks from recommendations ?
    Ex Park Row Adviser

  4. Robert Donaldson 17th March 2010 at 9:58 am

    I disagree with the above and agree that cofunds has done what it shoudl do.

    The company Park Row were censured and the advisors are all currently in limbo, i.e. they are not authorised. Who do they turn to for advice if their scenario has changed etc.

    It is unfortunate for Park Row Advisors, however this is one of the problems when you are a member of a company or network. One or two bad apples can take the whole company down including the good advisors.

    As regards contacting the advisors the clients are clients of the company and not the advisor.

    Having been here before, this is something all advisors should think through when they join a company or network.

    The unfortunate advisors at Park Row are left not authorised due to the problems with their company.

  5. The cOFUND letters may have been ‘technically correct’, but they misled clients – in effect, telling a half truth.

    TCF Consumer Outcome 3 and Principle 7 apply directly to this episode.

  6. I can’t see how the relationship between Park Row’s advisers and their clients is any business whatsoever of CoFunds. CoFunds should not have written to clients on the subject of Park Row’s difficulties or those of its advisers. To mailshot clients suggesting that they should seek a new adviser is utterly reprehensible.

    CoFunds’ response to any enquiries from clients should have been to state nothing more than that it is merely the provider and that the client should seek guidance from Park Row or from the FSA.

    I have never done business with CoFunds and never will.

  7. The speed of CoFunds retraction speaks volumes. I suspect that for many in networks & nationals it was a case of “there but by the grace of God go I…” But if CoFunds are prepared to shaft advisers in Park Row who will be next?

    As our firm, along with half the industry, is currently trying to decide which platform(s) to support in the future, CoFunds has just shot itself in the foot big time. If I were a Park Row (or indeed networked) adviser I would be looking to rereg to somewhere less inclined to bite the hand that feeds it….

  8. at least they’ve had the decency to apologise

  9. This isn’t the first time a platform provider has contacted IFA’s clients and it won’t be the last.

    There are no clear boundries, every member of the FSA has to be seen to be TCF or risk receiving a fine or worse. Co funds felt they were doing the right things by the client, Park Row advisers naturally feel angry.

    Whilst their is no clear boundry there will be no clear solution, (except perhaps don’t put your clients on a platform).

    Clients! whose clients?

  10. Ex Park Row Adviser 17th March 2010 at 12:12 pm

    One thing that appears to have escaped the Cofunds matter of fact handling of this appalling letter just reflects their commitment to the FSA community as a whole. If anyone reading these entries has a business head on they will avoid Cofunds in the future as very simply they cannot be trusted with anyone’s clients.
    For the future I will only be introducing my clients to companies I can trust.
    Farewell Cofunds …………………..

  11. Stephen Wynne-Jones 17th March 2010 at 12:58 pm

    First and foremost, I’d like to apologise unreservedly to any Park Row advisers.

    I would remind bloggers that we only deal with advisers and are focussed on supporting them and their businesses. We fundamentally believe that Cofunds will only thrive if advisers thrive, which is why as soon as we realised our error in the first letter, we immediately sent the second letter of clarification.

    So we are clear as to what happened here, the first letter stated that “If you would like to place any new investment business through Cofunds we require you to nominate an alternative adviser to act in respect of your account”. This is technically correct in that we cannot accept business from investors with advisers that are not authorised. Our mistake was to not acknowlede that some of the Park Row advisers may have been reauthorized under other firms, which is what prompted the clarification.

    We try to get things right first time, but unfortunately sometimes fall short of the high standards we have set ourselves. We sincerely regret that this happened and will do everything possible to ensure this type of error does not happen again.

  12. Graeme Ferguson 17th March 2010 at 1:10 pm

    Cofunds are independent and support the IFA market so they therefore have a duty of care to make sure the clients have another authorised adviser. Harse but true. Maybe they should have padded the letter a little but really all they were doing was trying to do the best for the clients.

  13. Robert Cunningham 17th March 2010 at 1:44 pm

    Oh dear, I wouldn’t be like to be in the Marketing department at Cofunds, what a huge blunder. Very messy indeed.

  14. Cofunds do not understand how this industry works and certainly do not understand TCF.. When will it be possible to transfer clients off this platform in specie? Answers on a postcard please to………

  15. I bet Cofunds won’t make good any of the losses the authorised ex Park Row advisors suffer!

    We were looking at taking on Cofunds. I’ve just told my staff to mark the file “not proceeding.”

  16. On balance, looks to me like Cofunds did the right thing in apologising for a clerical error. They can’t accept business when the ifa isn’t authorised so don’t see what the big problem is.

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