The idea was that we should monitor the bond and offer the client useful commentary on its performance and outlook.
At first, Prudential said they would send us copies of future annual statements but this was subsequently contradicted by a letter from somebody else stating that the mighty Prudential has “no facility to provide duplicate statements due to a system change”.
I replied “Given that you have no facility to keep us informed of progress on any business we might have placed with Prudential, I would be interested to know on what basis you might have any expectation that we would ever consider doing so in the future.
This yielded a standard complaint acknowledgement response, followed by a statement that it is no longer our normal practice, etc, etc.
I wrote back and said what about my question as to Prudential’s expectation that we might be inclined to place any business with them in the light of such a change?
This prompted a letter which stated the decision had been made by the board of directors, based on many reasons, one of which was cost, namely the cost of dup-licating statements would ultimately have an impact on the returns that Prudential would be able to pay clients in the form of bonuses.
I replied as follows:
“Just so I am absolutely clear about your response, are you seriously trying to convince me that the cost of producing automatically and sending advisers a single copy of the statement you send our clients once a year is so colossal that to continue this practice would actually impact significantly on the performance of Prudential’s multi-billion-pound with-profits fund?
“And that this matter was deemed by the board of directors of a multi-national company to be of such monumental import that it was necessary to include it at one of their meetings and actually to cast a minuted vote on the issue?
“And did not your board of directors consider that to stop sending copy statements to IFAs might have a somewhat adverse effect on the inclinations of said IFAs to place further business with the Prudential?
“Or perhaps that generating these statements and mailing them electronically to the IFA might be a cost-effective and viable alternative to the cost of printing and mailing two or three sheets of paper once a year?
“I appreciate that this correspondence cannot continue indefinitely but I am almost amazed at the reason you have given for effectively unilaterally cutting out IFAs who have given you business or who have been appointed by the client to review and to monitor their investment on an ongoing, long-term basis.
“If this is the Prudential’s idea of helping IFA’s to treat their customers fairly, then I think it quite probable that the FSA would be interested in an opportunity to offer their views on the subject – do you not agree?”
It will be interesting to see what this produces.
Harvest IFM, Bristol