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Dennis Hall: When a provider relationship turns sour

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I recently advised one of our clients to use the new pension freedoms to close her pension with AJ Bell and withdraw the entire sum as a lump sum. It formed part of a much larger portfolio of investments but the pension pot was relatively small.

For our involvement we agreed to charge the client about £500, paid from the pension fund before it was finally paid out. We submitted all the paperwork to AJ Bell making this very clear. You already know what’s coming.

At this point AJ Bell paid the client without deducting our fee. Several days later we received the paperwork and noticed the fee had not been deducted, so we asked AJ Bell what they would do about it.

After some to- and fro-ing they said they would write to the client asking for the money back and thanking us for highlighting a training issue. When will product providers stop spouting platitudes and instead pay for their mistakes (financial pain being the only pain they feel)?

I do not want AJ Bell to go back to my client asking them to return the money – it is not as though the sum was significant enough for them to notice. As far as they are concerned they received a net payment. Anything I have read about behavioural economics or the psychology of loss tells me the pain of losing money is twice as painful as gaining it.

My clients would feel a sense of loss far greater than the £500 they had agreed, which would impact on our relationship, and so for the sake of £500 I am left wondering whether I bear the loss or make the clients feel as though it cost them £1,000. AJ Bell on the other hand has not have suffered any loss, and although it has discovered a weakness in their processes it has suffered no pain.

By last week I believed we had reached an impasse. This is not the AJ Bell I started out dealing with more than 10 years ago – back then when something went wrong they held up their hands and fixed it. It was so refreshing, and it shaped my own attitude to handling clients complaints – we even have a ‘no quibble’ guarantee on our website.

So when I tweeted on Friday that my long running association with AJ Bell had sadly come to an end it triggered a response that I was not expecting.

One of the senior management team picked up the tweet whilst on holiday in Florida, and immediately called me. It is hard not to take anyone seriously when they interrupt their downtime to try and save a relationship. That is the AJ Bell I had experienced in the past.

With senior management involvement there was a thawing of the ice. We still did not reach the ideal solution from my perspective, but we got halfway there. And for that I am satisfied.

They still don’t quite ‘get’ where I am coming from – but then I am not a multi-million pound provider. I can care that little bit more, and I treat my clients in exactly the same way I would wish to be treated – and I live in a fantasy world where I believe providers should do the same.

Dennis Hall is managing director at Yellowtail Financial Planning

AJ Bell declined to comment

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Comments

There are 10 comments at the moment, we would love to hear your opinion too.

  1. Hope you will restore good terms with AJ Bell as sadly we are experiencing issues with all providers at the moment. If I hear ‘our process won’t allow it’ one more time I may scream but I am actually running out of providers I will do business with. One very significant provider in the pension market told my advisor that they could not respond to a pension freedom LOA request for 40 working days- seriously- how can this be TCF- they took the money quickly enough. Please SIPP Providers, anywhere, please put your hands up and say you have customer centric approach/values and will do anything you can to delight your customers- coz I really need one to restore my faith- and for those that cant you should probably send your senior team down to the MetroBank to see how these values could make such a difference.

    • Jane, it’s interesting that you mentioned MetroBank – who we moved to nearly 2 years ago because of poor service from one of the main clearing banks (high fees too). Metro aren’t free from errors, but as you indicate, their service levels and willingness to do the right thing are evident. I didn’t get what I wanted from AJ Bell, but they moved far enough to meet me half way, and that’s a lot further than most. Relations resumed, though not warm!

  2. Richard Anderson 5th August 2015 at 4:38 pm

    Hi Dennis, I don’t often ‘blog’, but will make an exception in this case as I think it is important.

    We have been using A J Bell for about 8 years or so now, and perhaps like most firms, we found them helpful and user-friendly. Sadly, over the last year or two, as they have grown into something much bigger, and perhaps co-incidentally have started to seek more D2C presence, they seem to be losing that all-important ‘helpfulness’, and are becoming more ‘prescriptive’. Whilst it must be more difficult to manage what is now a much larger organisation, it is a shame that in many ways the service experience is not quite as good as it once was.

    Sadly, it seems as if the future strategy will be for us ‘ride the service wave’, as it were, by using the smaller, up-and-coming firms until such time as they get too big and start turning into more of an empire (when service starts to suffer) and then move clients to the next ‘small, up-and-coming provider’, in order to regain a good level of service, which would be a sad state of affairs.

    I suppose the only way to get such firms to sit up and take notice is if we air our views publicly, like this, so I decided to share our experience. By all means ‘grow’, Mr Bell, but don’t get too ‘big’.

    (or perhaps they don’t really care, after all, which is an even more worrying state of affairs!)

    • Richard – thanks for making an exception. I agree with you AJ Bell were a decent provider to work with. Not always right, but always willing to put things right. I still think that attitude is in their DNA somewhere, but they’re suffering as a result of being so successful. The trouble is, who else would you use. I like your idea of ‘riding the service wave’ but that isn’t without its own problems.

  3. Know exactly where you are coming from. Pension Freedoms has been well documented and yet providers have simply not equipped themselves to cope with demand. I have a client who has been waiting for a TFC payment now since May. The Prudential has had their money for several weeks, but cannot make the payment as they have yet to create the policy document. Both my firm and the client have made a formal complaint.

    Another client could not access funds above the GAD without transferring to a suitable contract that caters for the new rules. AEGON allowed an in-house transfer to proceed, but then said after a month it could not proceed as the client lived in Spain. We had to inform them that the client of theirs had lived in Spain for over 10 years. Despite the now urgency for the client, AEGON took over 6 weeks to transfer funds over to AJ Bell, who to their credit paid out the cash immediately.

    Providers just do not seem to care anymore about service standards, apart from at the front end… get the business in and don’t worry about the rest!

    • Greg, thanks for the comment. I do sympathise with the providers over the pent up demand by consumers to unlock pensions – and the requirement thrust upon them to act as the second line of defence. They have been overwhelmed, but some providers are coping much better than others – and it’s not necessarily the size of the pension book either. I have no issues about the speed of AJ Bell’s service which was without delay as you experienced. We’ve also had great service and turnaround times from Scottish Life (Royal London). As for clients living in Spain, why this creates such a problem I don’t know – we’ve had similar issues in divorce cases where one party lives in Spain.

  4. I understand the point being made even if the client hadn’t actually lost out financially.

    If the shoe was on the other foot and the adviser did something (like an incorrect instruction, it happens) that cost the provider time and/or money would they be so willing to cough up? Probably not…

  5. One of the main reasons I decided to go restricted in selected areas is the dire standards of service of so many providers and, as with all the other intermediaries with whom I spoke before making my decision, it’s had no negative impact on my business at all. Now I simply don’t have to consider any provider with whom I don’t wish to do business, yet I can still do so if a client comes to me with an existing product on which they need advice and guidance. It’s made life so much less troublesome that I wish I’d done it sooner.

  6. @Dennis

    I will admit that I was less than impressed dealing with AJ Bell over a number of years. Indeed they even once poached a client. I found their admin, service and web site sadly lacking. Naturally in my new state I no longer have to deal with them.

    I too opened a Metro Bank account a few months back . The seem OK, but anything to give the big boys a jolt! In fairness I have several bank accounts. Nat West is fine too, but I find the nationwide rather a ‘clunky’ organisation. But then I have no DDMs with anyone, I never go overdrawn and I have never required a loan. I also will not pay any bank charges. So I guess I’m not a complicated customer.

    @Julian. For an astute adviser you are sometime somewhat off beam. You can still be independent and not deal with selected companies for good reason, provided always that you have considered them.

  7. For a lot of these types of issues I sometimes call this the “etch-a-sketch” phenomenon; like most things they start of very simple (and in this case its one of service) and like the etch-a-sketch, you start off with a line moving slowly into a house, widows, door, a tree and maybe a dog or cat by the side (the essential elements), now comes the tricky part, you continue to “tinker” to put on an extension, a sun in the sky, clouds (hopefully you see where this is going) now before long you end up with “tumbleweed” with no beginning or end, just mass confusion.

    This phenomenon reaches into so much of this industry now, and sometimes one needs to be brave enough to give it a bloody good shake and start all over again, resisting the very real temptation to “tinker” !

    Dennis, I think we all feel your pain !

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