Protection providers are split on how to deal with Honister Capital pipeline cases, with Ageas Protect and PruProtect contacting clients directly to continue the application while most others are waiting for news on adviser reauthorisations.
Honister Capital, which includes advisory firms Burns Anderson, Sage Financial Services and Honister Partners, entered administration last week after failing to secure professional indemnity insurance.
The group’s 900 advisers cannot service clients until they are reauthorised.
Ageas Protect head of marketing Andy Milburn says: “None of us want the customer to delay placing their cover on risk and then finding themselves in a situation where they would have claimed if their cover was live.”
PruProtect head of account development Phil Jeynes says: “The customers’ need for the policies has not gone away so it would be incredibly remiss of us to say we will just wait for that adviser to come back.”
Both firms will allow advisers to rewrite the case, with the customer’s permission, if they regain authorisation quickly.
Friends Life, Zurich, Aviva, Aegon, Bright Grey/Scottish Provident and LV= say they are not contacting former Honister clients and would only take the decision to proceed with the application if the customer approaches them or there are extended delays to the advisers’ reauthorisation process.
Friends Life head of marketing and intermediary proposition development Steve Casey says: “We want to engage with intermediaries first as we want to ensure we can proceed with them before any other avenue is looked at.”
Insurers have frozen commission owed to Honister advisers on the advice of administrator Grant Thornton until it is decided what to do with these payments. However, if a former Honister adviser gains reauthorisation with another network and the case is rewritten, the commission will be paid to the new firm.
Axxis Financial Planning director Owen Wintersgill says: “For some advisers, the reauthorisation process is unlikely to go smoothly, so they could lose out on the commission that they would have normally received.”
In an interview with Money Marketing yesterday, the FSA said it is aiming to achieve its voluntary standard of ensuring 85 per cent of advisers are authorised within five days of receiving applications, despite the expected large influx of Honister reauthorisations.