Cofunds has refused to pay an adviser for time spent resolving a client complaint case, saying it is the platform’s policy not to pay adviser compensation.
Essential IFA managing director Peter Herd contacted Cofunds on March 9 to arrange a £30,000 lump-sum investment into a client’s Suffolk Life pension in time for the 2011/12 tax year. Cofunds’ adviser support team gave Herd incorrect information about the form that was required alongside the client’s £30,000 cheque, which it received on March 28.
Cofunds passed the application to Suffolk Life, which returned the money on March 30 because it was not accompanied by the correct paperwork.
Herd logged a complaint with Cofunds on April 17. On May 8, Cofunds admitted its error and returned the £30,000 investment to the client, plus £15,000 as compensation for lost tax relief.
Herd requested Cofunds compensate him £1,125 in relation to his client fee and a further £680 for additional time spent in resolving the case. Money Marketing has seen an email from the Cofunds complaints team, sent to Herd on May 14, which declines both requests.
The email says Cofunds believes it is “reasonable” for the client to pay the fee from the compensation he received. It also cites Cofunds’ adviser service level agreement which states: “Cofunds will not compensate the adviser for time spent.”
Herd says: “A provider should be held liable for mistakes that result in a commercial loss to another company.” He has filed a case with the small claims court.
A Cofunds spokeswoman says it took all necessary steps to correct the situation for the client.
She says: “We have received a claim from the IFA but it would not be appropriate to comment about it at the current time.”