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Praise for Prudential stance

I want to congratulate the Prudential for publicly declaring that it will take steps to deal with churning.

Last year, I was invited to a discussion hosted by Prudential distribution director Andy Briggs and, interestingly, the IFAs around the table debated this question quite fiercely.

I recall being quite aggressive in my assertion to Andy that as a provider the Prudential had a moral responsibility to tackle churning where they could prove it existed.

I also suggested, with some agreement from others, that it would be commercial suicide if, having identified persistent offenders, they did not deal with the problem, to the point of ceasing to do business with serial churners and even reporting them to the FSA. By doing nothing, they merely give their tacit approval to continued ripping-off of clients.

Like the current 81 per cent of readers who voted in your poll, I support the Prudential’s stance and view this as a positive reason for using the Prudential. Of the other 19 per cent who voted, I can only assume that this is an indication of the scale of the problem or why else would you vote against it?

Advisers who resort to churning should be chased out of financial services and not just from the advice-facing end. If any individual believes that it is OK to treat clients this way or that it is a justifiable way to run a business, they should not be let within a mile of a financial services company.

Prudential’s brave move needs to be endorsed by all product providers and I would like to see this given much greater prominence. Providers who are unwilling to utilise the information they undoubtedly have about individuals and firms that churn should be named and shamed. The costs of churning are undoubt-edly borne by all clients, all advisers and all providers. The sooner this is routed out the better for all.

Dennis Hall
Director, Yellowtail Financial Planning, London EC3

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