Prudential is boosting the number of staff working within its face-to-face advice service from an initial target of 80 to 120 by the end of the year.
The insurer began rolling out its Prudential Financial Planning service in February, following a pilot with around 20 field-based staff. The service offers face-to-face advice for existing customers that came to the Pru through its direct sales force, which was axed in February 2001 to focus on telephone, online and workplace customer service.
Pru had originally planned to grow staff numbers to 80 during 2012, but says it has now exceeded that target.
UK chief executive Rob Devey (pictured) says: “We were targeting 80 in the first year, we are actually ahead of that. In terms of total numbers now, we have got 90 in the field, and will probably have another 30 in place by the end of the year.”
Devey says while recruitment to Prudential Financial Planning “has gone slightly better than anticipated”, it will remain a small proportion of the company’s overall distribution.
He says: “When it is as big as it is expected to be in a couple of years time, the vast majority of our business will still be through IFAs. The discussion around this has become more grown-up. Most advisers came from places like the Pru in the first place, and they say they do not see this as biting the hand that feeds them. We very much focus this only on a subset of existing customers that came to us from the Man from the Pru.”
On the current debate surrounding exit fees on old pension plans, Devey says Pru reviews its back book annually to ensure the products offer value for customers.
He believes insurers should not shy away from the fact that there are costs associated with offering pension products.
But he adds:“What I am somewhat nervous about in the debate is the view that performance does not count. The reality is if you do not perform in terms of growing the pot, it does not matter how low your charges are.”
Devey admits that if a pension fund performs poorly and a large proportion of a customer’s pension pot is eaten away by charges, customers will “feel badly let down”.
But he adds: “There are some slightly dangerous issues around the obsession with short-term performance and obsession with the minimum possible cost. If you have the minimum possible cost with no investment performance that is not going to lead you anywhere.
“Costs do need to be appropriate and we certainly have not seen the last of this debate. We feel confident about the spotlight being shone on costs but we do not want the debate to completely dominated by that, because low cost with no performance will not generate anything for pensioners.”
Highclere Financial Services partner Alan Lakey says: “I do not have a problem with companies going direct, as long as they are not offering consumers preferential rates. The old days of the Man from the Pru gave people the opportunity to take out products, and primed them to speak to an IFA. If Pru makes a success of this, it implies banks who are pulling out of advice may have a rethink.”
Facts & Figures Financial Planners managing director Simon Webster says: “The Man from the Pru has never been serious competition to a professional IFA. Customers with smaller amounts of money with relatively simple needs will probably revert to services such as the Pru’s. That said, my heart is very much with those life offices that remain IFA-only.”