Prudential UK chief executive Mark Wood has castigated IFA Hargreaves Lansdown, describing its decision not to offer with-profits bonds as a “dereliction of duty”.
Wood made the charge in the Money Marketing with-profits debate recently in response to criticism of with-profits and the Pru's own offering.
Earlier in the debate, Hargreaves Lansdown head of pensions research Tom McPhail had said that he feels the company's decision to stop recommending with-profits policies had been vindicated by the events of the last few years.
McPhail also questioned what Pru investors would say if they knew that Pru's with-profits fund had paid out around 6.8 per cent on a return of 16.5 per cent last year.
He said: I think that if you went to those consumers and asked if they were willing to pay a 10 per cent premium for the security of the fund, they would not be so enthusiastic about it.”
But Wood attacked McPhail's argument as “spurious”, saying it was a reflection of smoothing. He had already outlined figures showing that the Pru bond had beaten managed funds over five years.
Wood said: “It is standing back from a vital role on behalf of the client to say that we will exclude you from an entire product category.
“That is a dereliction of duty as far as an adviser is concerned. For the vast majority of middle-market savers – those are the people who come to Hargreaves Lansdown for advice – when we compare the five-year returns for Pru bond, the violent oscillation in our fund has been smoothed out.”