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Pru pushed IFA aside to &#39advise&#39 pension client

A (now former) client of mine rang Prudential for an enhanced ill-health annuity quote for his vesting retirement annuity plan, for which I am the servicing IFA.

Rather than just receive a quote, he was instead steered towards Pru&#39s Belfast-based “advice team”, which proceeded to persuade him that what it had done for him constituted advice, whereas what I had done (fact-find, research, presentation, etc) was not. This has resulted in a client, who was happy to deal with me on two occasions this year, being turned against me and in no commission being paid for this advice.

I visited my client on a separate matter earlier this year and mentioned that his Prudential pension was due to vest on September 1. I explained the open market option and said I would be pleased to advise him accordingly closer to the date.

I wrote to my client on April 28, again mentioning that I would be happy to advise him on the open market option closer to September 1. I also mentioned that enhanced annuities were available, for example, for smokers. I am not sure whether, prior to this, he was aware of the options available. My plan on receipt of the vesting figures was to discuss other options such as income drawdown.

In July, I believe, my client&#39s vesting figures were sent to him direct but we did not receive a copy. As the IFA on the policy, I have been advised that a copy should have been sent to us. This was the first instance of us being bypassed. On the pack he received was a Prudential telephone number, which he was asked to ring if he wanted any information, further quotes, etc. He rang and requested information for an enhanced annuity due to his health problems.

Rather than just send him quotes or refer him to his IFA, he was taken under the wing of Pru&#39s advice centre in Belfast, which then proceeded to deal with him direct. He was actually sent a letter of appointment to complete which would remove us and appoint Prudential as his adviser. This was the second instance of us being bypassed.

My client is alleged to have said on July 24 that he did not want to deal with his IFA in this matter. He has twice denied to me that he said this.

I contacted my client and conducted a fact-find meeting on July 30 so that I could check his open market option alternatives. He showed me the quotes he already had from Prudential, which I was alarmed to see made reference to its advice centre consultant. I assume that, as a Prudential representative rather than an IFA, its consultant is not able to advise on open-market options. Instead, my client was being cajoled into remaining with Prudential.

Having researched the market and obtained a number of annuity quotes, I rang my client to advise that the Prudential enhanced annuity quote was actually the best available and that we should meet up ASAP to get the forms off. At this point, he said he would send them off himself and was surprised I had been in contact with the Pru, as he thought I would only check other companies. I explained that I had to check Pru&#39s quote as it had come up in my fresh research and rates could have changed (for better or worse) since he had been sent his quote. My enhanced annuity quote mirrored that issued by the advice centre but showed that commission would be payable to an IFA.

He was happy with my explanation as to why it was important for me to contact Prudential but would still send the forms off himself.

I then began to worry as to whether forms received direct from one of my clients by Prudential in respect of one of its vesting policies might lead to me not being paid for my advice, bearing in mind that Pru had not seen fit to send me copies of the vesting quotes and paperwork.

My paranoia (resulting from numerous dealings with Prudential) proved to be well founded, when it told me that its records were showing that as the quotes had been produced by the advice centre and the client was returning them direct, my involvement was being ignored.

Since then, I have spoken to numerous Prudential employees on this case and have (potentially)wasted hours of my valuable time trying to turn the tide. I even received a form on August 8 from the pensions department, which I was told needed completion, to enable payment of the annuity. I was very concerned that my client might not be getting his annuity rate since his quote expired on August 7. Pru later confirmed that the form was not required and that it had everything it needed. More time wasted.

Pru informed me that, at August 12, I was still showing on its records as the servicing agent on my client&#39s policy and that, as things stood, I would after all be receiving commission for the case. I have this week been advised that the case has been pushed through the advice centre route and that I am, therefore, being excluded, as feared. The client did not return the letter of appointment to Prudential, which would have appointed it as his adviser, and so has now apparently sent a fax to the Belfast advice centre confirming that he was advised by Prudential and no longer considers me to be his IFA. I cannot imagine for one second that this fax was unsolicited, rather that it was requested by Belfast.

Why would a client, who had sent all his paperwork off to Prudential and was merely waiting for his annuity to start, suddenly decide to send a fax (of all things) which serves only to better Belfast&#39s argument that it gave advice and should therefore be credited/paid for it.

My key complaint is that Pru&#39s so-called advice team has not given advice but has merely given quotes. Since this is all that the client wanted when he rang Prudential, what advice does it feel that it gave?

It was me who completed a terms of business letter, a financial fact-find, researched the annuity market, received alternative quotes from a number of providers (including Prudential) and only then was able to advise the client that the Prudential enhanced ill-health annuity was the best available and that my advise was to proceed with it.

Was any form of fact-find completed by the Pru “adviser”? Was attitude to risk discussed? Were other options considered? I have heard no reference made to income drawdown, phased retirement, with-profits annuities, etc.

Do Pru&#39s “advisers” plan to complete further research in order to advise on suitable investments for my client&#39s tax-free lump sum, which he had expressed an interest in receiving from me when I completed my fact-find meeting? I will not be advising him again since he has been persuaded by Prudential that I am no longer his adviser.

I am feeling that I am just one small person trying in vain to battle against the multitude of names and departments at Prudential, in a matter that, when you strip away all the recent confusion, boils down to one fact. An IFA&#39s client, who rings the Prudential for a quotation, stands a good chance of being denied his opportunity to receive independent financial advice by being helped instead by an appointed representative of Prudential.

I appreciate that a client is free to choose if he wants to deal direct with a company but I feel that my client has been deliberately steered in the direction of a Prudential adviser rather than just provided with the quotations he asked for when he rang.

Ironically, my compliance team warns me that I am liable for the advice I gave my client that his Prudential enhanced annuity is his best option. In the event of a future complaint, we could face compensation claims or fines, which would normally be covered by commission paid. However, I appear not to be about to get paid any commission for this advice, since Prudential&#39s advice centre is retaining it.

Dave Harris

Director,

Neptune Financial Management, Bristol

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