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Strong case for renewals from an unlikely source

Having become increasingly conscious of the recent commentary questioning the justification of IFAs getting renewable commission, Legal & General recently (inadvertently) made a very strong case to support its continuation.

Having completed a mortgage for a new client last October and following our FSA authorisation in Dec-ember, I recently revisited the client to complete a full financial planning review.

The interview was conducted on a commission rather than fee basis (with little prospect of new business), primarily because the client will, in time, be a good advocate and profit-able client for our business.

During the interview, it became apparent that the client was a little lax when it came to keeping information and documentation about his life and pension polices, all of which are with L&G.

I reassured the client that with the information he did have and his written authority, I would contact L&G and get all the information required to ascertain exactly what policies he had and review them with him.

Having printed off a standard letter addressed from the client (with details of the policies numbers he did know), I asked the client to sign it and also confirm that he would be happy for me to transfer the policies to our agency so that we could benefit from the renewal commission as we had agreed to meet annually to conduct ongoing reviews of his financial situation, of which reviewing his policies would be a fundamental part.

Without boring you with the details, over the next five days, I faxed the letter of authority to L&G on three separate occasions but they were never able to find the fax on either of their two fax machines (yes, belt and braces, I sent it to both).

On the fourth occasion, L&G did receive the fax but said they could not action the request as the authority needed to be on our company&#39s headed paper (funny, I thought it was a letter from the client). I duly sent a new fax authority on our paper. Another two days went by and I phoned again for details. These are duly supplied on one policy but I am told that they have received no authority for the other policies despite all the policy numbers being on every fax I sent.

I became somewhat impatient at this point and asked to speak to a supervisor and was eventually given the details I required. Hooray, I thought, until he shared a lovely pearl of wisdom with me at the end of the call: “You do realise you won&#39t get any renewal commission on these policies because the client did not state in their own hand-writing that they are receiving financial advice from you and happy for you to receive the renewal commission” despite this exact wording being typed on the authority.

The fact that the renewal commission payable would barely cover my phone costs, let alone my time, (about two hours-plus) demonstrates that some recent comments about IFAs not “doing anything to deserve renewal commission” is somewhat wide of the mark. Would these commentators prefer we did not receive the renewal commission but charged the client for two hours of our time?

The inference by these commentators is that once IFAs have made a sale, they are no longer interested in the client. Do they honestly believe that there is any successful business model where you could have such blatant disregard for your existing clients and still survive, let alone prosper?

As for L&G&#39s admin and attitude towards IFAs, well, being newly regulated (although I have worked in the industry for over 15 years), I wonder if any of my fellow IFAs can reassure me that my experience of getting policy information from L&G was simply not typical of the way other providers in our industry operate? I am a little concerned that I may need to start collecting DNA samples from my clients before I can get policy information in the future.

Paul Smith

Director,

Provident Solutions,

Leicester

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