I am rather assuming that, by now, most of you will have tried one of those tacky online 30-second endowment complaint tests. If you have not, give it a go and you might be pleasantly surprised. To cut a long story short, it seems that if the endowment was sold through an IFA, there is little chance of a successful claim as most IFAs fight each case tooth and nail. Some are honest enough to admit that such resistance makes their efforts financially unviable.Luckily enough for our firm, we were never heavily involved in endowments so our exposure is minimal. Nevertheless, we have had two complaints against our good name. The first, and most worrying, for our firm was from a client well known to us for being a bit of a weasel. He is the sort of person who would ask us to investigate some financial issue or other and swiftly transact the business direct despite being told this was a false economy. Why we have retained him as a client is another thorny story. So when we received a letter from a legal firm appointed by him to investigate his complaint, it was not entirely surprising. Suffice it to say, the six generic points in the initial letter from his firm of ambulance-chasers were rebutted one by one. This was not only very expensive for us, it was also extremely worrying. The sickening feeling that we were being forced to defend ourselves against a false accusation was immense. The accusations were nothing short of libellous but we had no option other than to proceed with a formal complaint and all that this entails. The second, but thank- fully somewhat humourous, incident involved a former employee of ours. The individual concerned, now retired for over six years, arranged an endowment for his daughter and son-in-law some 15 years before. We were somewhat concerned one morning to receive a letter of complaint from our retired former employee’s son-in-law asking us to explain the original advice from one of our “salesmen”. So what we had was a father suggesting that his daughter’s husband complained to us about her own father’s advice. Something told me there was a flaw in this review process and, indeed, the whole nature of complaining. It turned out that the plan started before he even joined our firm, when he was with his previous life office employer – a fact that we were very keen to point out. He had not remembered that small detail. What if we had not kept records? I would not want to go back that far and rely on life office records. When innocent advisers are being hauled over the coals as part of a flawed review process and have to endure this sort of confusion and farce, we have to ask ourselves where it is all going wrong and what we can do about it? There are an awful lot of honest advisers getting caught up in the crossfire. We all know why small firms fight complaints and why big ones do not. Each firm performs a cost/benefit analysis and it is clear that big firms and life offices just pay out on claims because it is cheaper for them to do so. There is plenty of anecdotal evidence to support this theory. It is normally shareholder and policyholder money they are spending and not their own. But small firms do not have that luxury. Ultimately, it boils down to who is spending the money. I gather that there are four types of spending – spending other people’s money on yourself, spending your own money on yourself, spending other people’s money on other people and spending your own money on other people (not counting gifts to your nearest and dearest). The easiest way is to spend other people’s money on other people. There are fewer checks and balances this way round. However, it leads to a culture of expectation when it comes to attempts by members of the public, maliciously or otherwise, to “have a go” at claiming compensation. Ironically, the more time we spend administering our regulatory responsibilities, the less time we have to give to our clients. It is hardly what I would call treating them fairly. It is a conundrum which, if you think about it too much, could have you losing sleep.
PIMA and the BSA have both welcomed Sir Malcolm Rifkinds Private Members Bill aimed at simplifying the pensions system and encouraging more people to save.PIMA says an important provision of the Bill is the idea long promoted by the body of a savings and retirement account, SaRA, offering the tax treatment of a pension with […]
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