Pru accused of poaching Honister IFAs’ PMI policyholders
Product provider tells client ‘your adviser is bankrupt’.
IFA clients are being “aggressively” targeted and “disorientated” by a leading provider after the high profile bankruptcy of the Honister network.
A client of adviser Kerry Nelson, managing director of Nexus IFA, an appointed representative of the now-bankrupt Honister network, was approached by PruHealth, the private medical insurance arm of Prudential, telling him his financial adviser had gone bankrupt.
“This is wrong and abhorrent and could be quite disorientating to some clients, who up until that point will not have heard of Honister,” Nelson said. “The relationship is that of the adviser and the client, not the product provider.”
The client, who did not want to be named or speak directly to the media, had bought private medical insurance from PruHealth through Nelson, but was surprised to hear from the company directly and be told that his financial adviser had gone bankrupt.
Nelson said her client was told Nexus IFA was bankrupt and that his two options were to find a new IFA or take his business in-house with PruHealth. His suspicions were aroused by the sales-style call and he rejected the offer, then called his adviser to find out what happened. He has since received at least six calls from the Pru to follow up, all of which he has ignored.
Nexus IFA had not itself filed for bankruptcy and was instead left without FSA authorisation after the Honister went into administration. Because the network’s collapse meant Nelson could not longer provide advice, she has now decided to apply for directly authorised status with the FSA.
A spokesman for PruHealth said, “We have contacted clients to reassure them that they will not be left in the lurch if they have a claim or their policy is up for renewal. It is the responsible thing to do.” The firm said it was contacting customers directly because advisers, no longer appointed representatives and not yet directly authorised, are not currently able to give advice.
”Rather than put our customers in a position where they may be without cover, customers can contact us directly to renew their policy in the absence of having an appointed adviser with a live agency. As soon as they have appointed or re-appointed their adviser, we will be able to take servicing instructions either directly or from their adviser,” PruHealth sales director David Priestly said.
Nelson said she will not be recommending Prudential products in the future.