Friends Life has made a U-turn on imposing higher charges on three self-invested personal pension clients and has extended their notice period for three months.
Graham Franklin, director of Manchester-based First Financial IFA, said the victory – coming a week after Financial Adviser revealed the life company had told clients that their Sipp fee would rise by 21.2 per cent – may prompt others to challenge the insurer’s six-week notice period for the fee hike.
Mr Franklin had argued that his clients had insufficient time to transfer from Friends Life before the charges came into force on the policies’ anniversary date of 30 January.
He said the insurer had dismissed an earlier complaint of his within 24 hours.
Capita, the plans’ administrator, announced at the end of last year that it planned to close its Sipp administration service.
In an email to Mr Franklin, a relationship manager at Friends Life’s Sipp division confirmed that the insurer has agreed to refund the new fees already paid by one client, with all three only required to pay the previous year’s charges.
The email said that Friends Life had taken his members’ individual circumstances into consideration and would only apply the previous year’s fees until point of transfer “as a gesture of goodwill”.
Mr Franklin has now requested that his clients are transferred to Liberty Sipp, where they will each pay £500 less in charges.
The climbdown could trigger a wave of similar challenges from advisers dissatisfied with the six-week notice period given by the insurer.
A spokesman for Friends Life said: “We were looking at Mr Franklin’s customers case-by-case and we are pleased that we have managed to resolve the situation for them now.
“We will continue to look at each case individually and we are implementing a longer notice period, which will provide customers wishing to transfer their business with three months’ notice of the change.”
