An adviser has claimed that his client missed his “window of opportunity” to exercise his guaranteed annuity rate because the advisory firm did not receive notification from Scottish Widows.
Richard Kafton, managing director of London-based Cedar House Financial Services claimed that although his client was informed by the provider that he had a window of opportunity to guarantee an annuity rate, he did not understand what this meant.
Mr Kafton claimed that Cedar House had not received any information, meaning the client missed out on his GAR.
Mr Kafton said: “As his servicing agent, we did not receive any copy correspondence and my client, who is in poor health, could not understand the invitation for him to exercise his GAR within a very narrow window of opportunity.”
In June, Cedar House wrote to Scottish Widows, claiming that the provider had not given his client fair opportunity to exercise his GAR available to him on his 60th birthday in February before it reverted to the normal market rate.
In the letter, Mr Kafton said: “I would expect a company of the stature of Scottish Widows to honour the guaranteed annuity rate on the basis of the FCA’s treating customers fairly regulations.”
A customer services administrator at Scottish Widows replied to Mr Kafton on 19 June, with a copy of its complaint information, promising to deal with the matter “as soon as possible”.
On 10 July, a month later, ScotWids again wrote to Mr Kafton apologising for “taking longer than anticipated” and said it was being resolved “as quickly as possible.” It wrote on 6 August, stating that as the provider had not dealt with the complaint within eight weeks, it referred Mr Kafton to his rights to complain to the Fos.
The financial planner said he would advise his client to take the matter to the Financial Ombudsman Service if a “sensible decision” was not reached.
A spokesman for Scottish Widows said: “We have done everything to give our customer and his financial adviser time to make a decision. We wrote three times between January and February to advise he was approaching his selected retirement date and urging him to contact us. Copies of the first two letters were also sent to his financial adviser.
“We wrote again in April explaining that because no response was received, his retirement date had been deferred and the GAR no longer applied. We did not hear back until a complaint was filed by his financial adviser in mid June.”
However, Mr Kafton said: “We did not receive a copy of the letter sent to the client on 9 January. The client only showed us this letter after his 60th birthday on 23rd February, and it was only then that we ascertained that he had a GAR under that policy.”
Adviser view
Sam Caunt, a partner at Northamptonshire-based Kingston PTM, said: “A recent issue we had with Scottish Widows has now been resolved and we are more than satisfied with the way its been dealt with and for the compensation we received for our troubles, but it should not have got to that stage.
“To be fair it admitted it had problems, but it seems that it has organisational problems between the people on the phones and those behind the scenes.”
