A financial adviser has struggled to understand why Friends Life keeps sending him bills to claw back commission.
Edward Thomson, an adviser at Liberty Bishop Employee Benefits, has been told to pay back around £3,500 in commission paid to his firm for work carried out on a legacy pension scheme.
This is the second such request he has received, with the previous one sent last year when Friends Life said it was clawing back all the outstanding money owed.
Mr Thomson said: “I thought that after the antics in 2015 where Friends Life stated they were clawing back all outstanding indemnity commission and our settlement of the outstanding amounts that would be it; but no.
“In May we get another statement which brought forth the most recent complaint on which we have not received any form of a response, excepting the statutory complaint letters.”
The legacy group personal pension scheme was opened in early 2000 with Friends Provident and was subject to a 1 per cent annual management charge, with indemnity commission also being payable.
For auto-enrolment, Liberty’s client decided to go down the ‘qualifying earnings’ route to meet their staging date of July 2014.
Friends Life said they did not want to deal with this - the terms they offered were for a percentage of basic salary - so the employer auto-enrolled with another provider.
However, the Friends Life scheme remained in place for existing members and for ‘contractual’ joiners, who tended to be management, Mr Thomson explained. Until 1 July 2014, Liberty received indemnity commission and after this it received a level commission of 1.75 per cent.
Since 2015 his firm has not received any commission on the scheme.
Then last year, Mr Thomson received a statement asking for £3,496.17 in indemnity commission to be clawed back.
Friends Life blamed this initial clawback on the cap which forced firms to keep charges within default funds to 0.75 per cent a year.
Despite objecting to the request and not charging the client a fee because his firm understood no commission would be clawed back, Mr Thomson said he paid the bill out of “sheer exasperation”.
He has now received another demand for £3,563.57 which he said was “ridiculous”, because for some members there appears to be a credit amount.
An Aviva spokesman said: “We are looking into this urgently and once our investigation is complete we will contact Mr Thomson and let him know the outcome.
“We would like to apologise for the delay resolving this issue.”
