RegulationSep 16 2014

Scot Prov makes payout to cover adviser ‘chasing’ costs

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Scottish Provident has confirmed it has made a payout to an adviser who complained the insurer had seemingly ignored a deed of assignment drawn up by a lawyer and thus failed to place a policy into trust, to cover time wasted chasing up the error.

Tim Brear, financial planner and director at Harrogate-based Brook-Dobson Brear, told FTAdviser that a payment was eventually made to compensate “for our time spent clearing up their mess”.

He explained that a deed of assignment had been drawn up by a private client lawyer to assign a policy into trust for the purposes of mitigating inheritance tax, which was then sent to Scottish Provident.

The insurer apparently did not understand some of the terms in the deed and ignored the form without notifying Mr Brear.

Once he escalated the issue, a lawyer for Scottish Provident found there to be nothing wrong with the deed, and while responsibility was not taken, a payment was eventually made for the time taken over the matter.

“My advice is to avoid using this cynical and dishonourable organisation,” Mr Brear wrote online.

Gareth Evans, head of corporate affairs at parent company Royal London, told FTAdviser that he was willing to accept that the firm’s actions were not as prompt as they should have been, due to the person dealing with the initial enquiry not having the sufficient technical expertise.

“It was regrettable, as the technical expertise is available, but clearly this should have been rectified sooner. We have now put this right, by making payment for the time spent on chasing this up.”

The case echoes another involving self-invested pension firm Hornbuckle, which is currently in dispute with an adviser over a £1,900 bill he claims is outstanding to similarly cover time ‘wasted’ chasing up poor service.

Advisers have often in the past sought to bill companies where poor service creates delays and extra work. The issue has come into sharper focus in the past two years, as regulatory and other costs squeeze margins and are already pushing up the cost of advice.

To read FTAdviser’s adviser guide to insurance policies in trust, and earn 60 CPD minutes, click here.