Friends Life has admitted to breaching data protection legislation after sending pension policy information to a client’s former adviser, as the client’s new adviser told the provider he wanted to be compensated for time wasted in chasing them for errors.
Alan Kendrick, an IFA at Oakwood Insurance Consultants and Financial Services, was appointed as a client’s new adviser earlier this year, and sent Friends Life in February a letter of authority regarding two pension policies, as well as telling them to update the adviser details.
The client wanted to turn his pension policies into an annuity and wished to see final annuity figures, however, following a catalogue of errors from Friends Life, he only just received the annuity figures this week.
Friends Life admitted the reason for this was that the client’s records were not updated, so information was constantly being sent to his previous IFA. In documentation seen by FTAdviser, dated 28 July, Friends Life said the error was only picked up at the end of June, following several official complaints made by Mr Kendrick.
The letter said: “Unfortunately we did not update our records to show this straight away. This meant we incorrectly sent this information to your previous IFA instead of Mr Kendrick at Oakwood.
“This was a breach of data protection legislation. Any breach of data protection is treated seriously and this has been reported through the appropriate channels.
It added that “our records have now been updated to show Oakwood as your servicing agent, so they should receive all future correspondence relating to your pensions. I am sorry this happened and we failed to notice this sooner.”
As a consequence, Friends Life is backdating the request for benefits and it has also made an ex-gratia payment of £250 to the client.
The letter noted that there have been “numerous other examples of poor service” that Mr Kendrick has experienced which, collectively, meant the service that both the client and Mr Kendrick received has “been far from satisfactory”.
He also encountered wrong contact information on letters, no response to telephone calls or emails and the complaints department failing to acknowledge his complaints.
Mr Kendrick told FTAdviser: “So far I think the complaints department have had three attempts at a detailed investigation and each one has failed to pick up salient points. [They don’t seem focused] on getting it right for the client.”
He suggested that this has meant around 23 hours in the last five months spent chasing Friends Life and intends to bill them for his time. His hourly rate is around £200, which means a bill of £4,600 - however the provider has informed him that he can only claim a proportion of his costs.
In a letter sent to Mr Kendrick, Friends Life wrote: “If we have caused you extra work beyond what is expected when dealing with a pension claim for a client, we will consider financial redress is respect of the loss.
“You confirmed your hourly rate of £200. Whilst I accept this is the rate you charge your clients, we are unable to pay you that rate for your time spent. We are not employing your services and therefore cannot pay any profit that is factored in to your hourly rate.
“We also differentiate between time spent on administration tasks as opposed to providing professional financial advice. Administration rates we consider are usually around £50 per hour.”
A spokesperson from Friends Life told FTAdviser: “We acknowledge that errors were made in this case and we would like to apologise to Mr Kendrick and his client for any delays they have experienced.
The firm added that it is still investigating the complaints raised by Mr Kendrick and have been in contact with him. “We will also examine any claims for compensation as part of that investigation. The client’s wishes are now being processed.”
Earlier this year, FTAdviser revealed that self-invested pension firm Hornbuckle handed over around £1,200 to a financial adviser who threatened to go to court to recover close to £1,900 it claimed was outstanding from a bill to cover hourly fees for time wasted as a result of poor service.
In September, FTAdviser reported Mr Read, who has four clients with Hornbuckle Sipps, had billed the provider for a “lenient” £3,740 and had said he was willing to take action in the small claims court to recover the remainder after it paid half of the sum.
donia.o’loughlin@ft.com
