Phoenix Life has finally backed down in a stand off with an adviser after misplaced allegations his firm was involved in pension liberation.
Five months of stalemate ended after Jim Bell of Serenus Consulting hired lawyers to challenge the provider and clear his name, when Phoenix refused to even discuss the issue with him, he said.
Mr Bell and other advisers told Financial Adviser they supported Phoenix’s vigilance of pension scams, but said the case highlighted widespread problems caused by providers’ poor communication with them.
“My overall feeling is this is typical of the current state of the UK pensions industry. It feels like every day IFAs are at war with providers when we look to transfer a pension away from any of them,” Mr Bell said.
A spokesperson for Phoenix said its “robust processes” protect customer interests, adding “we are not putting unnecessary barriers in place to stop IFAs transacting on behalf of their clients”.
Mr Bell became aware of an issue when Phoenix refused to supply him with information about a client’s pension scheme in November last year.
At that time, Phoenix told Financial Adviser the adviser’s company had links to pension liberation - a claim Mr Bell strongly denied.
Mr Bell said he was forced to hire lawyers “at substantial cost” to reveal in fact Phoenix had flagged Serenus because of a request for transfer values and discharge documentation by two unrelated companies, both recognised as linked to pension liberation schemes.
Documents seen by Financial Adviser revealed someone had falsified a Letter of Authority and association with Serenus to try and pass themselves off as regulated.
Mr Bell said he was “very pleased” the issue had now been resolved, but dismissed Phoenix’s statements that it had given him numerous opportunities to discuss the matter.
“This false Letter of Authority was sent to Phoenix in 2012 and at no time did it ever approach my firm to raise the alarm, and in the subsequent two years I transferred away six other clients from them,” he said.
Providers are expected by the Financial Conduct Authority (FCA) to help prevent pension liberation fraud.
Pension liberation cases are falling in number, but increasingly sophisticated criminals are targeting larger scams, according to City of London Police statistics. Reported pension fraud in the year to February rose by almost £3m to £13.2m, compared to a year earlier, generated by 640 cases compared to 1,883 cases in the previous period.
A spokesperson for Phoenix said it has prevented over £28m of customer funds being lost to fraud.
But Steven Robinson, managing director of Clarke Robinson, said by not informing Mr Bell his firm’s name was being used illegitimately, Phoenix may have allowed the fraudsters to continue undetected.
Advisers said providers’ poor communication often exasperated what could otherwise have been easy matters to resolve.
Steve Hennessy, associate director at Myers Davison Ginger, said providers often “do not respond to direct questions about the important parts of the pension”.
Any request from a client to a provider should involve the IFA, according to Robert Lewis, operations director at Heritage Financial Solutions. “They need to keep us in the loop. It’s definitely a two way street - we do need to talk more.”
A spokesperson for the FCA said all firms must adhere to its Principles for Businesses, to conduct business “with due skill, care and diligence”.
Action can be taken against companies the FCA believes are carrying on regulated business without being authorised, the spokesperson added.
A spokesperson for Phoenix Life said: “This is a sensitive matter and any suspected cases of pension liberation have to be handled carefully. We do acknowledge that communications, between ourselves and Mr Bell, could have been handled differently, however our number one priority was for our policyholder.”
ruth.gillbe@ft.com
