An IFA has accused Prudential of trying to directly solicit his clients with its new non-advised drawdown range.
Wayne Austin, director at Manchester-based Wayne Austin IFA, told FTAdviser he believed communications sent by Prudential to his clients constituted marketing by the provider to encourage them to invest direct, rather than via an adviser.
Prudential denied the claim, stating letters sent to Mr Austin’s clients about its products were for information only.
But Mr Austin questioned why Prudential needed to inform his clients they had launched a new pension, which offers the same fund choice as clients’ existing advised contract; “fundamentally one that doesn’t require an IFA”.
Mr Austin received a letter from the provider at the start of the month, warning him it would begin writing to his clients from 11 July to notify them of changes to one of its products.
At the end of September last year, Prudential launched a non-advised version of its Pension Choices Plan personal pension and drawdown product - the first time its PruFund range has been available to consumers without financial advice since it was introduced in 2004.
The letter to Mr Austin stated the provider would be contacting clients about a change in practices giving a wider range of customers access to the PruFund range, adding: “We should have told you and your client(s) at the time we made the changes, and we’re sorry we didn’t let you know earlier.”
It also included a copy of the draft letter to be sent to clients, which informed them that they can invest in the PruFunds range via Isas for the first time, along with giving access to the Pension Choices Plan.
The letter stated clients with any questions should call Prudential, or speak to their financial adviser.
But Mr Austin complained the letter deliberately suggests the Prufund range can be accessed without IFA involvement.
“We have been told numerous times that ‘your clients are always yours and we won’t cross sell’,” he stated, adding: “It would appear that trust and integrity is not a strong point when it comes to Prudential, considering it was us who introduced the clients to them.”
A spokesman for Prudential responded the provider is required to notify customers – while writing to advisers – and denied the letter was a form of marketing.
He explained that when the Prudential Isa and Pension Choices Plan were made available through the pension version of PruFund, this gave a much wider number of customers the opportunity to invest, so it was therefore required to notify existing PruFund customers in the Flexible Retirement Plan and Trustee Investment Plan about the change.
“We did inform advisers about the letter before we sent it to customers, as we always endeavour to be transparent with advisers about any communications we are sending to their clients,” stated Prudential.