This week..
Keeping an eye on trail commission refunds
Can I suggest advisers check that Aviva (and no doubt other companies) actually do reimburse the client for trail commission and stop making deductions from the policy when ongoing payments to advisers cease?
When I retired a couple of years ago, I tried to get Aviva to reinvest the trail commission of £800 a year back into the policy (an old investment bond that couldn’t be encashed because of the higher rate tax charge). Aviva refused, and the Financial Ombudsman Service upheld the refusal, and so Aviva pocketed the money.
What would happen if the Financial Conduct Authority imposed a ban on trail, but didn’t insist (thereby supporting the FOS’s point of view) the clients did not need to benefit from the money? The insurance companies would have larger profits.
Robin Hunter
Time for a clean-up
All trail should have been switched off after the introduction of the retail distribution review. Don’t talk to me of contracts – it was (and still) is high time the industry was cleaned up.
We had customer-agreed remuneration. If you were too guilty to contact the client on this basis it shows that you were scamming them and even you yourself were not convinced you were entitled to it.
The simplest way was just to tell the client that what the provider used to deduct automatically you will now invoice for directly, and of course explain why the charge is justified. I had no problems and I was only a one-man-band, so I really don’t see why other firms would regard this as unfeasible.
Indeed, nowadays you have to provide quarterly valuations to boot.
Harry Katz
HA7 Consulting
Problem of financial abuse
It is interesting that advisers are being urged to watch out for signs of financial abuse (‘Advisers urged to watch for signs of financial abuse’, see page six).
This will be a familiar situation with most advisers and usually the male partner in a relationship will be the one calling all the shots.
The problem is that it is easy to identify financial abuse, but what does an adviser do with the information if they have suspicions? Who do you report it to?
The police will not be interested unless you have irrefutable cast-iron evidence.
The adviser also runs the risk of enraging the male partner and it ends in a complaint situation.
The easiest way for an adviser to deal with a financial abuse situation is not to deal with the clients if they suspect financial abuse – but that does not solve the problem.
Name and address supplied
Unregulated introducers
Thanks for your article about unregulated introducers for pension transfers (‘Pension transfer into Dubai property costs adviser’, Jan 6).
I am aware of several unregulated introducers who are active in this field and are in fact former regulated advisers.
Most stopped being regulated when the FCA raised the bar with level 4 qualifications back in 2013.
However, these people still make a living from pension transfers; I do not believe for one moment that they do not influence the client.
After all, if the transfer does not proceed they do not get paid.
There should be a much higher level of scrutiny applied to unregulated introducers that were formerly regulated advisers.
This is an area of the market that noone seems to have picked up on.
Andy Goodwin
Moneytree Financial Solutions
The cost of pensions equality
I have just read the piece from November where Baroness Altmann (‘Altmann calls for state pension reform’, Nov 5) calls for reform for pensions and sees the injustice to women born in the 50s.
In no way do I disagree with equality, but when I started work in 1972 on a low wage I entered into an agreement that I would work all my life and receive my pension at age 60.
I wonder why this is not seen as a huge robbery of so many women’s futures; many of whom will not live to receive a pension?
I have been a nurse for more than 40 years, earning too little to afford the National Health Service pension scheme for very long.
Now, age 63 with a heavy heart after years of giving my best, and with aching feet, I have to wait another two-and-a-half years for my state pension.
This means I am missing out on a few good years to reward myself for the service to others, the opportunity to support my family with child care, and to serve the community still with volunteering.
I believe my health will be worse when I retire and I will be a financial burden on the state. It does feel as if I am a second-class citizen with few rights.
I understand that the cost of pensions may be too large for the economy and I have no economics background.
However, I do feel for the 3.8m women in the UK today affected by these changes. I would like to find a new way of looking at how they can deal with the changes to bring about feeling of hope.
Rather than moaning about our circumstances, we only have one responsibility in our lives and that is our attitude.
However, if I were to express this on social media I can imagine the backlash. Maybe I should just be brave and expect the wrath.
Adrienne Cousins
