Prudential has made changes to its customer due diligence processes for offshore bonds, after a system issue meant an adviser could not invest on behalf of his client for a month.
In 2023, Tim Morris, an adviser at Russell &Co, had invested £100,000 into a Prudential offshore bond on behalf of his client.
The client then requested that Morris invest an additional £400,000 into the bond.
However, when attempting to do this online the adviser continued to run into issues with the system.
Morris said: “The system issue was very frustrating and dragged on for a couple of weeks.”
Morris attempted to contact Prudential to raise the issue but was unable to get in contact with anyone and decided to escalate the situation to another team.
Eventually, Morris was able to get in touch with the account manager who he described as “very helpful”.
“The way my account manager took ownership provided a massive sense of relief. It meant I could keep the client fully informed and updated.”
According to Morris, the issue took a month to rectify with Prudential agreeing to compensate both the client and adviser for the delay.
Procedural changes
On April 8, Morris received an email from Prudential, seen by FT Adviser, detailing the changes it has made to its anti money laundering processes for offshore bonds.
The email said: “It’s important we meet our regulator’s (The Central Bank of Ireland) expectations around how we identify and verify customers in the context of money laundering regulations in Ireland.
“But we also want to make it as easy as possible for you to place business with us. So, we’re introducing changes to our customer due diligence processes that will make it easier for you to place business with us, as we continue to meet our compliance requirements in respect of anti money laundering regulations.”
The changes which are now in place for all Prudential International Assurance offshore bonds include:
- The removal of documents to be certified as standard but Prudential reserves the right to request certified copies of documentation at any point during the customer due diligence process.
- No source of wealth evidence is now required for amounts more than £100,000 unless the investment amount is more than £5mn or the customer is classed as high risk.
- Prudential International Assurance does not accept money from third parties however joint payee, spouse, life assurance provider, customer’s platform account or solicitor firm acting on behalf of the customer do not count as third party payment.
- In relation to Experian checks, advisers can now confirm via their work email, the address and date of birth of additional customer associated roles.
- UK building society bank drafts drawn on a group account are now permitted where evidence is provided with the draft that clearly shows the monies originated from the customer's own account but must include a copy of either a bank statement, letter from the building society or building society cheque notes.
Prudential confirmed in the email the changes above would be updated in “due course” within the anti money laundering guide.
Once receiving this email, Morris said: “My client was massively impressed that Prudential updated its policy and procedure to ensure the issue doesn't happen in future. This is unprecedented and very welcome.”
Morris said had Prudential not dealt with the issue with “such proficiency” he would have “seriously reconsidered” the business as an option for his clients in the future.
A spokesman for M&G Wealth, said: “We apologise to Morris and his client for the delay as it is not the standard of service that we aim to provide.
"We continually review our processes and thank Morris for his feedback which has helped us to make improvements to the service we offer.
“In recognition of the delay, we have put his client into the correct financial position by adding additional units to the bond. We are also in discussion with Morris about compensating him for the additional time he has spent on this case.”
alina.khan@ft.com
