L&G ditched by adviser over service issues

Darren Cooke, director of Red Circle Financial Planning, said he moved two clients away from the provider after he felt the service had "deteriorated".

The clients held property in self-invested personal pensions (Sipps) and were switched to a specialist Sipp provider in November 2017.

According to Mr Cooke, it took L&G more than a year to transfer the two clients at a cost of about £5,000 in fees.

Mr Cooke said during that time L&G was "virtually uncontactable" and described the service as "ridiculous".

He said: "The service from L&G deteriorated and it took way too long to get any communication back from them.

"The service was utterly terrible and I transferred the two clients away to another provider who could offer a better rate and, quite frankly, at least some certainty."

Mr Cooke said he will not be bringing any clients to L&G in the future, bar perhaps an "occasional workplace pension" if the fees warrant it.

In response to Mr Cooke, a spokesman for L&G said: "We are very sorry to receive Mr Cooke’s feedback regarding service prior to and during the transfer. 

"Whilst the contract with Legal & General was a Sipp, the transfer was made to a Ssas and we assume that this was due to a product related requirement linked to the transfer.

"Our records show that from April 2017 to completion in October 2017 our solicitors were chasing Andre Perkins, the Ssas providers' solicitors, to complete the transfer as quickly as possible."

The spokesman for L&G added the final fee from solicitors Trethowans was £2,046, plus its own administration fee of £564. "Both are in line with our published fee schedule.

If the costs from Andre Perkins and the Ssas provider are similar this would equate to the £5,000 quoted, the spokesman said.

Other financial advisers also told FTAdviser Legal and General's (L&G) shift towards offering mainly digital services, which entailed stopping taking phone calls and corresponding through online platforms instead, had created more work for them, leading some to pass on the cost to their clients.

If a provider is slowing down the advice process by taking longer for their processes, I'd imagine they'd lose out to competitors that are faster and doing a better job.Ricky Chan

But L&G is not alone. Other providers have put in place similar strategies and advisers have previously said they are losing money as a result of worsening customer service standards at providers across the board.

In particular, not being able to have direct access to providers is leaving advisers unable to get hold of the client information they need, meaning managing their clients' finances is taking longer and costing more, they say.

Ivor Harper, director at Park Financial, said he is considering increasing his advice fees due to the time it takes him to deal with client finances.

This comes after he took to Twitter to voice his unhappiness over L&G's decision to stop taking phone calls. In his tweet, Mr Harper said L&G could expect "little support" from him.

He said: "If a client's policy required regular and ongoing response then we would move it away. It would be a hassle to do this, but would ultimately mean no extra advice costs for the client and a reduction in time spent dealing with their accounts."

Advice firm IFS Wealth and Pensions said it has encountered similar problems with L&G's services.

Ricky Chan, director and financial planner at IFS Wealth and Pensions, said L&G’s approach "prevented IFAs from doing their jobs". However, Mr Chan said he has not increased fees as a result of the issues.

He said: "I can understand why providers are [digitalising] as part of cost savings and efficiency. But it does create difficulty because sometimes you just have a simple question and you wish you could just pick up the phone to speak to someone, rather than waiting two days for a reply over a fairly trivial matter."

Nathan Long, senior pension analyst at Hargreaves Lansdown, said if digitalisation ends up creating a poor service, then this could serve to undermine the quality of advice given by advisers.

"If providers get rid of human interaction, they risk hollowing out the value of their propositions," he said. 

"If an adviser's quality of advice is undermined, because it can't get information from providers, then this is a large issue for all involved."

In response to the issues raised, L&G said: "This relates to the Mature Savings Digital Response Team only within L&G and was introduced over 18 months ago with a dedicated team who work more flexible and longer hours to make sure we reflect the differing needs of financial advisers in a more digital and extended working day.

"The introduction of the email digital service followed surveys and the changing needs of advisers recognising numerous requests on different products were taking lengthy calls. 

"Email enquiries are dealt with within a published 48 hours, often this is exceeded and can be far quicker than a telephone call which is then referred to an administration area. Since launch, improvements in automation as well as further advisor surveys allows the service to consistently evolve and meet or exceed published service standards."

rosie.quigley@ft.com