Alan Lakey, director at Highclere Financial, was embroiled in a month-long battle with the pensions and insurance giant to find out why his client’s pension had not been switched as requested, when Aviva told the client Mr Lakey was not allowed to do the transaction.
Mr Lakey told FTAdviser: “I’m extremely angry. I would have been angry even if it had been true, as Aviva should have come to me in the first instance, but it didn’t. Aviva told the client wrong information without even checking.
“Imagine if my client was the sort of guy to believe Aviva — once you lose the confidence of a client it is very hard to get it back.”
No one at Aviva was prepared to take responsibility. This is a massive firm, how did they make this mistake?Alan LakeyThe situation was eventually resolved after both Mr Lakey and his client, Roger Sykes, filed official complaints with Aviva and called the firm multiple times.
Aviva told Mr Lakey the issue stemmed from a mistake made by the firm’s technical team after an employee had misinterpreted the difference between the rules for a pension switch and a pension transfer.
Mr Lakey does not have permissions to arrange a pension transfer — where there are safeguarded benefits involved, such as with a defined benefit transfer — but has the standard qualifications required to make a pension switch.
The requested action had been a pension switch from an old Axa personal pension, set up in 1993, to a Prudential policy. Mr Sykes wanted to take his 25 per cent tax free cash and de-risk the portfolio.
Mr Lakey said: “Why did it take four weeks and seven phonecalls from me, and more from Roger, before they told me the reason they had not transferred the cash?
“No one at Aviva was prepared to take responsibility. This is a massive firm, how did they make this mistake?”
It felt as if we were up against a brick wall every time we spoke to AvivaRoger Sykes, Mr Lakey's clientMr Lakey has now invoiced Aviva for £240 for the “unnecessary” time he and his staff had spent dealing with the issue and he expects a written apology to him and compensation for his client.
The client’s tale
Mr Sykes, Mr Lakey’s client, and his wife Kathy Sykes told FTAdviser the process of finding out what had happened to his pension pot was “really quite upsetting”.
The couple had been expecting to receive 25 per cent of Mr Sykes’s pension in a tax-free cash lump sum at the start of March and became concerned when, as time passed, the cash did not appear but the pension was no longer held in the Aviva account.
After receiving the forms and discharge papers from Mr Lakey, Aviva had taken the funds into a ‘suspense account’ where it was set to be transferred to the new Prudential pot.
Mr Sykes said: “It’s been an absolute shocker [dealing with Aviva]. It felt as if we were up against a brick wall every time we spoke to them, they were refusing to go anywhere with it.
“In the grand scheme of things it’s not a massive amount of money but we had things we wanted to do with the cash. We were not expecting Aviva to put up walls.”
Mr and Mrs Sykes said they had started to get “jittery” as the markets began to react to the coronavirus crisis and they did not know where their money was.
Mr Sykes added: “I had no confidence in them. They had my money and I was scared they were going to put a drawbridge up. It was such a draining experience.”
He said he never had any doubt in Mr Lakey, adding he was shocked Aviva did not "check and double check" they were correct before sending him the letter regarding his adviser’s permissions.
Aviva's response
A spokesperson from Aviva said: "We apologise to Mr Lakey and to our customer, for the time it’s taken to rectify this issue and we have been in contact with Mr Lakey to set this right.
"We unfortunately made an error when we checked the relevant FCA permissions for advising on pension switching and incorrectly applied the process for pension transfers to Mr Lakey’s client.
"We have now resolved this, and we have updated our internal processes so this will not happen in future. We apologise for any inconvenience this has caused."
Aviva said it would pay £350 in compensation to Mr Sykes and undertake an assessment to ascertain if the he would have suffered any investment loss as a result of the delay. It will also pay Mr Lakey's invoice.
A wider problem
Adviser struggling with poor service from providers is nothing new. Back in 2018 advisers were complaining of long waiting times and incomplete client documents, arguing they were losing money as a result of ever worsening customer service standards.
Another blunder from Aviva left an IFA out of pocket a few months ago but, when he emailed to complain, it took weeks to get a response. Last week advisers described working with Royal London to overcome a pension issue as "a nightmare".
Prudential last year admitted it had provided poor service on its retirement accounts after it received multiple complaints from an adviser and Aegon has been taken to the ombudsman over its platform woes by several clients.
The issues do not stop at insurance and pensions giants and platforms. Leeds Building Society buckled under pressure from an adviser over its “terrible service” after a mortgage client was left "angry and disappointed" at numerous stages of the process to take out a £940,000 mortgage.
Mr Lakey said there was a wider problem with providers generally not giving advisers, and their clients, good service.
Sarah Drakard, IFA at Cruze Financial Solutions, agreed, adding: "Sometimes it is an absolute shambles and it really influences my opinion on where to place business the next time. Service does have a part to play.
"Providers could respect advisers' time more and realise we guide where business is placed."
imogen.tew@ft.com
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