Adviser calls for regulatory change after 'shambolic' pension issue

Adviser calls for regulatory change after 'shambolic' pension issue

An adviser has called for an overhaul of the treatment of vulnerable customers after Clerical Medical took 15 months to pay out after the death of a client.

Richard Ellis, financial planner at Ellis Davies, said the regulator should focus more energy on firms who are essentially getting remunerated for delivering an unacceptable level of service.

Ellis spoke to FTAdviser after he tried to lodge a claim with the Financial Ombudsman Service about the length it took to organise a pension to be paid out after the death of the policyholder.

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He could not submit the claim as it had to be done by the policyholder, which was then the widow of Ellis's client.

“That in itself needs looking at,” he said.

"If we’re acting as the agent for the client and we’re not happy about the complaint, I think as a regulated financial advice firm we should be able to take on that complaint.

“My client is in a very vulnerable position and because of how the system works she has to take on that Fos process.”

Complaints history

Ellis was speaking after an experience with a client of his, who died suddenly in August 2020 without a will.

His client had a pension with Clerical Medical, now part of Lloyds Banking Group, and the client had informed his financial adviser that he wanted the pension to go to his 10 year-old daughter from a previous marriage.

The normal turnaround time for these claims is a few months.

Ellis initiated the claim in January 2021, and after not hearing anything he followed up with the company, but yet again heard nothing back.

In September 2021 he received a letter from Clerical Medical, addressed to “Robert Ellis”, from an unnamed complaints manager at the company who said the review into the claim was still underway.

The manager said Ellis would be contacted by October 7 with the results of the review into the complaint, but he heard nothing.

“[All of my complaints] went into a black hole, and I spent an excessive amount of time dealing with the claim, which obviously we don’t charge for,” Ellis said.

He added that every time he needed to speak to someone at the company, he could not get a phone number and the only contact details given were to a Lloyds Banking Group mailbox. 

A lot of these emails went unanswered, he added.

“At no point did I really get an apology to pass onto the client, and the client didn’t get anything in writing at all to say the claim was being dealt with,” he said.

Ellis voiced his frustration that he was doing pro bono work as a result of Clerical Medical’s service, who did not give him a contact number or even the name of anyone who was dealing with the claim.