Adviser and Scottish Widows customer Elliot Guthrie spotted the problem when taking a look at his own pension policy, and now fears other IFAs could also have been fed the misinformation.
Guthrie noticed the charge stated in a policy information sheet sent to him more than five times via post was 1 per cent.
This information sheet is usually sent to advisers, which they then use to base their advice on regarding client pension transfers.
But in Guthrie’s original plan documents, seen by FTAdviser, it states he has different charges based on the type of pension contribution.
They’re sending out misleading information to IFAs providing advice.Elliot Guthrie
While a single contribution charged 1 per cent, regular contributions charged a lesser 0.73 per cent, and transfers into his pension charged 0.55 per cent.
“So my actual charge is a 'blend' that works out to be around 0.65 per cent, because I've made all three types of contribution into my plan at some time or another,” Guthrie explained to FTAdviser.
“The charges quoted in all policy documents [Scottish Widows] sent out were 1 per cent and there was no mention of any discounts or policy-specific terms.
“They say this is a system issue, but advisers will be providing advice to clients based on these figures. I only noticed it because I'm the adviser and policy holder in this situation.
“They’re sending out misleading information to IFAs providing advice.”
Guthrie said 1 per cent might seem expensive, prompting advisers to base their recommendations on this - despite that basis being wrong.
FTAdviser understands that Scottish Widows has now apologised to Guthrie, who filed a complaint over the issue, and offered him a £300 payment to acknowledge it did not provide the correct information.
Scottish Widows confirmed the discounts on the original policy document were correct, and that the 1 per cent included in the information sheets was not wholly representative of the charges on his pension policy.
The pension provider is currently looking into whether other advisers, and by extension policy holders, have been affected.
A spokesperson for Scottish Widows said: “We’re very sorry that some of our customers have not received the level of service that they should and we’re working hard to get this back to normal, including adding 500 front line staff and reallocating experienced colleagues to more complex cases.
“We are making progress – for example the average call wait time is under 10 minutes and we’re making it easier to view policies online – and expect to have worked through the backlog of enquiries and complaints by the end of March.”
