Handling of clients' letters of authority by providers are racking up a large number of issues for advisers, adding to the time and cost of dealing with client instructions.
Issues range from only named advisers being able to obtain information, to providers not responding in full to information requests, as well as failing to provide information in writing for the adviser's records.
Two advisers told FTAdviser they have faced problems where the adviser named on the letter is the only person able to obtain information from the provider, despite clients signing to say the whole company can deal with their cases.
Scott Gallacher, director at Leicester-based Rowley Turton, said he had experienced this problem with Sun Life Financial of Canada, who "insist clearly" they can only give information to the named adviser.
Hayley North, founder and chartered financial planner at London-based Rose and North, told FTAdviser the NHS pension scheme refuse to talk to anyone else but her.
"It makes it very hard to manage the business. I have to make all the calls to the providers and it is expensive," she said.
A spokesperson for NHS Pension Scheme said when an individual adviser has been specifically named it will not release information to another adviser even in the same organisation without the express permission of the member.
"Members can clearly wish for anyone working for a particular organisation to act on their behalf as well," they added.
A spokesperson from one well-known provider, who did not wish to be named, told FTAdviser this was not normal practice and when a letter of authority is signed they "release information to anyone in that firm on the case, not just one adviser".
FTAdviser understands from conversations with other advisers such a restriction is unusual practice.
Neville Kent, chief operating officer at Sun Life of Financial of Canada, defended the company's position.
"We work on an letter of authority basis if not dealing with the client themselves.Typically those letters of authority are issued for a specific adviser.
"We provide information in accordance with the letter of authority we have. If it specifies that information we provide that, if it is broader then we would provide that. We only provide information in accordance with the authority we have from the customer."
Other providers stated they are flexible around letters of authority to meet advisers' needs.
A spokesperson for Royal London said: "If they have multiple advisers and paraplanners who need access to the clients details then we would log authority for the firm and as long as they can confirm the relevant ID and verification checks about the company and client, we will provide information."
Ms North and Mr Gallacher believe providers that throw up hurdles to them accessing client information are in breach of the Financial Conduct Authority's principles surrounding treating customers fairly.
Mr Gallacher said: "In my view this is in breach of the Financial Conduct Authority's treating customers fairly outcomes barrier six, because it is making it hard for advisers and will cost clients more. There is no upside. I cannot see any other justification than to make life difficult for the clients."
The Financial Conduct Authority declined to comment on the issue surrounding treating customers fairly.
Multiple issues around letters of authority appear to be far reaching across the advice sector.
Alan Lakey, adviser for Hertfordshire-based Highclere Financial Services and director at CI Expert, said the major problem he had encountered was with Abbey Life, about which he complained to the Complaints Commissioner.
He said: "Unlike every other insurer or lender they will not accept a certified copy of an authority. They insist on the original. Surprisingly the Complaints Commissioner supported them and said it was up to each company to arrange its processes as they saw it.
"If I take on a new client with 10 investments I get one authority signed and send copies to all companies whilst retaining the original - it saves time and makes it easier for the client. Given that advisers are empowered to countersign passports and so on, this piece of stupidity is infuriating."
A spokesperson for Abbey Life said the requirements are part of its "thorough anti-fraud measures, which are put in place to protect our customers”.
Kim Barrett, proprietor of Hertfordshire and Essex-based Barrett's Financial Solutions, said some product providers he had dealt with do not recognise the signature on the letter of authority, and instead write to the client as a result.
Ms North added she had experienced problems where providers are not reading letters sent by her firm and not responding to them in full.
She said: "Nine times out of 10 they will not respond to some of the questions that have been raised. They give us bits of information instead of all of it. It is not reasonable and it wastes so much of out time and the client's time."
She said overall there was a "huge inconsistency" in how providers deal with letters of authority and it was an "exhausting process" having to complain to them on an ongoing basis.
Michael McLintock, director and independent financial adviser at Lanark-based Adelp Financial Solutions, said the biggest issue he had was providers fail to answer direct questions in writing, or asking for information which "seldom appears".
He has fears the information given over the phone or generic information from web pages is potentially open to challenge by a Fos system.
ruth.gillbe@ft.com
