Independent 

Providers justify letter of authority stance

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

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