Prudential under fire for poaching clients

Prudential under fire for poaching clients

Prudential has been accused of trying to steal an adviser's business in documentation addressed to their client.

Scott Gallacher, director of Leicester-based Rowley Turton, said Prudential claims to be committed to advisers yet IFAs "create a quandary for them and other providers".

He is the latest adviser to level criticism at Prudential for client poaching, something Prudential denies.

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In July last year, an IFA accused the life company of trying to directly solicit his clients with its new non-advised drawdown range.

Wayne Austin, director at Manchester-based Wayne Austin IFA, told FTAdviser he believed communications sent by Prudential to his clients constituted marketing by the provider to encourage them to invest direct, rather than via an adviser.

Other providers have also been accused of trying to poach advisers' clients.

 Aegon was called out for it in March last year when two advisers blacklisted the firm after it made what they claim were calculated attempts to take the client relationship direct to the detriment of customers.

In this most recent example, Mr Gallacher claimed Prudential had deliberately cut Rowley Turton out of the communication sent to their client.

A letter sent to his client makes no mention of Rowley Turton as the assigned adviser.

It instead states financial advice is one route of support and pointed to a restricted advice offering from Prudential.

A part of the letter to the client reads: "If you would like advice on the best option for you and your circumstances, a Prudential Financial Planning adviser can help.

"They'll be able to give you face-to-face advice on your retirement options and recommend the most suitable route for you."

Mr Gallacher said IFAs independence erodes providers’ profitability as they reduce costs to compete for adviser’s recommendations.

He told FTAdviser: "In order to maintain distribution but without reduced profitability, there now seems to be a concerted effort by many traditional insurance companies to ‘poach’ IFA clients for their own restricted advice arms; consequently the Prudential letter is unfortunately not a surprise to us."

Mr Gallacher was also keen to point out examples of good practice such as Old Mutual Wealth, which clearly detailed the adviser firm in documentation to the client.

Paul Lindfield, director of wealth management at Manchester-based Sedulo Wealth Management, said providers have always been this way.

"It's all geared towards their own business. 

"With regards to Prudential it is someone that we haven't supported for a while because of that reason. We have derisked our business away from most of these types of businesses."

A spokesperson for Prudential said the firm places a high value on its relationships with financial advisers.

The spokesperson told FTAdviser: "We do all we can to support advisers and have a clear process when dealing with customers who are their clients. 

"We recognise the importance of advisers’ relationships with clients and have strict internal rules to protect this.