National financial advice firm LEBC has been forced to hire external paraplanners as a temporary measure to help with a backlog of cases after it saw its internal paraplanner numbers dwindle.
Kay Ingram, director of public policy at LEBC, told FTAdviser: “Following the decision to stop offering defined benefit transfer advice we had to make a number of staff redundant and as expected some staff decided to leave of their own accord.
“Due to this, as a short-term measure we are looking to use external paraplanners to help with the backlog of work.
“We are currently hiring to fill the positions available.”
LEBC is also working to reorganise its paraplanning teams to make them more efficient.
It has two paraplanning teams in Leeds and Bristol and will be building a third team in Reading.
An LEBC adviser, who wished to remain anonymous, said: “It is a nightmare at the moment. I have cases that I submitted to paraplanning in November that haven't even been looked at yet, and they have said that there is a 200 case backlog.
“There is an 'escalation process', but of course that's not much use as everyone wants their cases escalated.
“At the same time, we are told, with very limited exemptions, that it must be a paraplanning drafting advice.
“It's a worry, because I (and I am sure I speak for all my colleagues) want to give a good service to clients, but it's hard if it takes two to three months to prepare even straightforward advice.”
FTAdviser reported in September that LEBC voluntarily relinquished its pension transfer permissions to the Financial Conduct Authority, as a result of the watchdog's DB market review.
Ms Ingram said that some advisers and paraplanners had chosen to leave LEBC following this decision as they could no longer carry out the work they wanted to.
She said: “Staff have left on good terms and are thankful for the training and development they received from LEBC.
“But they have chosen to leave as they are no longer doing the work they used to following the withdrawal of DB transfer permissions. We are now looking for additional advisers.”
LEBC came under fire only last month after it was revealed the firm was making a change to its bonus payment structure and will now pay its advisers in quarterly instalments over the year, instead of a lump sum in December, to allow it to “evaluate the quality of advice”.
When asked if this move was also linked to the company’s decision to voluntarily relinquish its pension transfer permissions Ms Ingram said there was “no direct link”.
This move created animosity among advisers who were expecting to receive their full bonus last month.
An adviser at LEBC said: “I’m not happy and I’ve spoken to other people that are also not very happy.
“People planned to have this money coming in at Christmas time and now this is not going to happen.
“We know about the issues the firm has had in the DB market, but most of us don’t have anything to do with that, so why should we be punished?”
amy.austin@ft.com and maria.espadinha@ft.com
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