Your IndustryMay 21 2020

Adviser anger over battles with ‘faceless’ providers

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Adviser anger over battles with ‘faceless’ providers

Advisers have said they are battling a declining level of service from providers, which leaves them scrambling for answers from “faceless” companies, often resulting in frustrated clients and lengthy delays.

Their gripes include blunders that leave the adviser looking incompetent or as if they are “passing the buck” in front of the clients, and call centre staff with insufficient knowledge to deal with problems effectively.

Advisers pinned the blame on a falling number of “reps” who can develop a relationship with them. While advisers attributed this to cost cutting, providers said this was due to the rising use of technology.

The problem

Julian Pruggmayer, director at Financial Risk Management, said: “This industry is a complete mess and it does not seem to be getting any better. It seems some providers do not even want to do business with IFAs anymore.

“There’s been a drastic decline over the past 10 years, and it’s really because the amount of business we’re generating is shrinking.”

Paul Gibson, director at Granite Financial Planning, agreed service standards from providers had slipped, adding: “The service from large providers seemed to deteriorate every year. If you are not giving a firm new business, they generally are not interested in you.”

He said it was a battle to get information from certain providers as call centre staff had insufficient knowledge of products and that while he tried to manage client expectations, the time delay spent on queries was understandably frustrating for them.

Mr Pruggmayer said he was currently struggling with two providers over issues for his clients which stemmed from miscommunication or poor service.

With one major life company Mr Pruggmayer had sent a letter of authority to the firm — which held the client’s pensions — but the company said it could not find a trace of the client within its system.

Elsewhere, a provider had taken 22 days to respond to Mr Pruggmayer to tell him they required information which had previously been sent over two pages in a single page, adding more than three weeks onto what should have been a simple transaction.

Alan Lakey — who recently battled with Aviva after it subjected a client to lengthy delays and falsely assumed he did not hold the correct regulatory permissions to arrange a pension switch — said trying to get through to some companies was “extremely slow and irritating”.

He added: “Many clients cannot believe the poor levels of service and I am sure that many think we are at fault and are trying to pass the buck. The reliance on online systems that frequently do not work is one of the prime causes.”

Advisers struggling with poor service from providers is nothing new. Back in 2018 advisers were complaining of long waiting times and incomplete client documents, arguing they were losing money as a result of ever worsening customer service standards.

Blunders from Aviva included leaving an IFA out of pocket and then taking weeks to respond to his queries as well as taking too long to resolve a pension error which meant a client’s pension payments were not processed correctly.

Last month, advisers described working with providers to overcome legacy pensions issues as "a nightmare" and Aegon has been taken to the ombudsman over its platform woes by several clients.

Prudential last year admitted it had provided poor service on its retirement accounts after it received multiple complaints from an adviser and just last week FTAdviser reported an adviser had been battling with the firm over the digitisation of its Isa for weeks.

Money makes the world go around

Tim Morris, an adviser at Russell and Co, said the decline in service was linked to the drive to cut costs, which he said was “not a problem” as long as the provider had “good online functionality” to back it up.

Several adviser platforms have faced a large number of complaints in recent years because of replatformings or tech upgrades that went wrong.

Scott Gallacher, director at Rowley Turton, agreed, saying advisers were “to some extent the architects of this decline” as good IFAs had helped drive down the charges on financial products.

He added: “As a result of declining charges — and presumably declining margins — providers have had to look to cut costs, and unfortunately administration and broker support is one of the ways they have done this.

“One of the issues is that without a dedicated broker rep, you’re dealing with a faceless admin team, who are not really rewarded for sorting your particular issue and instead are seeming happy to ‘follow procedures and timescales’, even if we feel these procedures and timescales are unacceptable.”

Mr Gibson said it was a battle to get information from certain providers as call centre staff had insufficient knowledge of products, and that while he tried to manage client expectations, the time spent on queries was understandably frustrating for them.

Tech revolution

Providers acknowledged there had been a fall in the number of sales people who advisers could contact if something went wrong. But they attributed this to the “digital revolution”, rather than to cost cutting.

An Aviva spokesperson said: “Widespread access to technology and advances in what we can individually do with technology has changed the way we all interact with providers across all industries.

“Consequently, the way customer service is offered has also changed — we all experience this in every aspect of daily life, whether professional or personal.

“The ability to self-serve can often be a much more efficient way of transacting than we used to see. It is also true that it has inevitably led to rebalancing of support systems as providers review where most resources are needed to support the ways of working we are all now used to.

“Where problems do occur, we always strive to provide a timely response and keep advisers informed of progress.”

Tom Dunbar, distribution director at Royal London Intermediary, said the current coronavirus pandemic had accelerated some providers’ push towards technology.

He said: “There has been a gradual trend across the industry to cut back on sales people and in particular in face-to-face sales people.

“However, at Royal London we are passionate about the value of face-to-face sales support. Most advisers service their clients on a face-to-face basis, and we believe advisers deserve similar service levels from the providers they recommend.

“Covid-19 creates an opportunity for advisers and providers to embrace technology. It has been fantastic to see advisers use new technologies to conduct remote client reviews, but also not unexpected given how advisers have successfully adapted to change over many decades.”

Not all doom and gloom

But some advisers were more positive on their experiences with providers, noting that while some aspects of the adviser-provider relationship had declined, there were providers out there with good service.

Darren Cooke, financial planner at Red Circle Financial Planning, said: “There are still plenty of broker reps out there and most of the larger providers certainly have them. I have certainly found them helpful over the last couple of weeks.”

Alan Chan, director at IFS Wealth and Pensions, disagreed with the fact that providers’ service had declined at all.

He said: “We’ve generally had good service from providers, and where things do go wrong we would take that up with the relevant team and it normally gets resolved quickly.

“It can paint us in a bad light if certain transactions can’t be sorted efficiently with the provider, but the providers we work with in the main are efficient and accountable.”

imogen.tew@ft.com

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