FCA to 'engage' with ReAssure over IFA complaints

A spokesperson for the FCA told FTAdviser it is currently in talks with ReAssure over the claims and it expects all firms to treat customers fairly.

They said: “We are engaging with the firm to understand the reported issues facing customers of ReAssure. 

“Firms must comply with our rules and principles and where they do not, we will take action.”

In its full year results released today (March 14), Phoenix Group, which owns ReAssure, increased its dividend by 3 per cent after generating £1.7bn in cash in 2021, over its £1.5bn to £1.6bn target. 

This includes £234mn generated from ReAssure, bringing the total to £930mn, short of a revised £1bn target.

IFA concerns

On Friday (March 11), a number of IFAs raised issues on social media about the company, which life and pensions consolidator giant Phoenix Group bought from Swiss Re in July 2020.

According to the advisers, ReAssure has been taking months to switch clients’ investments, incorrectly told clients a fund in their portfolio had been closed and has given advisers a general lack of customer service.

Daniel Williams, financial adviser at Morgan Williams & Co, told FTAdviser the worst problems began when the company re-platformed at the end of last year.

He outlined four separate issues he has had with the company, which included being unable to switch a client’s investment into Fundsmith’s Equity Fund.

It’s absolutely chronicDaniel Williams

He said he engaged in all sorts of “back and forth” with the company, and eventually after logging a complaint and raising that the fund was still appearing on the company’s website as part of its offering, he was told that it was a system error.

“We’ve been told since then that other funds have been closed, even though they haven’t, so it’s not an isolated incident.”

Williams said he raised a complaint with ReAssure on behalf of six clients, but that in subsequent communications, only one of the complaints was referred to by the company.

For the remaining five claims, Williams says they will have to wait another eight weeks to find out what has happened in their portfolios, as the claims have had to be re-submitted.

“So the problem with this is, we've then got other clients that we can't do anything with because even though they've backdated that single fund switch, they still haven't fixed the underlying problem with funds being available or not on their system."

Even when the funds are available on the platform, Williams claimed ReAssure now says if the client has more than 10 funds, or if the policy is in joint names, or if a pension is in drawdown, you cannot switch funds online.

“So you literally can't switch client investments...[as a result of these issues] we can’t provide the level of service we want to for client."

A spokesperson for Phoenix Group said: “ReAssure features are prioritised based on the demands of users.

"Although joint policies and policies in drawdown represent a small percentage of users, we are already due to release the functionality for them to carry out online fund switches over the weekend of April 2 2022.

"There are no issues for customers with over 10 funds switching online."

Other issues

Williams listed three other issues he has faced with the company, the first being an problem with a pension contribution increase.

He claimed he tried to increase a client’s pension contribution by way of salary sacrifice, and ReAssure missed the updated contribution.

He also claimed when a client requested their address was changed on the platform after they moved house, ReAssure instead processed it as a change of agency, and the client’s policies disappeared.

ReAssure then said it will take 10 working days to put Morgan Williams & Co back on the policy.

“This is not just affecting advisers, this is affecting consumers without an adviser to look after them as well.

“It’s absolutely chronic.”

A spokesperson for Phoenix Group said it is in the process of backdating switches on the four clients whose fund switch requests did not go through the first time, and their financial adviser relationship team will be in touch with Williams to discuss the servicing issues.

They added: “We’ve also received a request for compensation from Morgan Williams & Co for the time they’ve spent on these cases. We’ve let them know the information we need to assess this, and will do so promptly once this is received.”

sally.hickey@ft.com