Woolwich has been accused of attempting to poach clients from financial advisers after an IFA discovered the bank is sending letters to consumers inviting them to review their financial arrangements without his knowledge.
Paresh Shah, intermediary at Financial Solutions 2000 in Kent, says he had been informed by some of his clients they have been invited to attend Woolwich branches to discuss their current mortgage requirements.
At the same time, however, he was not informed by Woolwich they would receive this invitation and the situation has been made all the more worse as one of the standardised letters sent out to his clients included inaccuracies about the client's circumstances.
Shah says one invitation has particularly angered his client as the letter suggested the term of their fixed-rate term was nearing its end and the mortgage would then move to a standard variable rate, when they were in fact already on an offset mortgage.
A spokesperson for Woolwich says the firm is within its rights to invite consumers to review their circumstances, even in cases where the client is still advised by a financial intermediary firm, as the banking group believes it is acting in the best interests of the client.
“We don’t know if the relationship between the client and the intermediary is still ongoing and we have a duty to our customers. We do not need to inform the broker because we do not know if the customer is still being advised by them,” she says.
“At the same time, where the client continues to do business with us and they have an introducer, we will also pay a retention fee to the broker.”
Circumstances behind the sending of letters, however, appear to have thrown up some confusion within Woolwich itself as feedback received by Shah from the Woolwich intermediary division suggests there were not aware of the action taken by branch offices, and it conflicts with the relationship it is seeking to maintain with intermediaries where clients are already being advised.
Whereas the Woolwich appears to be arguing it is treating customers fairly by acting in the interests of the client - because it does not know if relations between adviser and client are ongoing - Shah strongly disagrees and says it is tantamount to poaching.
“I don’t see this as treating customers fairly at all,” says Shah.
“We review our clients before the terms mature or expire, so we have already spoken to them about their needs. I am furious the client has been given the wrong information. They are a loyal client of ours and it is not the first time Woolwich has done this.
He continues: “From a compliance point of view, we have to make sure recommendations are appropriate, whether or not the client stays with the Woolwich. But the client does not know there is any difference between the relationship we have with them and the advice they would be given if they attend these reviews because they assume we are kept in the loop.”
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Julie Henderson on 020 7968 4571 or email [email protected].IFAonline
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