Research presented by FIS Software yesterday on the administration of life and pensions companies has generated feedback from the financial services sector.
The following commentary from Barny Perraton, of Minter van de Hauwe Nydermarren, questions why more advisers do not regard the level of service at some companies as appalling.
Congratulations to FIS Software for reinforcing what everyone already knew, although one has to be a little surprised that only 21% of respondents rated life and pension companies as “appalling”.
The death knell has been sounding for years now for the L&P companies but too many IFAs don’t want to listen. They are still mesmerised by the glossy marketing propaganda, “free” technical helplines, help with suitability letters and the putative promise that things will get better. L&P firms can only peddle their obsolete products as long as IFAs sell them.
Realising that only the dopiest of intermediaries will continue to purchase such “has-been” products as with-profits (surely an oxymoron?), L&P companies have at least been clever enough to rearrange the deck chairs on the Titanic and drive through depolarisation, as this will enable them to secure and maintain premium income by seducing a new audience - tied and multi-tied.
Until the late 1990s, L&P companies had the monopoly on products, e.g. if you wanted to save for your retirement, you did so via an insured PPP. Thankfully, the product & legislative arena has become more fragmented and competitive. An insured PPP vs a pure SIPP or a VCT? No contest.
L&P companies have become the Betamax of the financial services market place. However, for those IFAs who intend to remain independent post-May, and cannot break their addiction to using L&P companies (patches and gum aren’t strong enough), there is some solace.
Invest now in decent CRM software which includes time costing. Then utilise it to record all the otiose phone calls, emails and faxes with L&P companies, prepare a detailed fee statement and bill the L&P company for every client every time they get it wrong.
If you are going to “lose” £8,000pa to the dysfunctional and ineffective L&P companies, at least be able to recover it from them. Hit them in the only place that they care about - their pockets.
Click here to view yesterday's story: Pension IFAs lose £8k a year thru poor provider serviceIFAonline
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