Scottish Widows is being accused of threatening to shut down IFA agencies as the insurance giant seeks to address falling business levels.
A number of IFAs have contacted IFAonline to say the firm has either been warned by the insurer its agency will be closed, or had it shut down without notice.
Advisers are unable to place business with some life offices if no agency arrangement is in place, sparking concerns they are therefore unable to brand themselves 'whole of market'.
In one case, an IFA says Scottish Widows informed affected clients of its decision, but not him, prompting some to inquire whether he was closing down.
Advisers say the "petty" and "aggressive" tactics prove traditional life offices are beginning to creak under the pressure of the growing wrap space.
Traditional life offices have suffered the ignominy of posting poor results in the last few weeks as wrap platform providers were boasting of breaking into profit.
Life and pensions new business at Lloyds Banking Group, which incorporates Scottish Widows and Clerical Medical, fell 22% in Q1 this year compared with the first three months of 2008.
Scottish Widows says it regularly reviews its IFA agencies "as a matter of course", adding if it decides to shut one down "the adviser is fully aware of, and understands the reasons behind" its decision.
One IFA, who asked not to be named, says Scottish Widows wrote to 150 of his clients to inform them it was shutting down its agency.
"I couldn't believe Scottish Widows didn't write to me," he says. "It came as something of a shock.
"I was told it was because of a lack of new business and persistency. Some of my clients thought I had gone out of business. Afterwards I realised any IFA business could be killed stone dead by a provider deciding to end its agency agreement."
Another adviser, who again asked not to be identified, claims Scottish Widows threatened to shut his agency because he had "pulled millions" out of the insurer in recent years.
"It is a disgraceful situation," he says. "It has never happened to me before in 25 years as an adviser. How on earth can I call myself whole of market now?"
Carl Melvin, of Affluent Financial Planning, says threatening to shut agencies with advisers is a mistake.
"Watch this space in the next five years for massive downsizing in traditional life companies as they realise if you kick the dog enough times, he will eventually bite."
Criticism of Scottish Widows comes hot on the heels of weeks of bad news for insurers.
Life office giants, including Friends Provident, Aviva and Standard Life, posted poor results while The Hartford announced it was dropping out of the UK market altogether.
Elsewhere, Lloyds Banking Group said it was culling the Clerical Medical brand in favour of Scottish Widows.
But wraps fared better. Seven Investment Management (7IM) toasted being back in the black earlier this month while Cofunds broke into profit for the first time.
David Ferguson, Nucleus chief executive, says: "Traditional life companies have no future at all. In the end we will see pretty much all retail money transacted on a platform. These are traditional bullying tactics by life offices, trying to put arms up backs to generate some business."
A spokesperson for Scottish Widows says: "Like many other life and pension providers, we regularly review our IFA agencies as a matter of course. Our aim is to write sustainable business and look after the interests of our customers.
"Where an account is being reviewed it is done with direct consultation with the IFA over a period of several months, including face to face meetings along with regular, supportive correspondence. In the majority of cases this works very well. In the unusual event, where we have to end a relationship, the IFA concerned is fully aware and understand the reasons behind our decision."
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