Standard Life discussed with the FSA beforehand its new communications policy, which asks customers to sign declaration forms acknowledging understanding of transfers and transfer value requests.
Peter Timberlake, head of media relations at Standard Life Assurance, has confirmed the discussions as part of an ongoing response by the provider to the issue of customer churn.
The churn challenge was highlighted by Aifa, ahead of today’s introduction of the provider’s new policy - outlined in a letter signed by SLA chief execitive Trevor Matthews.
The provider's policy of seeking customer signitures via direct contact will apply to applications for transfers or transfer valuations for life and pensions policies, as IFAonline first reported yesterday.
Timberlake says Standard Life stands by its view the new policy is required because of concerns over treating customers fairly and ensuring improved protection for provider and adviser alike against possible future complaints.
The wider challenge to the industry, however, is in finding answers to the churn question whether the pool of clients assets is consolidating into a handful of firms, or whether the same money being switched between providers, he adds.
Timberlake suggested there is a strong possibility the initial research done by Standard Life as the basis for its policy change – suggesting consumers have been unaware of a “growth guarantee” or of “other options” before transferring (although these points have been contested) - will be followed up by further research to gauge consumer reaction to receiving the guides and declaration form. This would likely form part of the provider’s ongoing reaction to and review of churn issues.
He reiterates the point made in the letter stating the action is not intended by the provider as a way to cut out advisers.
Chris Rule, director at Surrey-based Kingfisher Financial Consultancy, is one of those who have reacted to yesterday's story.
"We are very concerned at the way Standard Life are treating both customers and IFAs," he says.
"They have over the last two years juggled with terminal bonuses on both endowments and pensions, which we felt were more to do with privatisation issues rather than adjustments to market conditions."
Bob Perry at CWP Financial Services, asks if it is a matter of some sort of 'advice' being presented to the customer, and whether Standard Life is prepared to undertake factfinds and to explain today's with-profits fund is a very different beast to the one in place some six years ago.
"Will it fully explain that due to regulatory pressures a far greater element of the total return on a with-profit contract is likely to be dependent upon terminal bonuses? Life offices now have to allocate reserves against liabilities, therefore they are unlikely to allocate as high a level of annual bonus as was the case in the 80s and 90s."
Responses received since our initial story on Standard Life’s new policy ran yesterday suggest advisers are juggling a number of changes instituted by the provider in terms of the way it handles with-profits policies. For your say in the matter, please visit our discussion boards to share your experiences.
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 Jonathan Boyd on 020 7484 9769 or email [email protected].IFAonline
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