Poor service from life and pensions (L&P) product providers is costing IFAs as much as £8,000 each in lost revenue every year, totalling £208m within the industry, new research indicates.
A survey conducted among 200 IFAs by insurance technology specialists FIS Softwarefound one in five (21%) firms rated the service they receive from L&P providers as "appalling", while 62% found the service to have gotten worse over a twelve-month period.
A major complaint, marked by a third of IFAs questioned, said they expected to be left in the lurch for a full working week or more before obtaining information from an L&P provider.
Greg Heath, managing director, Derbyshire Booth Financial Management urged L&P providers to improve service, to enable IFAs to compete post-depolarisation.
“The alternative is that poor service and dwindling commission rates will drive IFAs to focus their efforts on the more affluent groups. This may leave the majority of people with less choice over where to buy financial products and advice,” he says.
William Watling, business development director, at FIS Software says as providers' regulatory and compliance burdens pile up, they lack the bandwidth to combat the disparate legacy IT systems, which he believe are root cause of the problem.
He adds: "Instead, many providers are still opting for a series of tactical 'bolt on' IT solutions that may address their current needs, but over the long-term might only end up adding to their systems spaghetti and customer servicing problems."
‘Important to have an anchor’
Lack of innovation for solutions
Some 2,000 consumers affected
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