As a well established IFA, it can be important to maintain good connections with life office consultants for future and ongoing business.
However, I received a telephone call this week from a life office consultant with whom we do significant business, although I will not name the life office, other to say that their parent group is large, and the life office has for many years tried to attract the professions.
The life consultant had received a communication from his management team to say they are very pleased with the level of business that we are providing to them for investments.
This organisation currently does not offer a drawdown arrangement, but does offer personal pension plans and stakeholder plans, and it is in this area where they have their 'gripe'. He went on to inform me that I was not placing enough personal pension business with them and added the fact they are not keen on me recommending their stakeholder offering.
I understand that these people have their targets and need to be profitable. But the line issued was that if I was unable to increase the level of personal pension plan business the company would be forced to reduce our commission offering and in addition, move our pension enquiries to a telephone sales team rather than direct contact.
I was amazed!
This raises the question as to who is providing the advice and who is regulating the management team which can hand out such 'threats'. As you would expect, I made it perfectly clear that no such 'process' would be welcome in our company and that if this type of situation was to raise it's head again I would be forced to make other arrangements, both for our pension business and for our investment business.
The consultant concerned got a very clear message that this type of comment was unacceptable.
I am aware that you get more facilities - such as helplines and literature - the more business volume a company gives, but for the life office to tell you what they want you to recommend is a step too far!
It does ask questions about the serious undertones of the message which was received. To be truly independent we must be impartial on who and what we recommend. So if you get a phone call from the life office concerned saying the same thing, then please add to this blog, as I would like to build momentum against such a strategy.
Have Your Say: Roddy Kohn, from KohnCougar, says:
“It’s all well and good having a rant at life offices and their business demands but tragically this piece does little to inspire the younger generation of IFA’s and almost worse reinforces the prejudice - already well entrenched in the minds of the FSA, journalists and the media at large - that this is as much a rant about commissions as anything.”
“That’s more than regrettable. As the Surrey Cynic makes a very valid point about the nature of many life offices and their arrogance in believing they have a right to ask IFA’s for business commitments.”
“For those who may have forgotten, a thing called the menu came into effect reminding all and sundry that to claim the coveted title of INDEPENDENT Advisor a fee option must be offered to consumers.”
“Any demands upon this sector of the industry must be a clear breach of the FSA rules tantamount to black mail. However failing to stand up and be counted is a recipe for further such unreasonable demands and in the fullness of time simply serves to reinforce the Surrey Cynic’s reliance upon product providers for his identity.”
“If this is not true why then does he deny the rest of us (and The FSA enforcement team) the names of the culprits? What could he possibly fear? I’ll leave other readers to answer that one, but none of this will serve to remind younger IFA’s of the need to tell life offices where to put their business targets!”
If you would like to comment on this article or submit your own blog for publication, contact [email protected] or post your thoughts through the ‘Have Your Say’ box at the top-right of the page.IFAonline
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