Birmingham-based adviser Richard Bishop has stopped taking on clients who hold old defined benefit pensions with Prudential after finding his firm could not meet its own service levels due to a lack of communication from the provider.
The managing director of PFEP Wealth Management took this stance three months ago, after finding it could take up to four months on average for the company to sign paperwork, and up to six months on average for a client to receive income from their pension after asking him for help.
The clients Bishop has struggled to service are those with old defined benefit pension schemes which have been handed over to Prudential by trustees.
“I spent 45 minutes on the phone last week chasing a letter of authority and got no answer,” Bishop told FTAdviser.
“You can’t speak to anybody at Pru and no-one replies to your emails. We can’t manage our level of service through Pru. Taking on these clients only creates a big problem for us.
“What can we do? Do we increase our fees for these clients? It's difficult to make it fair for the client. But we also need to keep our business complaints free.”
Bishop said the FCA should consider viewing advisers as clients of the provider in order to hold providers more to account when they fail to communicate with intermediaries.
Client waits over three years for pension income
One of Bishop’s clients has been waiting more than three years to receive income from a guaranteed minimum pension. Prudential outsources GMPs to L&G, which Bishop said only adds more bureaucracy to the process.
“Clients are desperate for annuities at the minute,” said Bishop. “Prices have been increasing with utility bills. Clients need their money.”
He helped his client make a formal complaint to the Pensions Ombudsman against Prudential. The final decision saw Prudential pay the client £5,000 in compensation, but the client was still left with no sign of their pension income - the original money they were chasing.
Bishop wrote to the Ombudsman again, but was redirected to Prudential. It said the provider would need to review the case before it goes to the Ombudsman for a second time.
“The client has been living on their state pension, it's heart-breaking,” said Bishop.
“Prudential is very far from where the FCA needs firms to be on the consumer duty.
“These providers have full control over these clients’ annuity income and are falling down all the time.”
Many of Bishop’s clients are based in working class areas such as Halesowen and Dudley. “This has a huge effect on the client. It’s income they really need.”
A spokesperson at M&G, owner of UK Prudential, said: “We apologise that Mr Bishop and his client received service below the high levels we strive for.
“We have spoken to the adviser and have agreed next steps to resolve the issue for his client, and will consider appropriate compensation for the inconvenience experienced to date.”
