We have had an interesting interaction with a very old fashioned provider this week. Our client had discovered that they had a couple of Child Trust Funds with this provider but were struggling to get any information. 

The fact that they had moved house, and the two bits of paper we could see had different addresses, may have had a bearing on that.

No problem, let’s get Letters Of Authority, and we can see what is going on, and make sure the money does not actually get lost in some admin rabbit hole. Imagine our surprise to have an email back to us – and this is a direct quote – that says:

“Please be advised that it is our Company Policy not to provide information to any third party even if a letter of authority accompanies the request.”

In translation – “We will refuse to honour client instructions even if that results in harm to our clients.”

Now let’s just forget about Consumer Duty for a minute. What sort of arrogance does it take to tell clients not to bother giving written instructions, as we are much too self-important to bother to comply?

And just in case the word ‘Arrogance’ seems a little harsh, the next paragraph was as follows:

"Please note; There is no availability to transfer agency or servicing rights on any (name withheld to protect the guilty) policy as we do not use the services of Independent Financial Advisers."

And it’s in bold here because they put it in bold in their email.

How astonishing is it that they think that IFAs somehow exist to provide services to legacy providers, rather than looking after the interests of those that actually pay us – our clients? So arrogant is a good word.

I then went and looked at their reputation online. Which is mixed. What was interesting was that their Trust Pilot reviews are full of praise for the ‘Free Advice’ that they are giving their clients.

So my questions are: 

1. How did this – and other 19th Century firms – obtain exemption from applying the Law of Agency? 

2. How did they obtain an exemption to FCA rules in disclosing costs and fees? 

3. Is it only these old providers that can claim exemption – or is this available to anyone?

Now all of this is a bit tongue in cheek, and I do get that they are just desperately defending their declining role in the market. Horse carriage makers probably did the same when cars were invented.

But for those of us of a certain age, it brings back memories of the old ‘Industrial Branch’ firms of the 1980s and 1990s. Their culture and processes could not cope with increased consumer sophistication and just withered in the face of regulation.

Seeing it again was a real blast from the past – like seeing a Morris Marina on the roads….

It goes to show how far we have come and how much better for consumers 99.9% of our sector is now than before. We have experienced true Darwinian evolution, in that only the ‘fittest’ (most adaptable) survived, and now deliver – with a few exceptions – far superior service to consumers at much lower costs.

Long may the trend continue.

Phil Billingham FPFS CFP Chartered Financial Planner, Chartered Fellow (Financial Planning) is a Financial Planner and a director of Perceptive Planning, a Chartered Financial Planning firm based in London and Essex. https://www.perceptiveplanning.co.uk/

Biography: Phil joined the profession in 1982 and is a past director of the Institute of Financial Planning (IFP) which merged with the CISI in 2015. He is a past member of the Financial Planning Standards Board (FPSB) Regulatory Advisory Panel. He is a specialist in helping advisers cope with regulatory change and has worked with advisers, planners and regulators in the UK, Europe, USA, Canada, South Africa and Australia. He writes this column most months for Financial Planning Today.