Capital Bond Plus hidden costs!!

Grandma_A

TrickyDicky101 wrote: »

Given the FOS rejection and should the OP wish to avoid incurring legal costs I would think a possible avenue would be one of the financial 'agony aunts' in one of the national newspapers.

I would structure any letter (either to Friends or to newspaper) along the lines of:

1. Product originally taken out & when in brief plus reasons for doing so (again keep it brief)
2. What happened in 1995 (keep it factual)
3. What happened subsequently (ie gradual loss of the investment element)
4. Why you think this unfair/unreasonable (keep this brief and avoid emotional language)
5. How you want this resolved (keep emotion out of this too - I would think something along the lines of the £30k of investment value that existed in 1995 at the point of change (after deduction of the £20k taken out at the time))

Avoid emotion - if present it obscures what the issue is and makes you much easier to dismiss, however cathartic it might be for you to include. Accept that any letter written is effectively an opening play and can be added to later if further detail is required.

Thank you for that "Tricky Dicky" - good advice indeed. We did in fact, after being turned down by the Ombudsman, write to a couple of national newspapers but have heard nothing further. I suspect it is no longer the "topic of the day" because the Telegraph had quite a campaign about this sort of thing a few years ago!

Yes, keeping emotion out is good advice. As you can imagine, my mother-in-law is distraught and frantic with worry and I am exhausted from having now spent over 2 years compiling complaints to go to the two firms in the first instance, then cases to go to the Ombudsman and latterly letters to newspaper "agony aunts". However, I will not let this "colour" what I say!

It just seems fundamentally wrong and complertely unreasonable that a lady of her age should pay out £80K to a life insurance provider, who had never taken the trouble to tell her she was doing so until her investment was about to run out of money!

Our financial advisor tells us that it is fundamental to good insurance practice to tell people what their premiums are costing them. Friends Provident seem to have found a "loophole" enabling them to withhold this information to the apparent satisfaction of the Ombudsman!

Had she known what she was paying, she would have cancelled many years ago and would not now be in this dire position. She didn't want or need life insurance c- she wanted a "nest egg" in case she needed care during her own lifetime!

If no one minds, I will put a draft of my proposed letter to Friends on this forum before I actually send it! Comments would be much appreciated. I am targeting them rather than the advisor because it is the huge profit made by Friends that has cost my mother-in-law so dearly.

We are not chasing "compensation" - we just want her to be restored to the position she should have been in now had she not been treated so badly since 1995.

Again thank you. Regards. Alison

dunstonh

the IFA did indeed let my parents in law down badly in 1995

See the problem is that there is a difference between advice and just comment. If they didnt seek advice then advice would not be given. This appears to be a Friends Provident decision to change a friends provident product to another friends provident product. Unless the adviser factfinded, reviewed and reported saying they recommend this that or the other, its hard to show any advice was given. Especially if they received nothing in fee/commission for it. I wonder if an FP rep was involved. They still had a salesforce in the 90s.

Our financial advisor tells us that it is fundamental to good insurance practice to tell people what their premiums are costing them.

The FOS appear to be saying that took place.

It think legal action would be difficult. The FOS look at law, regulation and fairness. The court look at law and would consider the FOS findings. So, if the FOS have found no wrongdoing, it would be difficult to see where they courts would. Also, there is the potential for a timebar to be applied at is was over 15 years ago.

Another issue is that the trustees would likely be the ones supplied with the information. Not the life assured. So, are the trustees responsible in some way. There could be a case against them.

I'm looking purely at potential negatives/issues. Not through choice but there isnt much in the way of positives to grasp hold of. Especially as much of it requires sight of documentation (which the FOS would have seen).

Grandma_A

dunstonh wrote: »

See the problem is that there is a difference between advice and just comment. If they didnt seek advice then advice would not be given. This appears to be a Friends Provident decision to change a friends provident product to another friends provident product. Unless the adviser factfinded, reviewed and reported saying they recommend this that or the other, its hard to show any advice was given. Especially if they received nothing in fee/commission for it. I wonder if an FP rep was involved. They still had a salesforce in the 90s.



The FOS appear to be saying that took place.

It think legal action would be difficult. The FOS look at law, regulation and fairness. The court look at law and would consider the FOS findings. So, if the FOS have found no wrongdoing, it would be difficult to see where they courts would. Also, there is the potential for a timebar to be applied at is was over 15 years ago.

Another issue is that the trustees would likely be the ones supplied with the information. Not the life assured. So, are the trustees responsible in some way. There could be a case against them.

I'm looking purely at potential negatives/issues. Not through choice but there isnt much in the way of positives to grasp hold of. Especially as much of it requires sight of documentation (which the FOS would have seen).

Thank you for that - I can see where you are coming from but perhaps should clarify a couple of points.

Firstly, on receiving Friends Provident's letter of 17.8.95 advising of the change from the UBA to the CBP, my inlaws IMMEDIATELY wrote to Frizzells, their financial advisor, stating that they "did not understand" and asking Frizzells to "obtain clarification", as well as asking what premiums would cost and whether they would increase with age. They did so because not only were Frizzells their financial advisor, on whom they relied totally in their financial decisions, but also because Frizzells acted as their agent and intermediary in all their dealings with Friends Provident. In other words, my inlaws did not correspond directly with FP, they did so through Frizzells. Furthermore, they had been having discussions with Frizzells for over 2 months in relation to changes to their existing arrangements, including trusteeships for the UBA and their required withdrawal of £20K from their bond under the UBA. Frizzells were well aware of their circumstances and priorities (including my father-in-law's imminent death and their anxiety about financial security for their disabled daughter) and yet stood back and allowed the change to happen without in any way advocating caution. Their apparent lack of concern led my in-laws to believe there was no cause for concern. Surely financial advisors have ethics - the one we use now certainly does!

Part of the problem appears to be that, in 1995, the financial advisor was only interested in trying to persuade my inlaws to invest the £20K lump sum they had withdrawn from their UBA in products that would earn them commission. My inlaws opted instead to buy a reliable car and put the rest in a bank account. This may well have contributed to their advisor's poor response to their request for advice on the change to the UBA, which would earn them no commission in 1995 (but which no doubt generated substantial commission in 1986 when they used the same advisors to set up the Schroders UBA).

You make a good point about the distinction between trustees and the life assured person but, in this instance, they are one and the same - my mother-in-law. From 1995 (on removal of her disabled daughter as beneficiary) she became joint trustee with her solicitor (who was removed as co-trustee two years ago to simplify the current process). Neither of them received any information from FP about the cost of life cover - all they both received was an annual statement of the value of bond units.

I think we would need ask a solicitor to advise on a timebar, since our complaint not only relates to the change that happened in 1995, but also to ongoing shortcomings from FP ever since. In particular, they have never provided any information at all on the cost of life cover or premium increases - only an annual statement of the value of the bond itself. Had they done so, my mother-in-law would have cancelled many years ago. Furthermore, in 2006 they sent her a highly misleading letter, telling her that her bond had received a favourable review and "would never run out of money". No reasonable lay person would dream that she was paying thousands of pounds a year for life cover at the time, and that her bond was about to start shrinking rapidly as a result. Had she know she would have put a stop to things immediately. Did they think it would "never run out of money" because she was in her late eighties and might die before it did?!!

I cannot think of any other financial arrangement whereby large sums of money are taken from a person without the need to tell them what is happening! While there were no doubt "loopholes" in the original documentation that allowed FP to do so, surely the principle of reasonableness should apply here as well.

Furthermore, while the FOS opinion is a guide, it contains a number of statements which we know to be untrue (and have documentary proof). For example, the FOS believes that my mother-in-law was fairly treated because she has withdrawn about £38K since the original £30K investment in 1986, and has therefore not actually "lost" anything. As far as we know this is incorrect - she has withdrawn about £25K in total - presumably someone at FP gave them this information. We shall be asking FP to disclose exactly what withdrawals have taken place.

Believe me, we don't want to go to court if it can be avoided, but feel we have a duty as my mother-in-law's attorneys to challenge the huge financial loss she has suffered (the result of which is that she faces the loss of the "nest egg" she thought would pay for the increasing level of care she now needs, as well as the life payout that she thought would benefit her heirs.

Your comments are highly relevant though and it's good to receive a bit of "devil's advocacy" (as any good barrister would say).

Many thanks and regards. Alison

kingstreet

Alison, could you explain the relationship with Frizzell at the time, in 1995.

Was this a transactional relationship? Did Frizzell "sell" them products and receive a commission, or was there some kind of client servicing agreement in place?

Did Frizzell sell them the Schroder investment in the first place? If so, were Frizzell involved in managing the investment in some way?

TBH it's quite hard to think back to 1986 to try to remember what went on and many of the things we do now weren't done back then.

Grandma_A

kingstreet wrote: »

Alison, could you explain the relationship with Frizzell at the time, in 1995.

Was this a transactional relationship? Did Frizzell "sell" them products and receive a commission, or was there some kind of client servicing agreement in place?

Did Frizzell sell them the Schroder investment in the first place? If so, were Frizzell involved in managing the investment in some way?

TBH it's quite hard to think back to 1986 to try to remember what went on and many of the things we do now weren't done back then.

Thank you "Kingstreet"

My understanding is that the relationship with Frizzells was both transactional and client servicing. My inlaws had always used Frizzells because my father-in-law was a civil servant for many years and, as you no doubt know, Frizzells were the financial advisor of choice for the public sector. (Indeed, in the NHS hospital where I worked, they were invited in each year to speak to pre-retirement groups and advise them on financial planning!).

Yes, we have copy correspondence showing that Frizzells were certainly involved in setting up the Schroder investment in 1986 and undoubtedly received commission for that. However, they were also actively involved in managing the investment on an ongoing basis and acted as intermediary in all dealings between my inlaws and initially Schroders and later Friends Provident.

Frizzells were well aware of my inlaws' particular circumstances, in that they had a daughter with a learning disability who would never be capable of living independently, earning a living or managing her own finances. Frizzells thus not only advised on financial products but liaised with my inlaws and their solicitor in ensuring that their financial planning covered their daughter's future needs in the event of their deaths. That was the reason for recommending the original Schroders plan in 1986, which was attached not only to £20K life cover but also to a discretionary trust in favour of their daughter.

When FP imposed the move to the CBP in 1995, Frizzells were in the process of supporting my inlaws in changing trusteeship arrangements so that my mother-in-law would be the main trustee and beneficiary. (This was because they were changing their wills so that their daughter's discretionary trust would be funded from the value of their house, which had increased very substantially. Also because my father-in-law was terminally ill and they wished to ensure that his widow would be readily able to access the bond if she needed to). We have copies of all the correspondence around this, which shows that Frizzells were acting as intermediary between my inlaws and Friends Provident in making these changes, as well as in the £20K withdrawal from the bond, requested in June 1995.
We also have documentary evidence making it perfectly clear that Frizzells were well aware of my inlaws' circumstances and financial priorities, which were capital growth and income, NOT life cover. The CBP was unsuitable for people planning to take money from their bond and Frizzells should have pointed this out.

My inlaws trusted Frizzells and relied completely on them to ensure that their and their daughter's financial interests were safeguarded. That is why they immediately contacted Frizzells in August 1995 when they received the letter informing them that their UBA would become a CBP in 4 weeks' time! The fact that Frizzells simply forwarded on to Friends Provident my inlaws' request for clarification and then forwarded FP's response back to them without comment misled my inlaws into believing that Frizzells found no cause for concern. This belief was entirely reasonable given the ongoing very satisfactory relationship they had had with Frizzells for many years - they trusted them to protect their best interests.

We have since discovered that, alongside all this, in July 1995 Frizzells had come up with proposals for investing the £20K that my inlaws planned to withdraw from the UBA that would certainly have earned them commission. My inlaws opted not to proceed with these but instead bought a reliable car (with the aim that my mother-in-law would benefit from it after my father-in-law's death) and put the rest into a savings account. It is not clear whether Frizzells instigated their quotations (or whether my inlaws asked for them) but Frizzells were clearly disgruntled about the "wasted" work they had done! I believe that their advisor was then not particularly minded to be helpful towards my inlaws in relation to their Friends Provident issues. She certainly did nothing beyond forwarding on and back my inlaws' request for advice and also did not take any action to ensure that the £20K withdrawal request was lodged with Friends Provident before the CBP implementation date of 15th September. Everything was signed by 7th September but the request was not received by Friends Provident until the 23rd.

There is absolutely no doubt in my mind that Frizzells (and in particular the advisor involved at the time, who left the company long ago) did not show due diligence in supporting my inlaws in 1995. However, I am not sure what recourse is available against them because it was Friends Provident, not Frizzells, who subsequently profited from these shortcomings.

Hope this clarification is helpful and thank you for your interest.

Regards. Alison

Grandma_A

Grandma_A wrote: »

Thank you "Kingstreet"

My understanding is that the relationship with Frizzells was both transactional and client servicing. My inlaws had always used Frizzells because my father-in-law was a civil servant for many years and, as you no doubt know, Frizzells were the financial advisor of choice for the public sector. (Indeed, in the NHS hospital where I worked, they were invited in each year to speak to pre-retirement groups and advise them on financial planning!).

Yes, we have copy correspondence showing that Frizzells were certainly involved in setting up the Schroder investment in 1986 and undoubtedly received commission for that. However, they were also actively involved in managing the investment on an ongoing basis and acted as intermediary in all dealings between my inlaws and initially Schroders and later Friends Provident.

Frizzells were well aware of my inlaws' particular circumstances, in that they had a daughter with a learning disability who would never be capable of living independently, earning a living or managing her own finances. Frizzells thus not only advised on financial products but liaised with my inlaws and their solicitor in ensuring that their financial planning covered their daughter's future needs in the event of their deaths. That was the reason for recommending the original Schroders plan in 1986, which was attached not only to £20K life cover but also to a discretionary trust in favour of their daughter.

When FP imposed the move to the CBP in 1995, Frizzells were in the process of supporting my inlaws in changing trusteeship arrangements so that my mother-in-law would be the main trustee and beneficiary. (This was because they were changing their wills so that their daughter's discretionary trust would be funded from the value of their house, which had increased very substantially. Also because my father-in-law was terminally ill and they wished to ensure that his widow would be readily able to access the bond if she needed to). We have copies of all the correspondence around this, which shows that Frizzells were acting as intermediary between my inlaws and Friends Provident in making these changes, as well as in the £20K withdrawal from the bond, requested in June 1995.
We also have documentary evidence making it perfectly clear that Frizzells were well aware of my inlaws' circumstances and financial priorities, which were capital growth and income, NOT life cover. The CBP was unsuitable for people planning to take money from their bond and Frizzells should have pointed this out.

My inlaws trusted Frizzells and relied completely on them to ensure that their and their daughter's financial interests were safeguarded. That is why they immediately contacted Frizzells in August 1995 when they received the letter informing them that their UBA would become a CBP in 4 weeks' time! The fact that Frizzells simply forwarded on to Friends Provident my inlaws' request for clarification and then forwarded FP's response back to them without comment misled my inlaws into believing that Frizzells found no cause for concern. This belief was entirely reasonable given the ongoing very satisfactory relationship they had had with Frizzells for many years - they trusted them to protect their best interests.

We have since discovered that, alongside all this, in July 1995 Frizzells had come up with proposals for investing the £20K that my inlaws planned to withdraw from the UBA that would certainly have earned them commission. My inlaws opted not to proceed with these but instead bought a reliable car (with the aim that my mother-in-law would benefit from it after my father-in-law's death) and put the rest into a savings account. It is not clear whether Frizzells instigated their quotations (or whether my inlaws asked for them) but Frizzells were clearly disgruntled about the "wasted" work they had done! I believe that their advisor was then not particularly minded to be helpful towards my inlaws in relation to their Friends Provident issues. She certainly did nothing beyond forwarding on and back my inlaws' request for advice and also did not take any action to ensure that the £20K withdrawal request was lodged with Friends Provident before the CBP implementation date of 15th September. Everything was signed by 7th September but the request was not received by Friends Provident until the 23rd.

There is absolutely no doubt in my mind that Frizzells (and in particular the advisor involved at the time, who left the company long ago) did not show due diligence in supporting my inlaws in 1995. However, I am not sure what recourse is available against them because it was Friends Provident, not Frizzells, who subsequently profited from these shortcomings.

Hope this clarification is helpful and thank you for your interest.

Regards. Alison

P.S. I've just remembered that Friends Provident themselves have stated in recent correspondence that Frizzells were the "registered agency" for the policy in 1995 and for many years thereafter!! As such, Frizzells
clearly had a duty to advise on changes, not just pass requests for clarification on to FP!

dunstonh

P.S. I've just remembered that Friends Provident themselves have stated in recent correspondence that Frizzells were the "registered agency" for the policy in 1995 and for many years thereafter!! As such, Frizzells
clearly had a duty to advise on changes, not just pass requests for clarification on to FP!

That infers no duty to advise on changes. If they were transactional advisers then they have no duty other than to pass information on. The agency is recorded on all policies with the original agent unless you change it to another agent at a later date.

Yes, we have copy correspondence showing that Frizzells were certainly involved in setting up the Schroder investment in 1986 and undoubtedly received commission for that. However, they were also actively involved in managing the investment on an ongoing basis and acted as intermediary in all dealings between my inlaws and initially Schroders and later Friends Provident.

So, were Frizzells making changes to the investments and notifying each year of those changes? Or was it Schroders making changes or did no changes actually occur?

The fact that Frizzells simply forwarded on to Friends Provident my inlaws' request for clarification and then forwarded FP's response back to them without comment misled my inlaws into believing that Frizzells found no cause for concern.

The fact they simply forwarded on the letter suggests it was not a servicing arrangement but transactional. It also verifies that no advice was given.

Frizzells were well aware of my inlaws' particular circumstances

Frizzells are a big company with many staff. Whilst records would be held for advice purposes, there would be no reason for a staff member to look at old records for receiving a letter asking about a policy that Frizzells themselves were not setting up. That staff member could know nothing about the circumstances. That is always an issue when dealing with big companies. A transactional relationship would just see the firm send the letter on.

Servicing is provided where it is being paid for annually/monthly. Can you show this servicing payment existed? If it didnt, then no servicing is likely to have existed beyond periodic courtesy calls (which in the case of transactional advisers tended to be attempts to obtain more business). In 1986 servicing was unheard of. It was all transactional but relationships tended to be closer as a matter of course. In 1995, formal servicing was in its infancy.

There is absolutely no doubt in my mind that Frizzells (and in particular the advisor involved at the time, who left the company long ago) did not show due diligence in supporting my inlaws in 1995. However, I am not sure what recourse is available against them because it was Friends Provident, not Frizzells, who subsequently profited from these shortcomings.

Yet, what you say suggests no failing by Frizzells. Maybe this is why the FOS rejected that part. You are expecting a relationship to have existed that does not appear to have been the situation. Now, if you can show that a servicing fee was being paid each year and documentation showing ongoing advice was given then you have a stronger case.

My gut feeling is that it was transactional. If so, Frizzells, who were paid in 1986 for the sale of the policy, are unlikely to provide free annual servicing thereafter. So, when a letter turns up in 1995 from someone that they havent earned from in nearly a decade and there doesnt appear to be any potential to earn from and they are not paying for servicing then the barest minimum is likely to be done. i.e. forward the letter on to FP.

Grandma_A

dunstonh wrote: »

That infers no duty to advise on changes. If they were transactional advisers then they have no duty other than to pass information on. The agency is recorded on all policies with the original agent unless you change it to another agent at a later date.



So, were Frizzells making changes to the investments and notifying each year of those changes? Or was it Schroders making changes or did no changes actually occur?



The fact they simply forwarded on the letter suggests it was not a servicing arrangement but transactional. It also verifies that no advice was given.



Frizzells are a big company with many staff. Whilst records would be held for advice purposes, there would be no reason for a staff member to look at old records for receiving a letter asking about a policy that Frizzells themselves were not setting up. That staff member could know nothing about the circumstances. That is always an issue when dealing with big companies. A transactional relationship would just see the firm send the letter on.

Servicing is provided where it is being paid for annually/monthly. Can you show this servicing payment existed? If it didnt, then no servicing is likely to have existed beyond periodic courtesy calls (which in the case of transactional advisers tended to be attempts to obtain more business). In 1986 servicing was unheard of. It was all transactional but relationships tended to be closer as a matter of course. In 1995, formal servicing was in its infancy.



Yet, what you say suggests no failing by Frizzells. Maybe this is why the FOS rejected that part. You are expecting a relationship to have existed that does not appear to have been the situation. Now, if you can show that a servicing fee was being paid each year and documentation showing ongoing advice was given then you have a stronger case.

My gut feeling is that it was transactional. If so, Frizzells, who were paid in 1986 for the sale of the policy, are unlikely to provide free annual servicing thereafter. So, when a letter turns up in 1995 from someone that they havent earned from in nearly a decade and there doesnt appear to be any potential to earn from and they are not paying for servicing then the barest minimum is likely to be done. i.e. forward the letter on to FP.

Hi DunstonH, Thank you for clarifying all of that. In fact there had been a great deal of contact and correspondence (which I have copies of) between Frizzells and my inlaws when the letter turned up in 1995. They had for many years worked with one advisor there, who "looked after" them and who was intimately acquainted with their particular circumstances and needs and worked closely with them and their solicitor, particularly in relation to the rather complicated financial and legal arrangements they needed to make to protect the future financial security of their daughter, who had Down's syndrome. I have copies of correspondence between them and this advisor both earlier and later in 1995 that shows that they were on first name terms with her. She visited their home from time to time and they had actually had a meeting with her in June 1995, to discuss changes of trusteeship and the £20K withdrawal they required. Fortunately my father-in-law kept meticulous records and minuted all such meetings as well as keeping copies of all correspondence (he typed his). She was thus well aware of their priorities when the letter from FP arrived in August 1995 and, given the direct bearing the £20K withdrawal would have on the new arrangement, she certainly had a duty to draw their attention to this and to liaise with FP to ensure that the withdrawal happened BEFORE the their UBA changed to CBP on September 15. I don't know whether money changed hands but she was certainly spending a lot of time in discussions with them for at least 3 months from June 1995. She had also advised them and obtained illustrations from other companies in relation to investing their requested £20K withdrawal. They had regular contact with her over the years in relation to all their financial dealings (and I have copies of all the relevant correspondence). They also had various telephone discussions with her about FP's proposal, as I know because it was their main topic of conversation at that time - they were very anxious about it and were relying heavily on her advice. They had a very high opinion of her expertise and trusted her implicitly. However, it now appears that her interest declined on learning that they did not plan to follow her recommendations for investing the £20K (but instead put it in the bank and bought a new car!).

So, in summary, there is plenty of documentation regarding ongoing advice. However, because they were at the time dealing with both their solicitor (who was receiving a fee of course) and with their financial advisor, they may well have confused the type of role they had. They were after all pensioners who were very worried about their disabled daughter's future, especially as my father in law was terminally ill!

All of this is helping clarify what I write to FP so your input is appreciated.
Again thanks and regards. Alison.

dunstonh

I have copies of correspondence between them and this advisor both earlier and later in 1995 that shows that they were on first name terms with her. She visited their home from time to time and they had actually had a meeting with her in June 1995, to discuss changes of trusteeship and the £20K withdrawal they required. Fortunately my father-in-law kept meticulous records and minuted all such meetings as well as keeping copies of all correspondence (he typed his).

Transactional advisers frequently revisit or contact clients periodically. However, it does not mean a servicing arrangement is in place. They are effectively doing it to keep an eye out for new business. Indeed, the sales forces of old ran on that basis for decades. The same agents may have turned up every time but it doesnt mean a servicing relationship exists. They were just keeping in touch to see if they could sell something new.

I operate mostly on a servicing basis but I have transactional clients as well. If I get asked by transactional clients to do some bits of work I will often do so as long as its quick and is nothing that carries a liability for advice. Some of those clients may well refer to me as their financial adviser but in reality I am not. I am an adviser they used in the past who knows their situation and may have spoken to them periodically thereafter but unless they ask me to provide them advice in future or move onto a servicing contract, then I am not their financial adviser. Some of those clients have done multiple bits of business over the decades but each time it was transactional.

I don't know whether money changed hands but she was certainly spending a lot of time in discussions with them for at least 3 months from June 1995.

Knowing whether money changed hands is important. If it did, it would indicate a commercial agreement was in place to provide something. However, if no payment was made then the company was probably just providing contact with the hope there could be some business to follow. Advisers for big companies were frequently targeted to book appointments as one of their requirements as well as being in a certain level of business. A sales agent looking to sell a product and spend time building up to do so is not advice. It does appear their agent was looking to get a £20k investment out of it from what you say.

However, it now appears that her interest declined on learning that they did not plan to follow her recommendations for investing the £20K (but instead put it in the bank and bought a new car!).

Which again seems typical for a transactional agent. Not a servicing one. A servicing one is paid irrespective of business generated. Once she realised she wasnt going to be paid (and considering the previous business was nearly a decade old and paid for then) there is going to be nothing in it for her goring forward.

So, in summary, there is plenty of documentation regarding ongoing advice.

I disagree. What you are seeing as a formal ongoing advice service is not the case. It is just normal activity from agents hoping to get a bit more business and deal on a reactive basis and not a pro-active basis. Now, if you could produce the agreement that states how much the ongoing servicing costs and show it was paid, then that would be a different matter. All advisers typically do the odd bit of advice on transactional cases without getting paid. However, they are not likely to take on liability for a brand new product without being paid. in 95, that would have required a factfind, research and analysis and a reason why letter. If you have those, then you have them for advice. If you dont have those and given your comments about your father in law being meticulous on his records, then advice was not given.

Everything you are saying points to a transactional relationship where the agent was paid only on sale of a new product but may have done the odd bit of work in the interim to keep a relationship open in case there was future business. This is almost certainly why the FOS found no advice was given by Frizzells. They were not employed to do so and did not do it.

FP made changes to an FP product without advice being given by a third party. So, complaints about advice that never happened are likely to fail. This then comes back to whether FP changed the contract correctly.

Grandma_A

dunstonh wrote: »

Transactional advisers frequently revisit or contact clients periodically. However, it does not mean a servicing arrangement is in place. They are effectively doing it to keep an eye out for new business. Indeed, the sales forces of old ran on that basis for decades. The same agents may have turned up every time but it doesnt mean a servicing relationship exists. They were just keeping in touch to see if they could sell something new.

I operate mostly on a servicing basis but I have transactional clients as well. If I get asked by transactional clients to do some bits of work I will often do so as long as its quick and is nothing that carries a liability for advice. Some of those clients may well refer to me as their financial adviser but in reality I am not. I am an adviser they used in the past who knows their situation and may have spoken to them periodically thereafter but unless they ask me to provide them advice in future or move onto a servicing contract, then I am not their financial adviser. Some of those clients have done multiple bits of business over the decades but each time it was transactional.



Knowing whether money changed hands is important. If it did, it would indicate a commercial agreement was in place to provide something. However, if no payment was made then the company was probably just providing contact with the hope there could be some business to follow. Advisers for big companies were frequently targeted to book appointments as one of their requirements as well as being in a certain level of business. A sales agent looking to sell a product and spend time building up to do so is not advice. It does appear their agent was looking to get a £20k investment out of it from what you say.



Which again seems typical for a transactional agent. Not a servicing one. A servicing one is paid irrespective of business generated. Once she realised she wasnt going to be paid (and considering the previous business was nearly a decade old and paid for then) there is going to be nothing in it for her goring forward.



I disagree. What you are seeing as a formal ongoing advice service is not the case. It is just normal activity from agents hoping to get a bit more business and deal on a reactive basis and not a pro-active basis. Now, if you could produce the agreement that states how much the ongoing servicing costs and show it was paid, then that would be a different matter. All advisers typically do the odd bit of advice on transactional cases without getting paid. However, they are not likely to take on liability for a brand new product without being paid. in 95, that would have required a factfind, research and analysis and a reason why letter. If you have those, then you have them for advice. If you dont have those and given your comments about your father in law being meticulous on his records, then advice was not given.

Everything you are saying points to a transactional relationship where the agent was paid only on sale of a new product but may have done the odd bit of work in the interim to keep a relationship open in case there was future business. This is almost certainly why the FOS found no advice was given by Frizzells. They were not employed to do so and did not do it.

FP made changes to an FP product without advice being given by a third party. So, complaints about advice that never happened are likely to fail. This then comes back to whether FP changed the contract correctly.

Thank you so much for clarifying all that, which I am sure is strictly speaking correct and highlights the confusion that exists in the minds of many regarding the role of the financial advisor (which new regulations seem to have somewhat clarified and certainly makes paying the financial advisor well worthwhile). On the basis of what you say, it seems unsurprising that the complaint regarding the advisor was not upheld. However, many good advisors (as I am sure you do) "go the extra mile" for clients, particularly where (as in the case of my inlaws) the advisor regularly profits from those clients via commission. My mother-in-law now receives advice from our own advisor, who is excellent and is also a good man who wouldn't stand by and let someone accept an unsuitable product or unsuitable change to an existing product without warning them. He knows, of course, that by "going the extra mile" he is storing up goodwill that will hopefully benefit him in terms of recommendations and future business. So yes, thanks to your helpful advice, I now understand that my inlaws' financial advisor probably technically didn't break any rules. However, we remain less than impressed that she stood back and allowed a change to happen that was clearly unsuitable, especially given my inlaws' sad circumstances. Furthermore, we are continuing to investigate the apparent delay in dealing with the request to withdraw £20K from their bond - a delay which has cost my mother in law dearly because it resulted in her starting to pay for an extra £20K of life cover immediately after the change happened! FP have confirmed Frizzells were the official agent for the policy and continued to be until very recently - surely they had a duty to deal with withdrawals, changes, etc. in a timely manner. Again thank you - all of this is helpful. Regards, Alison