Appalling service from Clerical medical!

TUVOK

A 'heads up' to any one contemplating having business with Clerical medical or a warning to existing customers.

Contacted them at the start of this month regarding taking a 'chargeable event' payment from a distribution bond I hold with them.
I have done this for quite a few years with not exactly superb service but acceptable, usually all done in about 2 weeks.

C/Medical this time asked for confidential information to be sent in an email to them in order for the payment to be arranged.
I was not too happy about this, but did it.
I had no confirmation of receipt for the email I sent, so tried to phone them, gave up several times after holding for well over a hour!
I then emailed them several times, no reply again, I decided this morning to wait on a telephone call to them, after about an hour spoke to person who informed me that my payment would be arrange in anything from 60 to 80 days.
I asked to speak to supervisor/manager etc, that was not possible.
I asking to register a complaint with C/Medical, was told write to them and it would be answered within 8 weeks.

I will write stating my complaint, but it would seem that I will be waiting a very long time for my payment.
At no time was it possible to speak to a person in a higher position than the operator I spoke too.

All in all, most probably the worst service I have experienced bar none in many business dealings, so be aware of Clerical medical!

Malthusian

It might be worth reviewing whether the bond is still the best home for your money. Insurance bonds are no longer as tax efficient as they once were.

Clerical Medical's rubbish customer service just gives you even more of a reason to review whether continuing with them is the best option.

I am not saying you should surrender it - taxation of insurance bonds is complicated and full of traps.

dunstonh

A 'heads up' to any one contemplating having business with Clerical medical or a warning to existing customers.

Clerical Medical has been long closed down for new business.   They were once a very good company but now part of Scottish Widows and admin is handled by them.

TUVOK

Thanks for all replies as it had been in my mind for some time to investigate whether the Distribution bond is still a relevant investment in the current age? but other time constraints had taken over.

I have had the bond since 2001 and it's just been sitting there ticking over.
It was invested as part of a early retirement package by a IFA, it was A £20K investment, it's now standing at about £28K, I have taken for many years a 'chargeable event' with drawl which is usually about the £1K mark.
So unless I delve back to add up the with drawl's it's a bit difficult to gauge the % profit the fund has made?

If this change of time it takes to obtain the 'chargeable event' payment is going to become the norm? it makes it a bit of a lottery as the market value could change dramatically in the 3 months C/Medical are now quoting.
In past years, a few weeks made little change.

Any one with info on what pro's/ con's I would have in closing this bond? I would be most grateful for it.

dunstonh

It was invested as part of a early retirement package by a IFA, it was A £20K investment, it's now standing at about £28K,

Distribution funds had a number of decades of good general performance but the last decade has seen them go right off the boil.

I used the CM investment bond a fair bit in the early 2000s as it was coming out with good value for many years (providers would take their turns as to who was best but CM were there more often than not).   However, with annual bed & ISA (from the investment bond) and the change in dividend tax favouring GIA (unwrapped UT/OEICs) over insured funds. I have been emptying the bonds annually by controlling chargeable gains where possible.    It isn't always possible.   But for most it is.

If this change of time it takes to obtain the 'chargeable event' payment is going to become the norm?

Sometimes the insurers can be sluggish on payments but the usually give the unit price as the next available after they receive the instruction.  Even if they do not actually do it within that timescale.   So, you may wish to check if they will honour the unit price had it been done after receipt and not delayed.  Check the unit price before you ask that though in case unit prices have risen!

Malthusian

TUVOK said:

So unless I delve back to add up the with drawl's it's a bit difficult to gauge the % profit the fund has made?

The % profit it's made is irrelevant, at least for tax purposes. Clerical Medical should be able to supply the total withdrawals made to date which you can then use to calculate the chargeable gain that would apply on sale. Unless the bond has had a very complicated history of additions and withdrawals, that part should be a fairly simple calculation (current value + total withdrawals - amount invested = chargeable gain). The rest is the bit that's complicated.

Any one with info on what pro's/ con's I would have in closing this bond? I would be most grateful for it.

On a full sale, the chargeable gain will be added to your other income for the tax year. If this brings your income into the higher rate tax band there may be a tax charge, although top slicing relief (where you divide the gain by the number of full years you have held the bond) may avoid or reduce this. There are also other tax traps such as if the total gain plus your other income goes above £100,000, or the gain pushes other taxables (e.g. capital gains) into a higher tax bracket. Top slicing relief does not apply here. This is why I said it's complicated.

But paying a financial adviser to calculate the potential tax liability and work out whether it can be reduced (if there is one) may be disproportionate for a bond of £28k.

Rookie13

Has anyone actually been able to contact these people. Going to the moon would seemingly be a piece of cake in comparison.

TUVOK

I thought that I would give the forum an update on my dealings with Clerical Medical, in a word appalling still.
It is three and a half months since I requested a 'chargeable with drawl , some thing which has been carried out each year for several years, normally taking about 2 weeks to carry out.
I have been awarded a small amount of money for the service applied, a complaints manager fully agreed with my complaints.
Two C-Medical have promised me that the payment will be made 'shortly', another, the latest inside 21 working days, that passed almost a month ago!
Despite calls and emails, no response apart from today, so I live in hope!
So I would strongly advise anyone thinking of investing in C/Medical products, No NO No, under no circumstances!!!

I would like to sever all ties with this company, but I am deterred by the taxation etc difficulties which may arise and I do not have the knowledge to undertake the task, and as informed in previous threads, to hire a financial advisor for a £28K bond would not be worthwhile in charges. 

I have toyed with the idea of reporting C/M to the FCA, any views on whether this would be worth while? I have already received £200-00 some time ago.

Any views, opinions, help etc would be welcomed please.
My situation is a nightmare and cannot see any way to resolve it.

Thank you.

Thrugelmir

TUVOK said:

So I would strongly advise anyone thinking of investing in C/Medical products, No NO No, under no circumstances!!!

@dunstonh pointed out on the 27th August that the company is long closed for new business. Running down a legacy business becomes increasingly difficult as knowledge of the products slowly dissipates as employees leave. 

Malthusian

Thrugelmir said:

@dunstonh pointed out on the 27th August that the company is long closed for new business. Running down a legacy business becomes increasingly difficult as knowledge of the products slowly dissipates as employees leave. 

Actually Scottish Widows / Lloyds Banking Group, which is who Clerical Medical actually are, is very much open for new business.

Financial companies like to pretend that their old legacy arms are different companies in order to prevent their appalling service infecting new business sales, but we don't have to.

The OP has an insurance bond, which is not an obscure obsolete financial product (like 1980s s226 retirement annuities) that only a few people know about, and there is nothing stopping Lloyds from assigning more staff to the "Clerical Medical" admin department. By not doing so they are failing the new FCA-mandated duty of care, which specifies that it should not be more difficult to take money out of a financial company than it is to put money in.

As the OP's complaint is more than 2 months old, they can take their complaint to the Financial Ombudsman. CM might try to argue that they settled the complaint by accepting the small redress payment offered, but I would argue that if they haven't had their withdrawal yet it's still open.

I won't comment on whether the OP should consider surrendering the whole bond as I would just be repeating what I said earlier.

Albermarle

they are failing the new FCA-mandated duty of care, which specifies that it should not be more difficult to take money out of a financial company than it is to put money in.

I did not know about that mandate , but from my experience there is a long journey ahead to reach that point.