A salutary Tale
Most of us who have operated within the financial services marketplace for any length of time no doubt already have some fairly definite views of the 'service' element of our proposition, the value of it, and the general state of play within the industry. Here is an account of a recent experience of a particular insurer which will remain anonymous: let's call it Crudential.
A male client approached me for help. He was nearing retirement and had requested information from his pension-provider to help him make some informed decisions about his benefits, and the best way of taking them. He thought he had left enough time for this period of planning, having asked for the information in April, as he was due to retire in early August. This assumption, it transpired, was a product of extreme naivety.
Crudential responded by sending him apparently random information which didn't really match his requests, and by freezing his regular contributions which still had nearly six months to go. It was as if their customer services operatives were not given 'normal' computer systems, but ones where the keyboard gave them the option of pressing a green, or a pink or a blue button in sequence in order to generate paperwork. Each request for help resulted in the next-hued key being pressed, and when we got to the tangerine option, the client contacted me in a panic. After all, it took Evolution billions of years to publish the complete works of Shakespeare through the random key-presses of an infinite number of monkeys.
After the obligatory Letter of Authority, initially things seemed to go well. We received some of the information we asked for, but not quite all. We got back in touch to request the outstanding items. Nothing happened. I chased them a few more times, left messages requesting a callback (an option given by the Crudential's telephone queue), but in all it took us around six weeks to receive what we had asked for. Bafflingly, during the same period, the client continued to received written reminders from the company haranguing him for his apparent lack of engagement with the vital issue of accessing his pension benefits. We discovered in the process that notes carefully taken by one of the company's operatives, especially in relation to a strategic update that I had given on client data, had evaporated into thin air. It was as if those lengthy, laborious conversations were all just little figments of my fevered imagination, the product of the clearly spurious belief that I was actually interacting with a customer services department.
Finally, we got there. A batch of paperwork was completed, which a Crudential representative subsequently informed me bore no relation to any documentation currently issued by the company. This helped to cement the aura of unreal fantasy which surrounded every interaction with the company. We scripted a covering letter which was 110% Idiot-Proof and posted the whole lot off...into a black hole. After a couple of weeks of non-response, the client rang me to question why he was continuing to receive reminders about his retirement from the insurer: had we not sent the vesting documentation off? Contacting the Crudential to ascertain whether the paperwork had been received and was being dealt with, or if instead it was being danced upon by an old crone in the Scottish Highlands, having been delivered there by a team of trained yaks, was not entirely straightforward. The company's voice-recognition system apparently did not recognise anything I had to say about annuity paperwork, and I was randomly-directed to people for whom 'annuities' were an interesting, albeit entirely foreign novelty. I even tried articulating my area of interest in a fake Glaswegian accent, in case that improved the odds of being understood. It didn't.
You might say, quite reasonably, "So why didn't you go somewhere else?" And that's a fair question: at times the temptation was quite overpowering. However, these plans were subject to a GAR, and this made such a huge difference to the client that we had to stick with this provider. Having said that, I discovered quite early on that there would be no commission by way of remuneration, neither was adviser-charging facilitated - and it would probably have been cheaper in terms of time costs if I had transferred the funds elsewhere and simply funded the annuity shortfall out of my own bank account, forever. Perhaps this is what insurers are beginning to expect?
Are there any lessons to be learned from this sorry tale? Unfortunately, they are mostly negative. It seems as if insurers such as the Crudential have compensated for the additional costs associated with GAR contracts by contracting their support infrastructure to a small garden shed in an alotment near Musselburgh where internet coverage is at pre-1980 levels. Certainly, it seems that the company's admin systems are fragmented, and even when it was clear that they had let our client down, there was no apparent sense that perhaps they should expedite matters in order to compensate him. One is left wondering how on earth customers are expected to make valid financial decisions if left to their own devices - dealing with the Crudential took me close to the brink, but I at least knew precisely what we wanted, and had a reasonable expectation of what was involved. The poor client was labouring under the foolish misapprehension that this was his money, and so therefore the insurer was, in some sense, accountable to him. I know...just plain unrealistic...
On a more positive note, what a great justification for using an IFA! No normal person, careful of their own mental health, would wish to put themselves through this kind of ordeal. Why not pay someone else to endure this war of attrition in your stead? And someone who can do the same thing, time and time over for not just one product-provider, but any company? What a fab proposition that would be! IFAs do, however, need to build a Prozac Allowance into their charging terms...