Standard Life wins £100m Sterling fund court battle

There is a delicious irony in an insurer suing another insurer for not paying out when they thought they were covered.

Having helped a client win compensation from Standard Life in a small claims court a couple of years ago over this very matter, I just wish they had paid out to their investors immediately, and then spent their time suing their own insurers, rather than spending almost 2 years defending what was clearly the indefensible. It would have saved many people, including my client and myself, a great deal of work and distress.

It'd be nice to see a group of providers taking on the FSA over its entirely unreasonable, arrogant and typically obdurate stance on trail commission and commission on top-ups to legacy products.

Put together the resources of a few really big providers such as as Pru, Aviva, Standard Life and L&G and even the FSA would have to rethink its usual position, namely We're the FSA, we can do whatever we like and spend whatever it takes to defend our position of being able to do whatever we like.

@ Julian

Surely, Julian, this is the sort of thing we were talking about last week re Arch Cru?

The FSA's stance on this matter is equally "unreasonable, arrogant and typically obdurate" and should be challenged by the IFA community not simply accepted as a fait accompli whilst so may questions remain unanswered.

However, my call for a more reasoned approach by the FSA in apportioning "blame" for Arch Cru and investigating the true causes of this debacle was met with significant disdain by your good self.

As i have said manty times (re Mr Petrie) I am the only Ifa who thinks that standard Life have an ambiguous attitude towards IFAs eg the Ipad debacle and their Sterling Fund in 2009 versus theirv alleged support and constant proclamations in "supporting us"

I am probably being cynical but I just cant trust them

@alan from perth

In the dash for distribution post RDR there may well be a few 'surprises' as to who actually supports the IFA (if that is what we will still be called) Currently I find the unit trust groups are increasingly stepping into the role that life offices once dominated when it comes to support. 2013 could well see the rebirth of the 'direct salesman' who will be charged with replacing lost distribution. It could be a rerun of 1988 and we all know how that ended.

When Scotland gets it independence or The English take first attack for a referendum to kick them out or votes for England independence then invites Wales & NI to join it in a new union.

What will be the effect on regulation and client compensation?

Will the FSA or its new England based successor have jurisdiction over Standard life and our other Scottish neighbour providers.

Should IFAs already be thinking about this in their recommendations as obviously if this turned out not to be the case and also Scottish Insurance contracts were independent of the FSCS in the future we have an unknown.

Obviously after the event we will get taken to the cleaners for not having thought of this and pointed out the risks in our recommendations and suitability reports.

Sorry just a bit of mischief following the “Fred the Shred” dominated news today.

Sir Fred no more however do those that recommended him for a "gong" including Mr Salmond & Mr Brown now disqualify themselves from ever getting a Gong for effectively they are equally to blame for bringing banking and honours systems into disrepute . Not to mention the real UK client monetary loss suffered by all tax payers, without checking each and every individual taxpayers attitude to risk and capacity for loss.

@ Alan from Perth

Standard Life are a business. They will offer support to IFAs, if it is in their business interests to do so.

But their loyalty is to their shareholders, not to any particular group within its supply chain.

If they feel they can make money from direct sales, they will try it. And we IFAs will need to fight the competition, just like in any other form of business.

This "we support the IFA" thing is a throwback to the 1980's when life offices basically controlled the distribution of financial products, and IFAs were an economic way of getting their products sold. It ended when some life offices left Camifa (remember that?) in order to offer direct to the public.

SL aren't the only company who would love to do more direct sales (if it wasn't for the FOS), and they're not wicked, evil, devils-in-disguise just because they don't want to deal exclusively through IFAs. They are simply - erm, businesses. Whose main duty is to its shareholders, and secondly to its customers. Its business suppliers come a (very) poor third in line. Fourth actually, their staff would be ahead of us.

Many IFAs aren't loyal to particular providers - if we think something new is better, we might use them instead. It's all just business. For some reason though, some IFAs seem to have a very emotional pull to some of the supply chain - which can sometimes be rather counter-productive.

It's all business.

For more than 10 years now, I have, wherever possible, dealt only with life offices/providers whose sole and exclusive distribution channel is IFA's. Any claims from any any of the others that they support IFA's are not to be believed ~ to them, we're just one of several distribution channels and if they can make more money by one of the others, then they have no hesitation in shafting us for their own ends. That's business.

I had heard that The Man from the Pru was about to make a comeback as they are recruiting a new direct salesforce.

Here's the link. It's been greeted incredibly warmly, apparently. By whom it doesn't say.

https://prudential.taleo.net/careersection/1848_pru/jobdetail.ftl

I'm in partial agreement with Julian Stevens, which is not that often the case.

Although I wouldn't not use a provider because it isn't IFA-only, you have to think ahead. And Standard Life's i-pad campaign is very instructive to their way of thinking.

Because of that, I got a couple of letters from SL about inherited "clients" whom we didn't even know about! So, it was no loss to anyone that we are no longer registered as their agent.

But - although this didn't offend me, what about in future? If I use their wrap, will they try to poach our real clients for themselves in future? Who knows? maybe though.

In this regard, it would make me think very seriously about whether there is another appropriate provider to use.

To Paul Barnard ~ I tried the link and got The job description you are trying to view is no longer available.

Maybe the Pru received a flood of applicants in these straitened times. I'd quite like to be able to recommend some of the Pru's products but, for as long as I can remember, their admin has been so downright dreadful that I've always kept well away. Almost as bad as that of L&G (and that's really saying something).

Actions speak louder than words. If those IFA's who dont trust Standard Life stopped using them and moved all business away maybe they would get the point.

Would love to Julians' the list of IFA only providers and how dealing with only those companies fits in with whole of market and Independence ,now or post RDR?Arrogant or what?You do whats in the best interest of the client not ,the IFA or your admin issues.No wonder the FSA are so anti IFA with those sort of comments.

This seems to have turned into a discussion about what attributes IFAs will look for when supporting a provider.

I'm still waiting for someone to explain how Standard's PI insurer got the wording of their policy so wrong that they ended up paying out for Standard's incompetent marketing.

To Paul Boyd ~ advising on and recommending the products of a particular company are not the same thing. Why would anyone in their right mind recommend a particular provider or its products in the certain knowledge that said provider will cause endless administrative headaches, take forever to sort them out, refuse to accept responsibility for its screw-ups (including lying to the FOS) and shaft you over the level of commission on which it was all too happy to accept your business in the first place (as did Standard Life and all the other majors back in 2001)?

We also require a provider to have and to provide us with the support of a good broker consultant who actually makes the effort to keep in touch and pay us a vist at least a few times a year. Hardly any of them do that and virtually none of them has ever been prepared to soil his hands with anything so irksomely distasteful as helping to resolve an admin problem. Even if a broker consultant was prepared to try to help with the resolution of admin problems, his sales manager would very probably give him a sharp ticking off and tell him to concentrate his efforts on what he's paid for, namely to ensure that his panel of IFA's shift as much of the company's product as possible. Leave the admin foul-ups to the faceless admin drones at the faceless admin factory 400 miles to the north.

How many clients would be likely to thank you for recommending them to that sort of provider?

But hey, ho ~ if you consider that as an IFA you're obliged to spread your recommendations across the entire market, don't let me stop you. Your opinion is no less valid than mine.

Re Mr Stevens comments-I often read these posts and thinks thats its no wonder that we get tarred with the image of "just a bunch of whingers". HOWEVER having read the above I CANNOT disagree with anything you have said and have found that with the exception of a VERY SMALL minority, broker consultants they are;

1) of liitle help

2) have no knowledged of their products

3) are simply salesmen

4)are as much use as a chocolate fireguard in sorting out problems.

I really couldnt care if Standard Life have won their court case and if the PI insurers are stupid enough not to word a policy properly then thats their fault. As per the above, admin IS an issue when recommending the most suitable product to a client as you will get no thanks (and probably lose the case) for recommending the best if the service is woefull and things go wrong.

I just find that this company is trying to be all things to all people and whilst they have some excellent staff in Edinburgh, myself and many other IFAs up here in Scotland simply dont trust them.

Well have got that moan off my chest I'm away to finish my next suitability report (on a Saturday)

I recently tried to place a very large case with Standard Life. They wanted to become involved with my internal complaince "because in the light of the Sterling Fund debacle" they take compliance very seriously. If only they had been half comptenet at it, that statement may have had more credibility. Thank goodness we weren't seduced by their half baked wrap.

To Julian

The role of the IFA is to do the best for his client and not to ignore products and providers purely down to his own personal prejudices.If a provider has the best plan for the circumstances it should matter not a jot if they have multiple distribution but their ability to process the case efficeintly is a factor that should be taken in to account.If you have the right relationship with your client then why would they be tempted to use anyone but you or "go direct".As for the quality and ability of provider consultants I have met good, bad and indifferent in my 29 years in the industry, just like the IFA's I meet and hear now!Most of the ones we still have do a good job, but many IFA's who moan they never see one are the self same who won't even speak with them when they call to make appointments.Oh and by the way ,I meet many IFA's who are not prepared to listen anyone unless its the sound of their own voice!