New Customers v Existing Customers Probe.
The Financial Conduct Authority (FCA) has finally acted on an issue that we have been highlighting for years. The issue is this:
New Clients: Calls are answered by pension, investment and insurance companies in seconds, quotations are usually issued within 24 hours.
Existing Clients: Some pension, investment and insurance companies do not even take calls for existing clients, you have to email and hope to get a response, others do take calls but it can take an age to get through to the right person. It can then take weeks and months to get information.
Once they have your money and are charging you, you are “sent to the back of the queue”. This has been our experience for years.
What is the FCA doing?
Last week, the FCA published final guidance on actions regulated firms should take when dealing with existing and closed-book customers. The FCA wants to ensure that closed-book customers, who have life insurance products that are closed to new business, are treated fairly and do not receive less attention than customers who have recently taken out a new product.
Within 3 months, all firms must review their current models to ensure that existing clients receive the same attention as new clients.
Treating customers fairly: The simple message is that firms must treat all clients with the same priority.
However, the FCA expects firms practices to be reflected across all products.
Anything that pushes regulated firms to resource existing client service departments to the same extent and offer the same turnaround times as new business departments has got to be a good thing. As we often tell too many pension and investment companies: “Don’t forget it is the client that is paying your wages”.