A Hampshire based Financial Adviser has lost his case in court against Scottish Widows.
The case was brought as Scottish Widows were alleged to have caused an extra 16 hours work in delays and additional administration for the adviser when the adviser was transferring client monies away from Scottish Widows to an alternative provider at the retirement of a client. The court agreed with Scottish Widows, that as the money was being transferred away from them rather than to them, they have no duty of care - they only have a duty of care to those who are about to become clients and not those who are about to cease becoming clients.
Likewise, it was argued that there is no servicing contract between the adviser and the provider.
Our View:
This ruling stinks! All clients be they the general public or an intermediary acting on behalf of the client, the middle man, deserve reasonable levels of service. When an adviser opens an agency with a provider or a client invests with a provider, a contract of service is created irrespective of whether it is in writing or not. It is an assumption that by investing you will receive service.
Commissions may also be paid by the provider to an adviser to administer the policy on behalf of the client. Up to the very second before the money was transferred away, both the adviser and investor were clients of the provider. If any provider is providing poor service and creating additional work for others by their mistakes or delays, people deserve compensation.
This sortt of uniformed ruling, no doubt engineered by highly efficient lawyers, does nothing to help the consumer. It is of absolutely no use to the consumer or the industry as a whole and is just another nail in the insurance companies can do what they want coffin.
Having said all of this, we have generally not received poor administration levels from Scottish Widows - we could name many other providers who are a lot worse and to be fair they did offer an ex-gratia payment to the adviser.