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OPINION

Life of frustration

Life of frustration
August 2, 2017
Life of frustration

After a bit of email to-ing and fro-ing, we both agreed that a major constraint on the poor old IFAs – and the one most likely to make them seem inefficient slackers – is that they, too, have to spend inordinate amounts of time dealing with life companies on behalf of their clients; cajoling them to find the details of a policy they have lost; pleading with them to price up an annuity whose return is calculated just once a month, and maybe only if the month has a ‘y’ in it.

“Godot is more likely to show up than a life company will get back to you when it says it will,” said my IFA confidant with an unexpected literary reference. “You could die waiting for them – and some of my clients have.”

So, we said to each other, the blame lies fair and square with life assurers. If there is misery to be endured in the process of managing long-term savings, life companies will be intimately connected to it. And, sure enough, a great piece of evidence – though with a weird outcome – was sitting on my desk.

First, though, a digression. My experience of life companies now stretches back 37 years, to the time – hesitant and naive – that I took out an endowment policy, despite having little idea what an endowment policy was. Since then, I can say with honesty – though no pleasure – that, in my dealings with them, life companies have almost always failed to meet my expectations. Indeed, as those expectations declined with each encounter, life companies, in a tragi-comical race to the bottom, somehow managed to undershoot when next our paths crossed.

It reached the point where I minimised my dealings with them so as to avoid the head-banging frustration of sorting out their errors; though a trail of angry correspondence reveals that minimal contact was still too much.

When you are running a personal pension plan – as I was from the early 1990s – that’s not exactly ideal. After all, an important part of a personal plan is that the saver gets to choose where premiums go. That requires telling the life company to switch capital and/or premiums from fund to fund. If that does not happen, because the saver daren’t risk the chances of the life company messing up or can’t face the time spent mopping up, then the capital may be run less profitably than it should. I consoled myself with the contentious thought that I was in for the long term so switching funds brought little benefit and might even be counterproductive.

But anno Domini marches on. For every relatively affluent baby boomer there comes a time when the loss of £x,000 wealth is more painful than the gain of £x,000 is pleasurable. For Bearbull’s chief pension pot (or, if you like, for the alter ego behind Bearbull, since this tale is factual) that time arrived this summer. Thus I took a deep breath and asked the Glasgow branch of Phoenix Life – they who had caused most of my grief over the years – to switch the capital in my old Scottish Mutual pension plan.

They don’t make it easy in the first place; nothing so simple as online switching. With that particular bit of Phoenix Life, the process remains rooted in the 1960s, starting with a telephone request for a switching form, which – the person on the help desk tells you – will be sent within six working days. True, the market could lose 20 per cent in that time. But happily it didn’t and a process that began on 25 May was completed on 8 June. Sure, Phoenix Life took as many days to do what a stockbroker can do in the same number of minutes. But let’s not be overly critical. They switched the pension capital to low-risk stuff and they got it right. I received the confirmatory letter on 15 June telling me that the correct amount of capital was in the correct places.

Too good to be true? Of course it was. Did they screw up again? Need you ask? The following day I got five letters from Phoenix Life – one for each plan in the account – confirming the changes, and they were completely and utterly wrong.

Yet there’s good news – according to the second batch of letters, my pension account stands at £275,000 more than it did the day before, which is a useful boost. I could speculate that those nice people in St Vincent Street felt I deserved this for my long suffering; or – more plausible – maybe it is a bonus relating to one of the many times Scottish Mutual changed hands during the formation of its parent, Phoenix Group (PHNX).

But we all know what happened. So my dilemma is, should I tell them, especially knowing they will make further time-consuming errors correcting their earlier error. Obviously, this week’s column is partly a confession. Now the ball’s in their court. Let’s see if they spot it.