AIB Bank Charges

I received two letters from AIB on the 18th of March (both dated 30th April) informing me that the 'agreed fee arrangement' on the accounts expired on the 28th May. They went on to inform me that their 'Standard Rate of Fees and Charges' would apply from the 28th of May. A copy of their 'Business Fees and Charges' booklet was supposed to be enclosed, it wasn't.

I rang the local branch on the 18th to speak with my 'Relationship Manager' and got to talk with the person that had signed the letter on their behalf. I asked for a copy of the original agreed fee arrangement and the charges booklet. There was no sign of these a week later, so I called again. The guy that was supposed to send out the information would ring me back 'in a few minutes' - he didn't. I got to speak with the 'Relationship Manager' on the 27th, after another call to the branch. He was not aware of the previous calls.

To cut a long story short, I'm none too happy about the bank increasing the charges on my accounts. Under the existing agreement - I managed to find my copy - I pay 25% of the standard charges and, to me, this represents a fair arrangement as I'm not in and out of the branch every day. In fact, I have been in it just 7 times this year.

What's really bugging me about this effort by the bank to squeeze account holders for the errors of the banks ways, is that the letters I received were written without even bothering to look at the original agreement. They have assumed that I do not have a copy and are reluctant to furnish me with theirs.

The old agreement, dating back to 2006 and signed by the same 'Relationship Manager', states that it 'is for a specific period of time' but the expiry date is down as 'Ongoing'. It also states that I will be 'advised by letter of the expiry of the agreement one month prior to the expiry date'.

So, it seem that the expiry date of the agreement has been made up by the bank. It is also underhand to date a letter that implies that it was issued a month before a fictitious expiry date when it received by me 10 days before said expiry date.

What would you do?

The Life & Pension Industry's Vicious Circle

The Life and Pension Industry is starved of 'new' business. Economic woes have led to folk reducing or stopping their contributions for Life Insurance, Pensions and long-term Savings and Investments plans. Others have simply put off their decision to buy these products because of all the uncertainty. The Government decision to slap a 1% Levy on Life Insurance and Savings and Investment Policies has not helped matters either.

One would assume that this would lead to Life & Pension Companies introducing innovative consumer friendly ways of enticing punters to buy their products. Instead of bending-over-backwards to acquire 'new' business, it would appear that they have resigned themselves to a policy of 'rob your competitor'. I am defining 'new' business, as transactions that are not set up with another provider already and have not reached their maturity/end date.

The industry standard at the moment is to offer incentives to advisors to move their book of business from one provider to another. I cannot, for the life of me, understand why the companies are even entertaining this zero-sum game. The exercise is fraught with danger, in particular, from a consumer perspective.

In my humble opinion it is a disaster waiting to happen. The company that receives the transfer of business gets to report magical and illusory 'new' (to them at least) business figures at the end of the year. If you're a manager and you are rewarded on 'gains' in market share, then you are going to be quids in at the start of next year. If you are an advisor, you will also have received some incentive payment. Let's face it, you are not doing it for no reward. However, if you are a consumer, you are going to be caught in the cross-fire.

There may be genuine cases where transferring a transaction from one product provider to another is in the best interest of the policyholder but I would argue that, in the majority of situations the reasons for the transfers are spurious and incentive driven.

Something needs to be done. The Life & Pension Companies need to cop themselves on and stop encouraging the transfers of business from one provider to another. Otherwise, they will be mired in a mis-selling scandal and the business models that they currently employ will implode, as the same transactions are passed around from Billy to Jack every few years. They have to acknowledge that the consumer is the most important person to the survival of their business.

To the consumer, I say : 'If a proposal is presented to you to transfer from one product provider to another, make sure that the reasons for the transaction are in your best interest. Get a second opinion. Ask for confirmation, in writing, that there will be no entry or exit penalties/charges on the 'new' transaction and that you receiving a more favourable annual management charge. Ask for written confirmation from the company that the business is being transferred to that the advisor has no 'deal' with them that stipulates a required minimum level of business.'

It's very disheartening to be watching this from within the industry.

Caveat Emptor.

Surveys - What's the point?

I'm sick to death of being asked the same questions, year in year out, by the same companies. The main thrust of these surveys is to establish who 'I' consider to be the 'best' Life & Pension product provider; under a myriad of headings.

I have come to the conclusion that their sole purpose is to satisfy the egos of senior management, because the outcomes would appear to be ignored. Perhaps there is some 'bonus' payment for moving up the industry 'ranking' or maybe they want me to adapt to their corporate belief system? Then, and only then, will they "value my opinion".

You don't need an annual survey to find out what companies are in favour, it is reflected in the volumes of business they are transacting. The dogs in the street know why they are successful.

Two years ago I completed a survey for a company and raised a servicing issue. The following year I refused to complete it, as the original issue had not been resolved. Rather than implement any change to resolve the matter raised in the survey, the company choose to ignore my protest. So, what's the point?

I presume that there is an annual budget for these surveys that 'must' be spent. The inaction on the results just shows that it is a waste of marketing money. Rather than ask 'the market' what you are doing wrong, why not just ask your customer service/account managers? They are the ones that are getting the abuse on a daily basis and are closest to the coal face.