Transfer Frustrations – Section 14

An irate client, who also happens to be an experienced financial advisor, copied me in on a letter to a product provider.  It expresses the feelings of so many others who have shared their frustrations with me after their battles to get retirement funds transferred to a new provider. After complying with all the legal requirements to have the proceeds of his matured RA transferred to another provider, he received a letter asking all kinds of questions. In his opinion, it was more of an attempt to retain the funds than genuine concern that the client would not be able to make an informed decision.

Dear Sirs                                              

Having experienced a number of Section 14 transfers during the course of the past few years, I find it extremely frustrating that, whilst various companies have conjured up various

“requirements” (some bordering on the RIDICULOUS), most have ONE thing in common:

They wait until the entire Section 14 process is virtually complete, with the funds just about to be transferred after the last “official” requirement has been complied with – and THEN they send documents similar to this one for the client/member to complete and sign!

Anyone with the slightest amount of common sense should know that this document should NOT be sent at the END of the process, but rather at the BEGINNING! Furthermore, this document is obviously a “standard form” that has NOT been adapted to this specific RA. It’s a “one-size-fits-all” form that plays on the misconception that everyone who reads it is ignorant of the facts applicable to these cases and, quite frankly, it’s an insult to the intelligence of any experienced Financial Advisor!

We are compelled by the FAIS Act to prepare case-specific documentation for every client, and yet the companies can produce documents like this with clauses that often have very little bearing on the case-at-hand without so much as an apology that this might be the case.

You are by no means the worst “offender” that I have seen, but I ALWAYS point out the nonsensical clauses to my clients and I can assure you that this generally annoys the clients and changes their perception of the respective company.

In this case I AM THE CLIENT, and I don’t need to explain WHY I want to move a RA that has already passed its official maturity date. I also know (a) there was NO Life cover or other benefits, AND, (b) even if there was, these would cease at the official maturity date, so the relevant clause is nonsensical to say the least.

Furthermore, as a Financial Advisor, it is MY duty to explain and cover EVERYTHING and more than what this document contains. I accept that responsibility and in terms of the FAIS Act, I am held responsible for any potential problems, NOT the product provider!

So, we have to ask WHY these companies have conjured up these forms? The Principal Officer of a fund with an atrocious (similar) document told me it was in order to INFORM clients – to help them make “informed decisions”. What rubbish!

The mere fact that this form is produced at the end of the process and contains so much irrelevant data, tells me that the companies do this in the (misguided) hope that they will create enough doubt to make some clients change their minds! The fact that case-specific details are ignored, confirms this.

Desperate minds resort to desperate measures – sad, but true.

Is that a smattering of applause I hear in the background? Delaying the transfer process means that the funds under management are retained longer. Whilst this may not mean much where one individual is concerned, it makes a huge difference when thousands of RAs are affected.

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