Romi Savovi, chief executive of PensionBee, which combines old pensions into an online plan, said she choose to write an open letter after Aegon failed to “meaningfully engage with us despite direct letters to you, your independent governance committee and various other Aegon employees”.
Asset manager State Street Global Advisors is the largest external shareholder in PensionBee, which is privately owned, regulated by FCA regulated and covered by the Financial Services Compensation Scheme (FSCS).
Quadruple the time
“Aegon’s arduous transfer approach for our mutual customers is out of line with that of its peers, who enable customers to switch their pensions quickly and safely to their chosen provider,” Savovi wrote.
“Since 8 June 2017, customers wishing to transfer out of Aegon to PensionBee have faced barriers to switching, including multiple discharge forms, telephone calls and repetitive requests for information that has already been provided. There are various other steps that impede the customer’s right to switch pension provider easily.”
Around 600 customers are thought to have been impacted.
Savovi claims that a typical electronic transfer with similar providers is completed in 12 days or less.
The average time for Aegon is circa 54 days, she said. “The true scale of the detriment remains unknown, since many people have been unable to overcome the barriers placed in front of them by Aegon in their attempts to switch or have simply given up.”
She continued: “I note that your communication to our mutual customers refers to due diligence and the importance of preventing transfers to pension scams.
“I wholeheartedly agree that this is an important aspect of any transfer decision, but Aegon has not clarified to us any specific due diligence concerns that it has regarding PensionBee.
“More importantly, I am concerned that bombarding customers with impersonalised pension scam warnings will lead to such letters being considered as red tape. The consequence may be that some people ignore genuine red flags when transferring to an actual pension scam.”
Treating customers fairly
Citing a letter she sent to the Financial Conduct Authority, which regulates PensionBee, Savovi wrote: “I do not believe Aegon’s approach to transfers-out is treating customers fairly (TCF).
“As I’m sure you know, TCF’s outcome six requires that ‘consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch providers, submit a claim or make a complaint’.”
She concluded: “It is difficult to understand why Aegon treats its customers differently to other providers, who are all transferring electronically to the same FCA-regulated PensionBee pension plan.”
When contacted by International Adviser, an Aegon spokesperson said: “Aegon is very much at the forefront of using digital technology to support advisers and connects electronically whenever possible within the bounds of technology and our regulatory responsibilities.
“Having invested heavily in systems to ensure that pensions transfer safely and efficiently, either to another provider or to us, we use a digital transfer service whenever possible.
“Where this isn’t possible we operate appropriate procedures to meet our regulatory and legal responsibilities. Transfer requests from PensionBee are treated in line with Aegon’s due diligence processes, which are in place to meet our legal and regulatory obligations.
“Aegon have reviewed our overall approach in respect of PensionBee and is comfortable that our approach is appropriate.”