'Flabbergasted' IFA receives £10m commission in error

THE “flabbergasted” boss of a national IFA has revealed the business received an unexpected 200,000% increase in a fee payment from a provider following an accounting gaffe.

Friends Life paid 2plan Wealth Management £10m last month when it owed the firm about £5,000 in ‘normal fee income’.

When 2plan raised the accounting error with Friends Life, it appeared the provider was unaware, according to CEO Chris Smallwood (pictured).

He said managing director Chris Davies attempted to contact the insurer’s CEO directly to speed up proceedings but was unable to do so despite trying on a number of occasions, reports sister publication Professional Adviser.

Smallwood said: “We were somewhat flabbergasted by their lack of urgency in correcting what was a significant accounting error.

“Had that money fallen into the wrong hands – an unscrupulous individual, perhaps – then you wouldn’t have seen them nor that money for dust!”

He said he hoped the insurer had learnt its lesson and would review its systems to ensure transfers like these do not go unnoticed in the future.

“From our point of view, what the incident demonstrated is that our systems offer a great level of clarity and visibility,” he said.

“That is so important when you consider we have so much money from so many different sources coming through the business and must therefore be able to handle it with the utmost efficiency.”

A Friends Life spokesperson said: “We unfortunately made a commission overpayment to a financial adviser. This was caused by human error.

“We spoke to the adviser to arrange for the overpayment to be returned. We would like to thank 2Plan Wealth Management Ltd for their co-operation in helping us to resolve this.

“We have reviewed our internal processes to ensure that an error like this will not happen again.”