In a letter to Mortgage Introducer (published below, along with a reply from Griffiths) Ward also accuses Network Data of losing its agency with Legal and General (L&G) because of poor business quality and ponders what will happen to Network Data’s ARs when the effect of what he claims is poor quality business are taken into account.
Ward writes: “Richard, I am sure that your outspoken approach will lead to you becoming very rich quite quickly, but without dwelling on the issue of run off PI cover, I'm not sure what's going to happen to your ARs as the regulatory pressures start to bite and the quality of the business being written comes home to roost.”
Griffiths has hit back, claiming bemusement at what he feels is an unprovoked attack motivated by jealousy over his success in recruiting 738 brokers to his network. He claims Network data lost its agency following its campaign, christened ‘L&g it’, to attract apparently disaffected L&G brokers.
Griffiths goes on to claim that his campaign contributed significantly to his network’s recruitment success.
The full transcripts of the letters are published below.
Dear Sir
To read all the writings of Richard Griffiths in the trade press recently you could be forgiven for thinking that he had won some kind of race for distribution. Should we therefore all congratulate Richard and Network Data on a job well done?
Richard, well done (I think), for being the first new Mortgage and General Insurance network to have made it into the 500-1000 AR bracket. But hang on a minute, has 'the race' finished, are the medals being awarded, is it time for the match tea, or has 'the race' really just begun? If it was, or is a race, what sort of a race is, or was it, Richard? A sprint as you would have us believe or is it really a little more complicated with hurdles and pitfalls ahead? Also is being the 'biggest' right now, such a comfortable position and is being the 'biggest' right now going to mean you are the biggest, and dare I say most profitable, in five years time. Anyway, is being the biggest what it's all about, do ARs of the biggest feel more secure or make more or less money than their colleagues in other networks.
Richard has proclaimed he has the width, now let us look at the quality? Time for an alternative look at Network Data's proposition.
As I recall Network Data had their agency with Legal & General closed in August. "L&G says it is no longer dealing with Network Data because of the low quality of business it says the network has been submitting", (Money Marketing 19th Aug 2004). Of course Richard rejected L&G's view of Network Data, preferring his own - so who should we believe? And anyway who on earth would want to deal with Legal & General?
Well we would for one, and just about every IFA, multi-tied adviser and majority of tied advisers active in the mortgage & protection markets. They are without doubt one of the first names that come to you if you think about term assurance providers.
So what have L&G achieved since they were set up in 1836. Well they are; the third largest quoted life assurer in the FTSE100 index by market capitalisation, the biggest investor in the UK stockmarket. They won the Management Today Awards - Most Admired Insurance Company (2003), Life Insurer of the Year 2004 (British Insurance Awards in 2004) for the fifth year in succession. At the Financial Adviser awards (2004), Legal & General received overall winner in the following three categories:
· Life Assurance Company of the Year
· Term Assurance Company of the Year
· Online Life & Pension Provider of the Year.
Finally, according to Swiss Re Term Health Watch 2004 (page 14), Legal & General wrote 394,906 individual term assurance policies in 2003, that's more than any other company in the UK!
So when L&G, with all of their experience and expertise in life insurance and distribution, decided to stop accepting business from Network Data because, I quote, "of the low quality of business it says the network has been submitting", L&G must have considered their actions very carefully as they have effectively cut off Network Data's significant volume, not something anyone would have done lightly, in fact in my experience most distributors are courted by providers aren't they?
Richard, I am sure that your outspoken approach will lead to you becoming very rich quite quickly, but without dwelling on the issue of run off PI cover, I'm not sure what's going to happen to your ARs as the regulatory pressures start to bite and the quality of the business being written comes home to roost.
Anyway Richard enjoy your 15 minutes of fame.
Michael Ward
Managing Director
Direct Life & Pension Services Ltd
