“Some really good transfer advice has been provided,” says Jeannie Boyle, executive director and chartered planner at EQ Investors.
“It’s all too easy to just focus on the bad practice.”
The regulator reports that it has started visiting some firms, beginning with those which are most active in the DB pension market.
Its goal is to complete a full assessment of DB advice, focusing on business models and processes which it believes could have a deleterious outcome.
Unintended consequences
Insistent clients pose other risks for both advisers and consumers.
In March this year, the FCA confirmed that the Financial Ombudsman Service would soon be able to require financial services firms to pay more compensation to consumers and businesses – a leap from the £150,000 limit to £350,000, which has had an impact on the availability and cost of professional indemnity insurance for advisers.
Another possible, unwanted outcome from the hike in compensation is modelled by the FCA in its policy statement of March 8.
The regulator recognises that in a worst-case scenario, based on professional indemnity premium increases forecast by insurers, up to as many as 1,000 advisers could stop providing DB transfer advice because they would be unable to afford the cover.
This would therefore have an impact on the availability of advice for those who need it.
There is no easy solution to the problem of insistent clients.
However, Keith Richards, chief executive of the Personal Finance Society, suggests advisers avoid them altogether, to protect themselves.
As he says: “The best step an adviser can take to protect themselves and from insistent clients from the outset is to refuse to accept their business, and for those who agree to accept advice but subsequently want to ignore it and go against a personal recommendation of suitability, don’t facilitate it – we will be protecting the public and the profession alike.”
Fiona Nicolson is a freelance journalist
