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Advisers hit out at holes in cold-calling ban

Time delays, failure to cover investments and overseas schemes stoke adviser scepticism over new legislation.

HM-Treasury-500x320.jpgThe Government has confirmed the ban on pension cold-calling will not be extended to all investment products as IFAs spot a number of issues with how new legislation will be implimented.

Yesterday the Government confirmed measures to protect savers from pension scams, including a ban on pensions cold-calling, which will now also include emails and text messages.

In their consultation response document, the Treasury and the Department for Work & Pensions say a number of respondents to the consultation said the cold-calling ban should be extended to all investment products because scams can occur with fraudsters referring to “alternative investments” instead.

The Government confirmed it does not consider a ban on cold-calling in relation to all investment products is proportionate, which has garnered a mixed response from advisers.

Fact & Figures Chartered Financial Planners managing director Simon Webster says: “In general terms all pensions mis-selling has started from a cold-call and that is widely accepted within the profession and elsewhere so that is something they need to get rid of.”

However, he adds: “Decent professional financial advisers I speak to are too busy to employ marketing firms to do make cold calls and drum up business. It [raises] the question what kind of business is going to be promoting investments to Joe Public by telephone. I am not overly comfortable with the idea that cold-calling for this kind of business is appropriate.”

Cavendish Ware associate director Roy McLoughlin says well-known investment firms use lead generation and cold-calling to generate business.

He says: “Whether we like it or not, because of the lack of advisers, one has to address that people will still seek out a form of advice and therefore as long as it is responsible and people are made to declare their status we have to take that different ways of communicating with the general public are acceptable.”

The Government response also confirmed that the Information Commissioner’s Office, which will enforce the ban, will not be able to take action against firms based overseas because they are outside the UK’s jurisdiction. The exception to this is if the calls are made on behalf of a UK company, but will likely not hit some overseas unregulated schemes and Qrops opportunities.

The Government says: “Respondents generally appreciated this point. A number of respondents said that an effective awareness campaign would mitigate the risk of consumers being scammed by overseas firms.”

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 This is my last editorial column for Money Marketing, and the last day that I will oversee the team as editor. Over the last seven years as part of Money Marketing I have seen two regulators, three governments, two advice market reviews and countless (and I mean countless) FCA consultations. Money Marketing is known for […]

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Presumably legit IFA will need to wait for customers to call them.

  2. In years gone by pension had to be sold in this way, because people just were not aware that they could even fund their own pension. Most people suffer inertia with regard to financial matters, so direct contact has to be made with that section of the population.
    The nose in the air IFA will always tell you he or she only deals with HNW clients, is just farming a connection that mostly started with someone making a cold call years ago. Great that these quasi professionals can farm their connections, but there is still a vast number of people denied the required advice. I did the job for over 40 years with all the required qualifications and a lot of HNW clients, mostly they came from good quality private banks. There were some less well off clients to, they had less money. However the less you have the more important to get the best advice. Most IFAs are so far off the planet they are not quite human.

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