View more on these topics

AWD Chase de Vere challenges FOS ruling

partick_Connolly.jpg

AWD Chase de Vere is understood to be challenging a Financial Ombudsman Service ruling that it over-exposed a client to failed group Keydata, saying the FOS was not given the full facts.

AWD is claiming that it advised the client not to over-expose to Keydata above its own recommended levels of roughly 10 per cent of the client’s entire portfolio.

However, AWD says the client insisted they wanted to boost their exposure to Keydata’s traded life settlement products.

Head of communications Patrick Connolly declined to discuss individual clients of the firm but confirmed that AWD is challenging a FOS ruling.

He adds: “We have not had one Keydata decision in which the Ombudsman has found against where we think the Ombudsman is correct.”

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 11 comments at the moment, we would love to hear your opinion too.

  1. Am I the only one left thinking that any percentage of a client’s portfolio invested in this product was “too much”?!

    I would really like to hear from my peers what they thought the motivations were for recommending this product. Were there really no other transparent and mainstream products available to generate what the client was looking for and within their tolerance for risk?

    What is the FOS evidence that allows them to come up with a determination that 20% was the “maximum allowed level”?

    I remain bemused by this

  2. If the client insisted s/he wanted a higher than normal exposure, then it should be fairly straightforward for AWD to produce a copy of the letter stating as much.

  3. Personally I feel that the issue here is whether we are here to handle insistent client transactions or to advise and walk away if someone wishes to do something we are not comfortable with.

    I for one am in the latter camp. Just because I am able to arrange something for a client doesn’t mean I will and if I am not comfortable with a potential client I will say so and suggest they go elsewhere. Every business should work out their own proposition but mine does not include helping anyone do something I feel is a bad idea – much better to lose some income now than feel the pain of a potential fine later on.

  4. I’m with Martin on this.

    When these products first appeared, a cursory examination convinced me that an investment whose security depends upon an assesment of the impaired life expectancy of unknown US citizens was not an investment that I could ever be comfortable with.

    I’ve never been keen on structured products, but these were in a completely different league to say, a product secured and guaranteed by a AAA bank, even a Lehman Bros.

    Julian Stevens is spot on though, if you have an insistent client, who wishes to take a course of action against your advice and recommendation, then you make your position absolutely clear, in black and white, and obtain the clients (contradictory) clear instruction, in black and white, and which no doubt AWD have on file?

    I don’t see the need or the the point in taking the position postulated by Julian Sunley.

  5. Golden Rule (and common sense): If it is not in writing- it never happened.

  6. AWD actively encouraged the selling of these products amongst its saleforce, mainly focused around the high performing Chase de Vere sales teams in the South and their self employed advisers.

    The amount of sales is not as a result of insistent clients, the clients were targetted on the database and existing investments where often sold to put into Keydata and similar. These self same advisers and sales managers where then celebrated as top performers and rewarded accordingly, with a number of them still serving at senior / Board level.

    This is exactly the same sales approach that got them a £1.2m fine for pension mis-selling and was driven by their systemic adiction to commission chasing (see the FSA report on the fine)

  7. Martin, I could never be considered to be your peer, or any other IFA’s for that matter, but I do agree with your assessment 100%.

    I asked the same question, “where did this 20% come from?”, the answer is “FOS in an adjudication against Chase De Vere !”

    I have never heard of this before, but they can always bend their own ‘rules’ if it suits them of course.

  8. Martin – Bearing in mind that any IFA who reccomended a Keydata Plan using Life Settlements will need to limit what they can say under their own name, due to PI issues, I would hope you accept there may be some relevance in actually using/having the anon button in these circumstances.

    I have posted this in my own name you will note so that you can state publicly whether you want to hear what other advisers were thinking and trying to achieve for their clients honestly or if you are just looking to score points.

  9. I’ve just realised, I’ve confused Nick and son Martin!

    Oops, sorry to both, but I’m not sure which one I’ve insulted!

  10. I think Julian’s point about insistent clients is interesting. Where do you draw the line with “slightly uncomfortable with and very uncomfortable with”. I have turned people away and refused to act for them where I am very unfomfortable, but have acted and will continue to (but document it) when slightly unfomfortable.
    The very uncomfortable, we refuse to act becuase as a professional our opinion is based on us actually knowing better than the client. With slightly uncomfortable, we will act as they wish because the situation may be one where on that subject we no no more than our client or it is one of personal priorities. This would include things like arranging an annuity on a sole life basis at the insistance of the client, when our advice is that they shoudl protect their spouse. It is after all their money to choose to spend how they wish and just because they are married does not mean they give a dam about them anymore.

  11. I have just realised the same as Gerry. To Nick I appologise, as I can’t ever say I’ve seen you trying to score points, but that does often appear to be the case with Martin, so either of you can reply should you wish.

Leave a comment

Close

Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm

Email: customerservices@moneymarketing.com