Claim-chasers are moving into offering financial advice, saying they will help end the trend of “poor advice” that they say has tarnished the sector.
In a move likely to infuriate many advisers that have lost millions of pounds at the hands of claim-chaser firms, a number of claim companies are starting to offer advice or refer customers on to advisers. Some also provide debt management guidance.
Highclere Financial Services partner Alan Lakey says: “I find those claims about poor advice unsavoury. It is another kick in the teeth for the industry.”
The Claims Standards Council, the chasers’ trade body, expects many more claim firms to enter the financial advice sector and also target new areas of financial misselling. This is because revenue streams are likely to diminish due to time-bar rules which mean that endowment misselling claims will dry up in the next few years.
The two growth markets in financial misselling claims, to add to endowments, bonds and pensions, are payment protection insurance and compensation for unfair bank charges.
Claim-chaser Keypoint is this week moving into those two sectors. The firm also runs a referral service for mortgage advice with Legal & General appointed representative Moneybox and with Access Broker Services to provide secured loans.
Claim-chaser Seeing Red has set up an FSA-regulated subsidiary, Red Financial Solutions, to offer advice on mortgages, investments, pensions and life insurance.
Other firms, such as personal injury claim-farmer ALA, also offer debt management services.
CSC spokesman Andy Wigmore says: “Many companies have seen other opportunities. Many of those running misselling claim firms are ex-insurers and brokers so they know the industry.”
Seeing Red managing director Steve Credie says: “There is no question that there has been a lot of poor advice in the market. We want to make certain that consumers get the right financial advice.”