View more on these topics

Comment of the week: Advisers should be up in arms about Arch cru redress scheme

Dear oh dear, the point is not who is being pedantic.

The FCA letters to be sent to clients who invested in the funds were poorly written and biased and a lot of advisers would have liked to make the amendments that gave clients the opportunity to opt out of the review as well as opt in.

Now, notwithstanding the fact that the letters were badly constructed and clearly biased towards encouraging an opt-in, advisers whose clients did not reply are now required to submit client data to the FCA so the regulator can call them and ask the clients themselves if their advisers contacted them about the redress scheme.

To create a system which is biased, which doesn’t create the results you want and then to continue to pursue firms because the right result didn’t emerge is so wrong, every adviser should be up in arms about it.

And if you didn’t advise on Arch cru you should still be up in arms about it because you do not want them to do the same the next time.

I have met clients who have had very poor advice and those advisers should be taken to task for their failings – but I have also met clients who received perfectly suitable advice.

The point of all of this is that where advisers gave poor advice they should be called to account for this. But no adviser should be made to pay for the sins of the product providers.

Please try to separate the question of poor advice when you are thinking about this otherwise it leaves the door wide open every time for advisers to always carry the can for provider failures.

 Gillian Cardy

Recommended

Tech-Technology-Computer-Pound-700x450.jpg

Iress launches new integration hub for investment

Iress has launched a new provider integration hub for investment products with Standard Life announced as its first partner. Accessed via Iress’ existing Adviser Office, Iressnet is designed to supply quotations and applications for investment products without the need to re-enter data on both adviser software and provider software systems. Iress has initially partnered with Standard […]

Developing your personal relationships – Webex

Read more 9amFinancial advisers and solicitors working together Presented by Ian Muirhead, director & chairman at Solicitors for Impartial Advice (SIFA) Listen to Ian’s expert insight and experiences of how financial advisers and solicitors can work together to deliver mutual benefit and enhanced client outcomes. Register here 10am Financial advisers and accountants working together Presented […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. Of course we’re up in arms, not just about the way in which the wording of the letters imposed by the FCA deliberately offers clients only one choice, namely to opt IN to the redress scheme, but about the fact that all and any requests for the wording to be reconsidered, in the interests of fairness and balance, will have fallen on resolutely deaf ears. Surely, in any fair and reasonable world, intermediaries should be allowed to explain to their clients their side of the picture? But then, of course, intermediaries have to operate in a world that’s anything BUT fair and reasonable. What the regulator decrees is the way it’s gotta be and that’s that. Fail to conform and we’ll expel you from the business.

    One can just imagine the response to anybody’s complaint that the letters, as prescribed, manifestly fail the regulator’s own test in that they’re not fair (to intermediaries) and that they’re definitely misleading (in that they’re completely devoid of balance). The response will simply be that that’s the wording that regulator has decided upon, so just get on and issue the letters without further prevarication ~ or else.

    Most clients probably assume that the costs of any redress (because it’s “a scheme”) will simply be met from some central consumer protection fund to which everyone has to chip in just a few quid every month, all for the common good. The costs of redress won’t actually hurt any individuals, so why not opt in? It’s money for old rope and who doesn’t fancy a bit of that if it’s offered to them on a plate? How many of them will realise that, by opting in, they’ll very possibly be contributing to the financial destruction of their adviser and his business and that they’ll then need to find a new one? Hardly any would be my guess. Is that likely to be “a good consumer outcome”?

    Never mind all that, says the regulator, reaching for its tattered old Consumer Protection flag, under which it can, to itself at least, justify just about anything. We, in our unchallengeable omnipotence, have decided that all and any consumer detriment shall always be the fault of any intermediaries (never ours) who may have recommended any failed products or funds and therefore that they must pay or, if they can’t, the rest of the intermediary community must do so.

    And therein lies the problem ~ the FCA, both in its current and previous guises, isn’t required to account to any outside body for anything. Okay, it may be called to answer the occasional sticky question put to it by the TSC but so what? The TSC has no powers of sanction or enforcement so what does the regulator care? It’s the policeman, the judge, the jury and the executioner. It has, and frequently exercises, absolute power without accountability.

    Which is why we need an Independent Regulatory Oversight Committee with real teeth and unassailable powers to say to the regulator: This wrong and you aren’t going to do it (or you’re going to have to undo it).

    What’s APFA’s view on this? You’re supposed to be our representative body in matters such as this, so what are you doing about it apart from yapping at the FCA’s back door?

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