Managing director of retail Simon Collins says a number of advisers have been too quick to take providers at face value rather than challenging their offerings.
He says: “Some advisers are finding that their due diligence is not as robust as it should be and this comes to light when problems arise or advisers are required to prove that they have looked at the whole of the market. There is now far more onus on advisers to justify the third parties they work with.”
Baronworth director Colin Jackson says he does not believe advisers have relied overly on provider reputation when selecting products.
He says: “Advisers have often looked at counterparty risk and relied on the ratings the credit rating agencies assigned to it. You cannot do that any more but I do not think advisers should be held accountable for doing that before the collapse of Lehman Brothers because there was no alternative.”