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FCA: It is up to industry to tackle insistent clients issue

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The FCA says it is the industry’s “responsibility” to find a solution to the insistent client problem that is holding back savers’ access to the pension freedoms.

In a policy statement published today the regulator responded to feedback on pension transfers and clients who want to act against the recommendations of an adviser.

It says the insistent client issue has implications beyond pension transfers and that a “more holistic view” needs to be taken before any intervention can considered.

The FCA says the pension freedoms have “increased apprehensions of advising and transacting in some cases”. It adds there is a risk consumers lose confidence in the industry’s ability to deliver the reforms.

However, it also says: “While we consider whether there is a need for us to undertake more work in this area, we believe there is a responsibility upon the industry itself to consider how it can deliver on customers’ expectations.

“We do not see any case for moving away from client’s best interests as a starting point for advice.”

Broader changes to the pension transfer process are also being considered.

The regulator says current transfer value analysis comparisons “are unlikely to be helping customers to be making informed decisions; this is because the included information is so overwhelming that is is doubtful if the document is being read”.

It adds it will consider changes to the advice regime around enhanced transfer exercises as part of its response to the Financial Advice Market Review.

Other changes announced in the paper include a proposal to ban product application forms from being included in wake-up packs, extending advice requirements to UFPLS and introducing more flexibility around the so-called second line of defence.

However, the regulator has extended the deadline to one year for firms to comply with new rules on the margins taken by Sipp firms on cash, pension freedom communications and projections.

Firms will now have until 6 April 2017 to make the necessary changes.


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There are 15 comments at the moment, we would love to hear your opinion too.

  1. The industry has solved it!

    You need advice and we are not prepared to give it.


    There – that wasn’t so difficult was it.

    Ian Coley

  2. The ‘industry’ has already addressed it. The PFS has advised its members not to help insistent clients. Why? Because the regulatory regime is unclear…

    Yes, it is up to the profession to find ways to deliver on client expectations but it can only do so from within a stable and predictable regulatory environment.

    The risks at present are too great for most advisers. The result? Clients driven to less scrupulous advisers and when it goes wrong the sensible ones will pick up the bill with the FSCS.

  3. It cannot be he responsibility of the industry when the FOS will rule against the adviser when there are complaints. We require a set of guidelines from the Regulator and immunity from claims at a later date. The Chancellor introduced pension freedoms, the buck cannot be passed to the industry to make it work when the FCA and FOS will not back us up.

    Meeting client expectations would suggest doing what they want, then paying for their mistakes at a later date, a win-win situation for the consumer. I will look well beyond the TVAS report, in fact I will not even let clients see it as it is too technical to understand, but once my decision is made it is final, to protect all parties.

  4. The industry didn’t create the problem!!!!

  5. As already stated the industry has already addressed the issue, we are not signing for the liability. This clearly has upset the Government and regulator who yet again seeks to deflect the problem and blame away from themselves. You cannot sit on the fence and expect the industry to act knowing that when the outcomes are poor, complaints start rolling in, we know you will seek to have us pay, for what we already knew to be a poor outcome.

    This is a roundabout as an industry we need to get off. The FCA states one thing, the FOS enforces another and the regulator supports them as consumer groups apply pressure.

    Until the FOS, FCA and PI can provide clear guidelines, why would any adviser sign against their advice and take the liability? We have no long stop, no rights, all we can do is refuse to transact. This is are only option and frankly the most ethical. Where are the regulators ethics in all this, why are they not standing up to consumer pressure. Instead they have taken the easy route, agreeing and no trying to gain a means by which poor decisions to be pushed through.

    The solution will be that DB transfers will be allowed without and adviser sign off. They will have to find a way around the trustees obligations to deliver this. We will then see articles that we the advisers failed the consumer as we refused to advise, which is far from the truth, what we did was to refuse to transact against our advice.

  6. As others have said, the industry has already solved this problem, that was not of our making.

    “I’m a highly qualified, professional adviser. I’ve done a painstaking, bespoke review of your financial position and I am not recommending that you do [xxx – this is wider than simply decumulation] because I don’t believe it’s in your best interests.”

    It’s fairly simple – if it’s suitable, we’ll recommend it. If it’s not suitable, we won’t transact it – regardless of any disclaimer.

  7. I think that’s fair comment from the FCA and one I am willing to live with; personally I have never, in 25+ years had an insistent client, and even if I did I think I would know by now, exactly how to deal with the situation, without having to trawl through a 50 page COBs document !

    Its a pity the FCA cant show a little more common sense in other areas !

  8. Until the FCA raise their heads above the parapet and actually state that any insistent client is on their own and ENFORCE the FOS to do the same, there will never be any workable solution for this. How can the industry sort it when the only way to give the buyer of such a product what they want is to put themselves on in the firing line in years to come? And more to the point, why would they do such a thing? It is planned suicide.

    Still the few rogues that are out there will get stuck into the insistent client and when it goes wrong, they will fold leaving us a nice big increase in the FSCS bills.

    Only in this industry is the regulator so clueless about what goes on in the real world & so gutless to actually stand up and say: “We can only protect the consumer so much. If they go against advice and it turns out to be detrimental, we are sorry but your were told not do it.”
    “We have also told the FOS not to look at or rule on insistent client complaints.” That would solve the problem once and for all.

    Come on FCA for once in your existence do the right thing by the industry. Publicly state that you, The FOS AND the FSCS are to completely exclude any consumer who acts against the advice they are given from the protection that you give. At the end of the day you are there to protect retail clients from being screwed over by the odd rogue adviser firm, not to try to protect the consumers from being thick as sludge.

  9. Happily, we are not obligated to conduct business if we wish not to so…there you have it FCA, it is solved.

    Pity poor old Osborne – he’s going to have to come up with another plan now

  10. Here is my advice Mr Client. If you wish to go against it, DIY. End of.

  11. Had an insistent prospect call me the other day. Felt sorry for his predicament (but didn’t 100% agree with his plan to resolve his dilemma.. Made short term sense but left him open to issues longer term). As it is quite clear that the FCA are customer ‘outcome’ focussed (see the above statement) and I do not possess said crystal ball and prefer to go to work with my backside in my trousers and my savings and home safe from any would-be pariahs (not that this chap would become one, but who can say?), I could not assist him with his requirements. Advising on matters such as pensions is now a leap of faith and this lack of direction underlines that fact.

  12. Police interviews have been recorded for decades as a signed confession was shown to be worthless.
    Insistent consumers (they are invariably NOT clients, they are customers)meetings and calls should be recorded and form the demonstration of intent of both parties, i.e. consumer and adviser. Tone of voice and emphasis is lost in the written word, especially when the consumer doesn’t read the suitability report and takes the salesman’s word for it.

  13. Ralph Patterson 26th April 2016 at 9:46 am

    There is no such thing as an insistent client, only an adviser who allows him/herself to be bullied/cajolled/persuaded to recommend something that they can’t defend. If it’s not defensible then don’t do it.

  14. Stuart Rathbone 26th April 2016 at 10:40 am

    Best laugh I have had so far this year.

    I love watching all the dissembling of the apparatchiks trying to herd free agents into doing their masters bidding against the free agents best interest. It may work for a time on old style command economy like Uncle Joe’s but in a relatively free capitalist economy such as ours not so much.

    As you sew so you reap.

  15. At a recent Thematic review when asked about insistent clients ( I have dealt with very very few in my long career) I advised the fca idiot ( who later didn’t know what an EIS was) that since we have had guidance from the PFS and our own compliance support to say no, walk away, we have dealt with none. Was advised that as far as the fca was concerned it was perfectly acceptable to transact insistent clients. When asked about the PI insurers, professionally bodies and FOS view with not agreeing I received a remark which quite was along the lines not my problem. So those that do, you roll the dice and take your chance. Eh oh not long until retirement.

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