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Gill Cardy: Providers need to regain advisers’ trust

Advisers play a key role in introducing the right clients to product providers, so the least they could do is be straightforward in their dealings with us

Cardy Gill IFACentre MM blog

This week I have been looking at some of the provider blurb that I have been collecting at recent conferences and seminars: VCTs with and without capital preservation, existing funds of funds and new fund launches, risk-rated asset allocated passive portfolios, equity income funds, and emerging income funds.

What is the point of even looking at any of this material? In fact, what was the point of even going to any of these events in the first place?

We now find ourselves in a position where product providers (who are regulated firms) and their key personnel (who are regulated individuals) use their knowledge and expertise to design solutions which may help our clients to meet their financial planning objectives. Or not.

We attend the presentations, and meet the key people. Occasionally they even let us meet some of the most uncharismatic individuals. They could be a liability in the marketing department, but they are the experts, the ones who really do know what they are talking about, ultimately the ones we are going to decide to trust with our clients’ assets. Or not.

Yes, we do know the primary objective of marketing is to persuade, and that your sales teams are incentivised to discuss (sell) certain products over others.

We know that providers are going to put the most positive spin on their product offering, and are unlikely to tell us not to buy. In fact, I still remember clearly the fund manager who with spectacularly unusual honesty said that whilst the long term story was good, even he would not invest his own money at that moment.

I also remember the fund manager who privately told me, shortly before winning an award for fund performance, that now he had three years under his belt, and an award to boot, inflows would accelerate dramatically, but that the vast majority of investors would have missed the best fund performance he could generate.

Product providers like advisers. We give them unprecedented access to the people with the money they want to invest. We build up the trusted relationships with the investors with the assets from whom they want to derive profits. We provide them with that most valued marketing tool, the third-party endorsement.

Relationships of trust are being destroyed wherever we look: banks, food producers, journalists, MPs, church, care homes. And yes, investment managers too.

So we want them to do something for us. Tell the truth. Behave with integrity in product design, marketing, promotion, administration, compliance. Even more basic, keep to the rules.

Every single one of us is regulated. Advisers are expected to abide not only by the rules, but also by a code of ethics. Advisers (and our clients) should be able to trust that you do too.

And then I won’t look at all that product information and wonder how much of it is true, how much is spin, or how much is lies before sending it straight to recycling because I simply can’t tell the difference anymore.

Gill Cardy is managing director of the IFA Centre


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There are 6 comments at the moment, we would love to hear your opinion too.

  1. Providers to REGAIN trust? Did anyone ever trust them in the first place? True some are a great deal better than others, but much of the grief that we advisers have suffered over the years is precisely because we trusted the buggers in the first place.

    As I tell my clients “I am an intermediary – which means I stand between you and the provider to do my best to ensure you don’t get ripped off”.
    I don’t want to write an essay of my experiences but I would only say that some of the very worst perpetrators for chicanery have been the likes of VCTs and BES who have used the lure of tax relief to scam far too many for far too long.

    What really brasses me off is when providers bleat about IFAs regaining trust. I and I know many others have never had such a problem. It is merely the providers trying to saddle us with their own issues and problems.

  2. Anthony Rafferty 7th March 2013 at 2:39 pm

    Is this your resignation note Gill? I’d be embarrassed to be a member of an organisation who’s managing director was so bitter and out of touch. It’s one thing trying to be newsworthy by being provocative, but this is outrageous!

  3. Stephen Rosling 7th March 2013 at 2:46 pm

    And, yet again, the customer is in the middle of a squabble between the providers and the intermediaries.

  4. When a product doesn’t deliver to a client’s expectations is the provider, adviser or client at fault?


  5. Gill is trying very hard ona limited budget to promote the importance of Independent advice (nothing wrong with restricted provided it is made clear to the client) so I do wish critical posters would have the common decency to use their OWN names or even a pseudo name so we can identify and ignkire habitual idiots! I don’t always agree with Gill, AlanLakey, Nic C, Neil L and many others but I have the decency to debate in public or argue in private rather than denigrate facelessely on a public forum.

  6. When providers can design products that do what they say it can do, only then will change occur and we are able to trust them to meet clients expectations.

    A year ago I did a comparison between best WP fund over 5 and 10 yrs and the best UK managed fund over that period.

    Guess which one outperformed the other?

    Yup WP!
    I Didn’t like the MVR, but hey, security long term comes at a price.

    So why can’t providers design funds to meet the need for growth whilst providing a high degree of capital security?

    And before I am asked the question, over the same period, it beat inflation as well, maintaining the value of the investment.

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