No doubt the furore on the post-Maxwell report will continue for some time, notwithstanding the changes in legislation and working practices during the last 10 years. Even now, those who are so minded could still perpetrate a fraud – albeit that their actions might be more quickly curtailed.
Speaking of rules, there are the original SIB principles that seem set to be enshrined in the FSA's new rules and it is interesting to note Principle 9: “A firm should organise and control its internal affairs in a responsible manner, keeping proper records and, where the firm employs staff or is responsible for the conduct of investment business by others, should have adequate arrangements to ensure that they are suitable, adequately trained and properly supervised and that it has well-defined compliance procedures”.
Even though there are many faults within the rule book, most would agree that this represents a commonsense approach for the smooth running of a business.
In these days of stakeholder charges, we will see fewer financial organisations and yet more rationalisation. What is unacceptable following change is the resulting arrogance of some of these organisations and the way that investors are being treated. If one looks to morals and ethics, which do not necessarily feature as prescriptive rules, the onus is on every single individual working within the financial services industry to take on board the responsibility that every one of us has to look after other people's money and the expectations placed upon us.
What some of these organisations must reflect upon is that, whatever the size of the marketing budget, sooner or later their actions will be rumbled. While to an extent the degree of choice is becoming more limited, there are plenty of organisations in the business of providing a service to clients, many of whom merit support.
As an IFA, when using any of these organisations, there does need to be an efficient back-up in order that the process of working together becomes a partnership with the common goal of doing a good job for a client.
Changes that are made just to fit a revised corporate structure – with clients' interests damaged in the process – are not acceptable. The recent proposals for rationalisation within the Perpetual offshore range are a good example of this. Certainly at the outset it appears no thought has been given to the plight of investors incurring a tax charge as a result of their proposed action.
These are, of course, changes that come from the same Invesco where we sent a request on behalf of a client on February 6 for withdrawal of £1,500 from a Pep so as to repay a credit card bill. They managed to lose the first letter and then a second.
Further chasing provided an assurance that we could use a fax – and then subsequently that we could not. As at the beginning of April, we have still not had confirmation of the deal but I understand that the transaction actually took place about March 23.
All in all, after what can only be put down as complete incompetence, the client has lost because his instruction was not carried out on time before the market fall. He has had to pay interest on a credit card balance and we have incurred thus far a considerable amount of administration costs – yet still the matter is not resolved.
This is not the first occasion that we have had admin difficulties with this company and, unless there are some sound explanations, one has to vote with one's feet until confidence can be restored. I am sure everyone has similar stories.
Looking at other organisations, what, for instance, will be the case with Henderson and its Technology Trust should it move to a discount before clients are able to effect a transfer to the Oeic? Was any thought given to investors when the move was decided?
Scottish Widows is a name that seems to feature regularly in the columns as an office hell-bent on destroying any IFA relations. We have at least two clients who probably missed their Isa deadline as a result of monies not being issued as instructed. One payment was from the sale of loan notes and another from a very poor performing Lloyds-TSB unit trust.
With an ever-increasing paper chase, there is always the possibility of mistakes – and I would not claim to be perfect. There do, however, seem to be companies where the problems are systemic and when providing an advisory service to clients, time costs money. In the brave new world, it is easier not to give any business to those organisations not up to the mark.
Nick Conyers is a director of Pearson Jones