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Profile: Adviser Christina Clegg on getting tough with DB transfer touts

Like many advisers who have been following the twists and turns in the defined benefit transfer saga, Christina Clegg is concerned. The director of Christina Clegg Financial Planning Services is not worried about her firm’s own activities in this market.

However, she feels the behaviour of some others gives advisers in general a bad name and wants the regulator to take a tougher stance on bad practice.

“It worries me when I read about so-called ‘referral’ companies like Celtic Wealth touting for British Steel pension business. Firms should not be allowed to cold-call and promote services in this way, in particular for pension advice,” she says.

Clegg waits for clients to come to her with enquiries and there are no third-party arrangements in relation to attracting DB transfer business.

“I don’t understand why any firm would want to use a broker with all the suspensions going on.

“It worries me, as there are a lot of underhand transactions going on that give advisers a bad name. But we can comfortably sleep in our beds knowing we are doing it right, that we look at each case on an individual basis and we’re not actively looking for this type of business.”

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Clegg’s firm has two websites. One promotes its regulated activities as a financial planner, while the other markets estate planning services, which are not regulated, but points visitors in the direction of financial advice. “There are different rules about what you can and can’t do. So, we decided to split the two across different websites.”

Having the risk and compliance expertise of her husband, business services consultant Phil Clegg, on board has been an advantage. As an expert on the legal side of marketing, his contacts built the websites and he ensures the content falls within the rules and regulations. This has been invaluable to the firm, particularly in the last 18 months since it became directly authorised.

The estate planning services cover wills, trusts and lasting powers of attorney but rather than compete with solicitors, Clegg works with them.

“We liase with a solicitor and they complete my wills and trust planning. That’s why we started the service; I don’t write wills myself but I can provide the service at a lower cost for my clients.”

Many advisers have firm views on what is the fairest way to charge clients for their services and Clegg is no exception. She believes the industry needed the big shake-up RDR provided but is concerned about the advice gap brought about by the move to fees.

“Everybody should be able to get advice but many IFAs only work with clients who have more than £100,000. I recently met a young gentleman who saw me with his mum and was considering investing £25,000. It’s getting to the point where you have to say to clients: does this warrant you seeing me?”

When it comes to the best way of charging clients, Clegg prefers flat fees.
“Your fee is about the time you spend on clients and it shouldn’t be just because a client has more money they pay a higher fee. From a regulatory viewpoint, the complaint about flat fees is that advisers charge too much at the smaller end – but the work is the same.”

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Clegg had no burning desire to work with money when she was younger and joined financial services through a youth training scheme with HFC Bank.

“I didn’t grow up wanting to do this or that- although I played with my mum’s Littlewoods catalogue paperwork. She had a grey wallet full of invoices – I don’t know if that had anything to do with it.”

She then moved to a loan company, Avco Trust, which specialised in secured and unsecured lending. “I was taken on in a reception role at only 18 or 19.But I was thrown in the deep end to ‘rep’ because they were short staffed, lending and collecting loans. It turned out I was very good at it and never became the receptionist.”

Working for a loans company meant Clegg got to see first-hand the financial difficulties people can get themselves into, especially if they have not had some sort of financial education or advice. Sometimes the situation ended in going to court and repossessing homes.

“Financial education is lacking in schools and colleges; nobody is sitting down and explaining financial issues to kids. It is easy for someone to get a first wage packet and spend it, then be influenced to get payday loans. They don’t understand the mess they are creating in the future.”

Clegg moved into independent advice from the tied sector, having become “sick and tired of selling products that were flavour of the month” rather than suitable for the individual’s circumstances.

Although she is, on the whole, happy with the financial services sector we have now, she does have some concerns around auto-enrolment.

“Auto-enrolment is great, we have some form of compulsion at last and it will be better once the increases come in for contributions. But I do worry there is a major tick box exercise with default funds.

“It is one thing setting up a pension with your employer but this is the longest saving plan you have throughout your working life – how often do we check where it is invested? I find the majority of people only check when approaching retirement, which in most cases is too late.

Should savers be nudged to review default funds?

“A 20-year-old is ticking the same box as a 50-year-old, but the 20-year-old is probably not taking enough risk and the 50-year-old is probably taking too much.

“We need to change people’s perception about not just ticking the box; it’s about looking at the fund you’re in. People don’t know what they’re invested in and they are not getting advice.”

Five questions 

What’s the best bit of advice you’ve received in your career? 

To treat clients as if they were members of your family. 

What’s keeping you awake at night? 

That there are not enough hours in the day. I’m always thinking ‘I didn’t do that’ or ‘I have to chase that’.

What has had the most significant impact on financial advice in the last year? 

The legislation changes to pensions in relation to the new flexible access. It’s creating more chatter around what people can and can’t do with their pensions. 

If I was in charge of the FCA for a day I would…? 

Cap advice fees. We are astounded at what some firms are charging. 

Advice for new advisers joining the profession? 

Get to know your clients and understand who they are. 

CV 

2016-present: Director and IFA, Christina Clegg Financial Planning Services 

2013-2016: Self-employed IFA, working with Go IFA 

2009-2013: Self-employed IFA, working with Stirling House 

2003-2008: Financial adviser, Halifax 

2000-2003: Corporate sales, Abbey (now Santander) 

1994-2000: Financial adviser, National & Provincial Building Society 

1989-1994: Assistant Manager, Avco Trust 

1986-1989: Trainee, HFC Bank 

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