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Lobbyists predict long wait for a long stop


Lobbyists predict efforts to pressure the Government into introducing an adviser long stop are unlikely to succeed because of the financial services industry’s tarnished reputation.

Last month, Tenet launched an epetition calling for the introduction of “fair liability for financial advice”, and the removal of financial services legislation which allows the Financial Ombudsman Service to consider complaints regardless of when the advice was given.

If it reaches 10,000 signatures the Government’s petitions committee can recommend an inquiry or seek a response from the relevant minister. The House of Commons backbench business committee will consider the topic for debate in the Commons if the epetition reaches 100,000 signatures. It has achieved nearly 3,000 so far. 

Portland partner George Pascoe-Watson says: “No political decision-maker of any political colour will be instinctively attracted by this idea so the sector needs to be realistic about the time and effort needed to scale the mountain. The work probably starts with reputation building.”

Writing in this week’s Money Marketing, The Open Road chief executive Graham McMillan says “extremely negative perceptions” of financial services as a whole will make the campaign a “struggle”.

He says: [The campaign] will have some supporters, particularly among some Conservative MPs who support the IFA sector strongly and who will probably raise it in Parliament. But Labour will accuse them of wanting to help their friends in the City. If the Government picks it up, then the same charge will be levelled at them.”

Lansons director Ralph Jackson says: “Advisers’ point has legitimacy and trying to get a debate going is perfectly laudable, but success in the short-term does not look likely.”


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

  1. The message which needs hammering home to regulators, MPs, The Treasury, the OFT and other determining organisations is that the vast bulk of the negativity stems from the banking sector and a few large organisations.

    The typical adviser provides an essential service which buttresses both the healthcare and the pensions system.

    Imagine the impact on means-tested benefits if consumers were not advised to arrange life , critical illness and income protection products.

    Consider the impact on pension credits if advisers did not encourage pensions saving.

    Given this, does it not make sense, as well as being fair and equitable, for advisers to receive the same legal protection as other industries?

    The consumer protection pendulum has swung too far the other way. How about protection for advisers?

  2. In the meantime (many years?) IFAs should ensure they don’t face a lifetime of unlimited liability. Sole traders (and there are still some) should Incorporate immediately. It won’t change past business, but it puts a lid on future liability, which will end for the IFA when the company is sold or wound-up.

    It’s always surprising how the cowboys out there use this to advantage year after year but some of the more decent types still persevere Unincorporated and risk getting a claim when they are aged 81. I really don’t understand them.

    Give yourself some financial advice – go Limited!

  3. The message which needs hammering home to parliament is “why do they allow an unelected, unaccountable, out of control quango, to ignore the rule of law”
    Advisers should not be asking for the introduction of a longstop, rather they should be asking parliament why advisers are being singled out for unfair and inhumane treatment. Even Abu Quatada had legal rights whilst in the uk.
    We should not have to beg for something which is legally ours.
    If Parliament used the same logic the regulator uses when denying us this right, the same rule would apply to MPs, Doctors, Architects, teachers, town planners and regulators.
    Where is liberty in all of this? or are they only interested in illegal immigrants and terrorists.

  4. It is quite galling that the individuals who gave bad advice whilst working at banks etc. in effect benefit from a long stop as its the bank that picks up the tab. Meanwhile IFA’s have this opened ended liability hanging over them until the grave.

  5. Alex – please get your facts right. The FCA are acting within the law.
    If you disagree argue your own case, do not compare yourself with others and instead get on the back of your MP to change the law.

  6. @Sam
    I am not comparing myself to others.
    My facts are correct. The FCA are NOT acting within the law.
    Why should I “get on the back of my MP”, who could not give a toss? He is too busy flipping his property and adding up his expense receipts.

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