On the front page of Money Marketing of April 15, I read with astonishment and mounting disbelief the words of Cliff Lockyer about the closing down of Berry Birch & Noble Financial Services. He says: “We have acted not just responsibly but, I think, amazingly generously. We have saved IFAs and the insurance companies millions.”
In the article on page two, he also says: “We are sitting ducks when it comes to complaints. When we open up the file, we often find there is nothing there. The fact that there has often been no file-keeping has led to lots of claims.”
Let us be completely clear here. What Lockyer appears to be saying is that the company has been trading irresponsibly and shabbily for years, documenting things very poorly, if at all. I would suggest that what actually leads to claims is not a lack of file-keeping but bad advice. What bad file-keeping leads to is having no defence against the claim and therefore losing. He thereby appears to be condoning the situation that the company has, by his own admission, given bad advice for many years. This has generated lots of complaints and the company finds itself in a situation without the documentation to defend these issues.
His answer to this is to close the company and walk away from the liabilities. He then has the cheek to say that he thinks he has acted responsibly and generously. The method by which he has saved himself money means that the customer will now find it much more difficult to complain.
In fact, if the client does have the persistence and ability to find his way to the correct complaints' mechanism, he will still have a valid complaint, which will be dealt with by the FSA. He may then be compensated through the Financial Services Compensation Scheme, the cost of which will ultimately fall on me and all the other poor, innocent IFAs out there.
So, far from saving me money, I feel he has dumped part of his liability directly on to me. Thank you very much, Mr Lockyer. Responsible and generous? I think not.
The fact that the FSA allows this procedure and permits the person perpetrating it to carry on running a financial services company staggers me.
How we can expect to be treated as a responsible profession, with such tactics going on, is beyond me. Far better that their poor business practices actually did close down the responsible party, rather than spread the load across the rest of the industry and in the process do more to tarnish the general reputation of financial services.
Just think what fun the Sunday papers would have with a story like this.
Marshall Bryant, Croydon