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Neil Liversidge: Mistrust shows how public are coached against IFAs

In future, I shall delete all emails announcing surveys alleging advisers are not trusted by the public. They are deceptive and demoralising drivel. Who answers surveys anyway?

When approached by survey-takers in the street I employ the kind of high-speed body-swerve of which most professional footballers would be proud. Those conducting telephone surveys are told they need to pay our hourly rates. If they do not pay, we do not play.  Anyone answering surveys for free either has too much time on their hands or is plain daft, or both.

In a recent column for Money Marketing, Nic Cicutti quotes the FCA’s Financial Lives Report findings that 13 per cent of those who received advice in the last 12 months claim to feel they were missold a pension or investment product.

I have inserted the words “claim to” because what people actually feel and what they claim to feel these days are very often as different to each other as a white knight to a black bishop.

Some years ago, a consultant of ours came in one morning utterly distraught. The previous evening he had opened a mortgage misselling allegation from a claims management company dating from his sole trader days. The complaint was of the pre-ticked boxes variety. I reviewed it and could find nothing wrong with the work he had done.

He had remortgaged Mr H, a reckless spendthrift, turning his negative cashflow positive, thus averting repossession. Gathering the staff around with my phone on speaker I phoned Mr H to ask why he was unhappy.

“I’m not at all,” he said. “But I was looking at losing my house so if I can get some free money I’m going to do it. The claims firm says his insurance will pay anyway.”

At this point, I explained he was on speakerphone with four people listening and that the statement he had signed off amounted, provably, to a pack of lies. I then explained the law on fraud by false representation and confirmed it all to him in writing. No more was heard of his claim.

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Another prospective client, Mrs C, wanted advice on whether she was due compensation from Halifax. Being unsure of its sales process around attitude to risk, Halifax had contacted her to ascertain whether any misselling had occurred, though her investments had outperformed handsomely.

We explained Halifax was offering her the option to cash in and take her profits without penalty, or alternatively to remain invested knowing the funds might fall in value in future. There was nothing to compensate. She was most unhappy to hear this, thinking she should be able to take her profits plus a cash bonus “compensation” payment.

Surveys reporting alleged mistrust are, in reality, reflecting how the population has been coached by CMCs and so-called consumer advocates to game regulation dishonestly. While most people are innately good, reasonable and honest, a proportion are mean and greedy, unreasonable and dishonest. Or just plain nutty. Or all of the above.

I have not done a survey, so I do not know what proportion of the population that is – but if it is 13 per cent, I would not be at all surprised. Mr H and Mrs C are undoubtedly part of it.

Neil Liversidge is managing director of West Riding Personal Financial Solutions



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There are 21 comments at the moment, we would love to hear your opinion too.

  1. Congratulations Neil on yet another incisive article! Dick Carne

  2. It’s the part that makes the job depressing!

    I’m afraid that in their rush to see ‘fair outcomes’ for consumers, the regulator et al make us an easy target for liars and thieves, as they literally have nothing to lose, as they are not made accountable in law!

    As a slight aside, I’ve just seen a PPI compensation payment for commission received (double dip) of £500 rewarded with additional interest amounting to over £1,600! No sympathy for the provider but nevertheless it is odd and does encourage a claims culture (the chap had already been paid compensation for the original sale, but he had nothing to lose by bringing a further claim and everything to gain… even he was staggered).

  3. Clearly a man after my own heart Neil. The last “complaint” we had was from a publican over a low cost endowment. It was timed out anyway but some time later I spoke to the publican on another matter and asked him about the claim. He told me that one of his customers during the course of a friendly chat had asked him if he had a low cost endowment. On being told that yes, the publican did have one, the customer produced a form and said if he signed the form they might be able to get him some money. That was the sum total of the conversation. No other discussion beyond advisers name. And the customer subsequently ticked all the boxes-the publican just signed.

    I too swerve from the clipboard holders in the high street and don’t find time to answer telephone surveys.

  4. It is sad. We’ve just taken on a young economics graduate with a keen interest in the profession and yet he still had his fellow graduates asking if he was going to ‘rip ff old grannies’

  5. Sadly much of what you say is true, but I think advisers also bear some of the burden.

    Too few advisers are selective with those that they are prepared to take on. Not enough advisers receive a significant amount of work from professional connections. An introduction from a professional connection immediately puts you on a stronger footing with a client, who are already used to seeking professional advice. Dealing with referral generating firms or web sites or just accepting anyone who comes through the door has the potential to put an immediate strain on your PI Insurance.

  6. Good article and totally agree.

    I have said for years there needs to be consequences for those that seek to defraud. We are told this will not happen as it will put genuine complainants off!

    A clients wife recently employed another IFA to complain against me, my third complaint in my career of 35 years. She stated I had not offered her husband life cover to protect a mortgage completed way back in 2004. What she failed to disclose to the other IFA was she was in receipt of half his pension, £15,000pa, which the client had stated would be enough for his second wife to continue paying. This made the situation look much worse than it was to the new IFA. I also had a signed disclaimer from the husband refusing life cover and notes documenting she was at the meeting when he refused. The client has a good friend, I could not attend his funeral as the complaint letter arrived the day before. This person knew she had no claim, had been reminded of the meeting, what her husband had stated, then lied and manipulated to another adviser to try and gain financially.

    The issue being she purposely mislead both the other IFA and the FOS. Was there any come back on her? No, other than the other IFA sacked her.

    When you can complain, mislead and out right lie without consequences the system is not fit for purpose.

    • @Martin Evans
      I quite agree with your last statement yet I remain hopeful that the CMC’s largely responsible for this will be struck off by the FCA when regulation falls to them in 2019.Otherwise the criminal law of deception is itself not fit. Reform of ombudsman processes should also feature in any review to ensure their conduct does not unwittingly encourage CMC’s with dubious practices. .

  7. False news complaints should have compensation paid to the adviser I say. Well done Neil, a great article

  8. Has anyone seen the number of complaints against Lloyds LloydsTSB HBoS etc., and their subsidiaries ? Has Lloyds paid out the compensation in full yet ?Most good advisers when they find an error or omission rectify it immediately. They know how difficult it is to find good clients – and keep them.

  9. Making sweeping and smug claims that people who take surveys are ‘daft’ or that people don’t feel what then claim to feel is probably exactly the arrogant behaviour people associate with financial advisers and might justify these survey results.

  10. Neil’s words will resonate with the vast majority of advisers.

    Of course, one reason for the surge in combo claims is the ease with which anybody can level a complaint – true, false or fraudulent – to the FOS.

    There is no comeback on the complainant or any CMC that might be involved.

    And, Duncan Jones, the FCA told me that it had no plans to vet CMCs but would grandfather them across from MOJ authorisation.

    A process diametrically opposite to the RDR privations.

  11. Surely writing a piece like this one would expect responses, just because they don’t necessarily agree with the writer’s point of view shouldn’t mean that the person then get’s sarcastic abuse.I agreed with most of the article when I read it but re read it in a different light following the the response of the writer to Matt Amber’s comments. I don’t know either of them by the way.I hope my comments don’t warrant the same reaction.

    • I don’t know about you Martin, but every day we get people phoning us wanting us to participate in surveys. None want to pay for our time, all waste the time of my staff who have to answer the phones, and a lot lie to get past my staff to me so they can waste my time, pretending to be prospective clients or whatever. Survey companies make money out of what they do. That’s fine because everyone has a right to make a living. Equally, though, they should expect to pay the hourly rates of those they want to participate in their surveys. In the past when I was softer than I am now I’d occasionally agree to give 25 minutes of [my] time” which inevitably turned out to be 20. No more. I work long hours and prefer to spend my time profitably looking after my clients. Anyhow, the point of the article was: 1. I refuse to be demoralised or depressed by unreliable drivel anymore; hence I shall delete such emails unread. I hoped that this example might be followed by a few of my fellows who might thus be helped; I know many find such surveys demoralising and depressing. It’s not good to forever have some fool telling you you’re part of a lousy profession full of shysters when you know in reality it’s actually a great one in which 99% of those concerned really bust a gut to help their clients. This is a profession where the maintenance of high morale is key to success, as you must surely know. Professional depressers are an unwelcome intrustion on my day. 2. Surveys such as the one in question are unreliable because the ‘safe play’ for an awful lot of people these days is the dishonest play, for which we have the CMCs, compensation culture and lack of any consequence in most cases, to thank. As Pauline has very helpfully pointed out, the response rate was 6%. Complainants, as we know, are motivated and never miss a chance, so 13% of 6% equates to 0.78%. That’s just one person in every 128 of those asked who took the trouble to reply claiming to feel they might have been mis-sold. Does the FCA present that as the excellent news it is? No. Why? We know why. They might be forced to re-deploy resources more usefully. As for me being sarcastic with Matt (And I was, but I absolutely dispute that sarcasm necessarily constitutes abuse, which I reserve for the likes of Donald Trump), he opened by calling me arrogant. Maybe I am. Do I care? No. But if somebody wants to take a pop at me, I just LOVE the occasional joust. Have a nice day Martin. And I mean that. Not sarcastically.

  12. Good article, Neil. Unfortunately the current FOS complaints system is rigged against the advisers – the clients have no risk by bringing even fraudulent complaints on advisers. i.e. the risk for potential financial gain is worth it.

    There needs to be some form of disincentive, or even a nominal fee, on the client’s part should complaints be rejected. In a REAL court, the loser pays the court fees and typically solicitor fees too. Fraudulent claims should be followed up with the force of the law.

    But this would never be implemented as the FCA/FOS/Treasury don’t really care about advisers.

  13. If people are caught deliberately lying to gain money this is fraud and should be treated as such. It might be an idea if complainants were advised that they will be reported to the Police should they be proven to be lying. Just a thought.

    • Hi Tim,
      That was part of the 4 year battle I had with the FSA and FCA you might remember when I included mention of the Lonsgtop in our terms of business. The wording they accepted in the end included mention of refering to the Police where I believed fraud had been attempted.


      Fraudulent Claims
      It is not unknown for people to be encouraged to make fraudulent inaccurate or frivolous complaints. Whilst we do not of course ordinarily charge for investing complaints, there are exceptions. Fraudulent, Frivolous or Vexatious complaints may raise unnecessary administrative burdens for both firms and the FOS alike. In these circumstances, we will to seek to reclaim our time cost and any third party costs and expenses reasonably incurred as a result of defending complaints of this nature.

      Our terms exclude any rights or contracts conferred under the Third Parties Rights Act 1999

      Please be aware, if you make or assist with a complaint about someone else (or us) and we believe it to be fraudulent, we may be legally obliged to report you to SOCA (or any successor), the Police and the firm to whom you have made what we suspect to be a fraudulent complaint.

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