The idea of “insistent clients” conjures up the notion that long-standing clients will somehow morph into unruly teenagers who won’t do what they are told.
Clearly that is not the case. But neither are advisers jumping the gun here.
Advisers are right to be agitated about the lack of clear regulatory guidance about how to proceed when someone wants to carry out a pension transfer which is unlikely to be in their best interests.
Privately, Money Marketing has been told that regulatory bodies are themselves frustrated about how the treatment of insistent clients complaints has been characterised in public, and that messages meant to reassure advisers have been distorted.
And yet as advisers’ anxieties grow, so too do the concerns of the companies ultimately standing behind the advice – the professional indemnity insurers. On top of the shock news that life and pensions advisers will be hit by a £100m annual Financial Services Compensation scheme levy, advisers now face the prospect of fielding any insistent clients complaints without the backing of their insurers.
The heated debate around insistent clients boils down to two key themes. Firstly, we seem to have found ourselves arguing the toss once again about how much weight execution-only disclaimers actually carry. For what it’s worth, previous experience tells me the Financial Ombudsman Service is likely to look at the spirit in which such disclaimers were signed, rather than the mere fact the document exists.
Secondly, what should the role of the adviser be in insistent client situations? How much is an adviser supposed to safeguard clients’ interests, rather than simply facilitate their wishes? Should advice firms adopt the role of parent, where no means no, or a good careers adviser, where choices are set out in the most meaningful way possible, with the ultimate decision left to the individual?
There will be advisers who will not want to touch insistent clients with a bargepole, and they will have their own good reasons for doing so. There will also be advisers who proceed, after much time invested in explaining the options.
Each camp will be able to argue robustly why their chosen course of action is “best practice.” But there may be something to be said in favour of moving away from an “adviser says no” mentality in order to work with clients on the best way forward.
Natalie Holt is editor of Money Marketing – follow her on Twitter here