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Nick Eatock: Advice regulation will kill off the email


It is hard to imagine a world before email, although it was only 20 or so years ago it started to be widely used. Email is a wonderful thing: fast and convenient, as well as useful for providing an instant trail of communication that can be stored and accessed many years later. However, this ease of use also makes it a target for organised criminals, and advisers that use standard email to communicate are putting themselves in the front line of this threat.

Reports of business-related scams using email are becoming all too frequent. In January, a chief executive of a French company lost €500,000 to criminals because her accountant received emails that looked like they came direct from her instructing the transfers to be made.

The FBI has recently issued a warning that this type of scam is on the increase, with $2.3bn having been transferred to criminals in the last couple of years. The scam works because the fraudsters are able to infiltrate unsecured emails and send messages that look like they have been sent by the genuine owner. Scary stuff, particularly if your business involves moving money around for clients.

Fraud using email is nothing new but criminals are using increasingly sophisticated methods that have the potential to hoodwink even the most vigilant users.

Advisers, in particular, need to be wary of using standard email to communicate with anyone linked to their business, not least because the FCA is very concerned client data is stored and shared securely.

The good news is there are plenty of technical solutions that offer secure messaging for businesses. However, it is important to choose a trusted provider of this type of service: free-to download apps that promise total messaging security should be viewed with extreme caution.

With cyber-crime increasingly making the headlines, it is tempting to think that sticking to the traditional ways of communicating with clients is the safest way to do business. It certainly has its merits but in this digitally evolving world it is not really a feasible solution.

For instance, once Mifid II comes into force in January 2018, there will be a requirement for advisers to record all telephone calls with clients, whether from a landline or a mobile. Although Mifid II proposals suggest all face-to-face meetings should also be recorded, this has been ruled out by the FCA… so far.

With a growing need to show proof of what has been discussed with clients, technology that enables secure communication is likely to become an essential bit of kit for advisers.

Of course advisers will always want to meet clients in person but thanks to increasingly sophisticated technology, secure video-led conversations via laptops or mobile devices will become more commonplace, with documents and information easily viewed by both parties during the conversation.

Importantly, these will be recordable, so if – or when – having a total record of all conversations becomes a requirement in law, advisers will be well placed to meet the challenge.

A combination of video-enabled technology, tighter regulations and the need to work more efficiently is likely to kill off traditional meetings with clients, even the very wealthy ones. After all, clients with large assets to manage often have the most complex needs, which mean there is even more at stake for advisers in ensuring they have a water-tight trail of conversations to fall back on should it be needed.

With so many technological advances designed to save advisers time and provide peace of mind in terms of security and compliance, at just 20 years old, email as a tool for transacting business is looking distinctly old-fashioned and best left to the phishermen.

Nick Eatock is executive chairman at Intelliflo



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There are 3 comments at the moment, we would love to hear your opinion too.

  1. Martin Bamford 25th May 2016 at 12:31 pm

    “For instance, once Mifid II comes into force in January 2018, there will be a requirement for advisers to record all telephone calls with clients, whether from a landline or a mobile.”

    If this is the case, another good reason to vote Leave on 23rd June! Nick, can you provide the link to this draft legislation, please, as my understanding was most IFAs were exempt from having to comply with the client call recording rule?

    • Philip Castle 25th May 2016 at 7:21 pm

      Whether it is a rule or not, recording phone calls is good practice and we do. Recording mobiles is more difficult and hence why I only give clients land line numbers (well actually skype, but not mobile so we can easily record and store)

  2. charlie palmer 26th May 2016 at 1:59 pm

    au contraire…
    Mifid II is under EEA rules, and the vote is not to leave the EEA, only the EU. All financial services legislation sits under EEA. Brexit leaves financial services legislation unchanged.
    this was confirmed to me in person by the Attorney General Jeremy Wright – responsible for all legal advice to the Government…see

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