The Personal Finance Society has urged the Government and the FCA to introduce new rules which safeguard advisers against future misselling claims from “insistent” clients.
PFS chief executive Keith Richards says it sensible the Government has mandated advice for those wishing to transfer out of a defined benefit pension worth over £30,000 in order to access the new pension freedoms. The Government is also considering this requirement for people who want to cash in their annuity from April 2016.
But Richards adds: “Where the advice is not to transfer, the Government has confirmed people will still be at liberty to ignore it. This places advisers in a compromised position, as many will not be prepared to facilitate an insistent client transaction which goes against their professional advice. Those who do, will be party to arranging an unsuitable solution and might be deemed liable in the event of a complaint.”
The PFS chief executive is calling for those who ignore advice to be excluded from qualifying for redress against the adviser or the Financial Services Compensation Scheme.
Richards says: “If the Government wants advisers to help implement greater consumer choice, we are calling for an urgent change of policy in recognition of the risks this represents to both the public and the future reputation of the advice profession.
“Caveat emptor must become a recognised component of the insistent client process. Until that happens, advisers should not get involved in unsuitable facilitation without being protected. It benefits neither them, the profession, nor the public we are here to serve.”