Picture the scene: it’s the strategy day for an investment provider and they are busily coming up with new products to flog.
They propose an investment offering high levels of income – and a risk to match – but camouflaged with some pretty fantastic marketing material. Their concern is how to attract investors? How on earth can they convince the end investor that this high voltage product is actually “safe as houses”?
Ah, but that’s the point: they don’t need to convince the investor – they simply need someone else to spin the lies for them so they can hold their hands up as the innocent party when it all goes wrong. How do they convince someone to do that for them? Is it to come up with a product that actually delivers, that won’t become illiquid and that will provide the level of risk stated by the marketing material? No, don’t be ridiculous. They just offer advisers a commission of 10% and their work is done.
Well, that is how it appears to me. I see a good proportion of new clients coming to me to help them unravel various investments their previous advisers have set up. This is often a challenging task as not only do you have the financial effects to consider, you also have the emotional impact on the client. For many, they have trusted someone with their financial livelihood and have had that trust completely destroyed, along with their means of retiring, as the products have lost considerable value and in various cases are now completely illiquid.
I find this sickening. That an adviser can hold the trust given them by the client in such contempt (that they feel no responsibility for their actions) is despicable and how can the investment provider, coming up with this sort of nonsense, sleep at night? It’s just wrong.