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The blame game

Every week, I try to write about an issue that strikes a chord with at least some readers of Money Marketing. One way to judge whether I have succeeded is to read the emails you send me in response to my comments.

Last week’s column, about the way IFAs are inextricably linked with all other sections of the financial services industry, drew a good selection of comments from many of you. It seems worthwhile drawing on some of those responses for this week’s column.

One IFA wrote in to say: “I have written to you before about your habit of assuming that all of us are responsible for some of the more unacceptable conduct of life company salespeople and banks.

“All the evidence points to the fact that IFAs are easily the most ethical section of the industry. Tarring us with the same brush, as the headline of your article suggests, means that you are doing us a disservice.

“More important, it does consumers a disservice. You really ought to be telling readers why it is that they should be talking to an IFA instead of going to a bank or directly to a life company for advice.”

Another adviser wrote: “This week found myself advising a female client. In about 1990, she was opted out of the university superannuation scheme and contracted out of Serps. She funded her Allied Dunbar personal pension for three years before leaving her employer and joining the NHS where, thank goodness, she joined the NHS scheme for a period of nine years.

“Her Allied Dunbar contracted-out plan has a value of about 1,100. Her predicted sum total income from three years of opting out is 71 a year.

“This pales into insignificance, however, compared with her more recent troubles. This summer, my client went to a major high-street bank for assistance with consolidation of various loans. She required 18,000 to repay debts and to borrow a little extra to help her relocate to new rented accommodation.

“The bank’s solution was to offer a five-year loan and to insist on PPI cover. Instead of offering a competitive PPI plan with a monthly premium, it insisted on buying the five years’ cover with a single premium.

“The cost of this was approximately 10,000, added to the loan amount. My client was unaware that this cost had been capitalised. Over the five years, including interest, my client will repay over 38,000 compared with the original borrowing requirement of 18,000.

“I have recommended that my client pursue compensation for both of these cases and have offered, and given, unpaid assistance in starting this process.”

However, another IFA writes to say: “I agree that financial advisers will often get tarred with the same brush as the rest of the industry. This is regrettable but why don’t you lay some of the blame for this where it properly lies – at the door of consumers themselves.

“All too often, when you see someone, you discover that they have over the years taken out products from a variety of sources, sometimes even while still nominally the client of an IFA. Indeed, I often come across cases where one of my own clients will admit to me at our annual review that they have bought such and such a product without asking me about it first. Why should I then go out of my way to help them?”

Another adviser says: “The one thing you do not mention is that it can sometimes take many hours to disentangle someone’s financial affairs. We do not get paid to do that, which means that if their finances are in a mess – and so many of them are – I could be massively out of pocket.”

I cannot resist adding one final comment from a reader who took exception to my reference to “spotty twentysomethings”. He writes to say: “Perhaps as a twentysomething I am being oversensitive but I suspect that if you had decried the actions of “fat, balding men past their prime” in a professional journal, you would find yourself neck-deep in complaints.

My reply was: “As someone who, at some very deep and distant stage in his life, was actually a twentysomething, I can only grovel apologetically if you feel you have been insulted. I will certainly make mention of fat balding men past their prime in my next column.

“That said, if you are spotty, may I suggest talking to a GP? They can do wonders for your skin, using a number of topical retinoids or bonzoyl peroxide. Inflammatory acne also responds well to azelaic acid treatment, such as Skinoren.”

My correspondent replied: “I understand that your use of the phrase in the article was as hyperbole intended to introduce your main point and I did not feel personally insulted by your words. I merely felt that the choice of words was symptomatic of a broader dismissive attitude towards young people in general.

“While I can see from your picture that your hair is cruelly redistributed by genetic forces beyond your control, you look relatively trim, at least in the waist- up picture given.

“BTW, I am comparatively lucky to have a relatively clear complexion, with the exception of occasional shaving rash or other irritations. I find tea tree oil-based products very helpful for these cases but thanks anyway…”

nic@inspiredmoney.co.uk

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