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The PFS view

A market known for strong ethics will be a better market because it will deliver benefits to the economy and society. Once ethics are allowed to decline, bad practice becomes the norm and there is a competitive cost on firms which act ethically, which means few do. Essentially, you get a race to the lowest level and the system degenerates into crisis.

In these circumstances, PR departments can engage in peacock displays, presenting positions to the customer which cannot be substantiated. An exploitative attitude towards customers is almost inevitable.

I make these points because they indicate the job which the CII and Personal Finance Society need to do to establish proper standards of conduct. The FSA’s regime sets high principles but how these are put into effect is crucial. Our task is to convince the public of the value of the financial advice sector. The published code of ethics and conduct which will apply to PFS members is one thing but we need to develop that into best practice guidelines. In all dealings with customers, the adviser needs to put customer service first. We need to re-establish perceptions linking financial advice and product offerings to direct customer benefit.

I would like to refer to one issue which was reported in Money Marketing on January 27. The reaction which appears to be coming from some parts of the IFA sector to the suggestion that they should engage in pro bono work on behalf of consumers, whether through the Citizens’ Advice Bureaux or otherwise, would suggest that some advisers do not see the point that we need to support the public at large.

The CII and PFS have launched a pilot scheme with the CABs and hope to have a report on this in the spring. But some press reports have suggested that advisers have been reluctant in coming forward to volunteer for the pilot.

I would like to think that the IFA sector is better than this. Please write to Money Marketing about your views about doing pro bono work. I hope these views will be positive.

John Ellis is executive chairman of the Personal Finance Society


Arla claims landlords may be missing out on essential cover following gi regulation

Landlords could be missing out on essential general insurance and protection pro-ducts for residential lettings because unregulated agents are not allowed to sell to them. The Association of Retail Letting Agents is concerned that landlords who rely on residential letting agents to arrange house and contents insurance will not get cover if their agent is […]

Willing participants

With all the difficulties that a combination of the gift with reservation and pre-owned assets rules have caused for lifetime estate planning with property – especially the principal private residence – many have effectively given up on this and turned to consider what can be done to at least ensure that the nil-rate band of the first of a couple to die is used. The saving in inheritance tax if this is successfully achieved is not to be sneezed at. It is the princely sum of 105,200.

Verity’s view

With both sides claiming victory over Legal & General’s ground-breaking challenge to the FSA concerning its 1.1m fine for endowment misselling, which side has really won?L&G’s victory dance convinced more members of the press than did the FSA’s equivalent.


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