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The price of protection

It should be understood that claims against an IFA are claims about bad advice, not bad products.

If a product is faulty, the manufacturer coughs up. This applies throughout all industries. If a product recommended by an IFA later proves to be unsuitable for the client, then surely it is the advice of the representative of the IFA that is being called into question?

How can the manufacturer be held liable if a product is incorrectly used?

That is not to say that the protection of Financial Services Compensation Scheme should be free to the client.

After all, it is not unreasonable that those who enjoy the protection of a insurance policy should pay the premiums.

Clients who use an IFA need protection against the consequences of flawed advice. Therefore, they should be expected to pay the premium. The fairest and most equitable way is to include the levy in the IFA’s charges.

Mike Stafford

Partner,

Stafford & Co,

Hertford, Herts

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